9911796707
TMI Blog1995 (6) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... stry for the manufacture of multi-layered co-extruded plastic film. The registration certificate dated 22-2-1988 indicated that the registration number allotted was provisional, and further advised the firm that the validity of the number was a year from the date of issue. If the concern was not able to complete formalities before the expiry of this period, it should apply for extension month before the date of expiry. Subsequently, a show cause notice dated 22-10-1988 was issued by the Director of Industries proposing cancellation of the certificate on the ground that, despite 8 months having lapsed, no machinery was installed and unit had not arranged for factory premises, etc. After considering the reply filed by the firm dated 1-11-1988 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... became an Actual User and entitled to import machinery in terms of the Policy. He cites the guidelines issued by the Government of India to say that provisional registration helps the party to take necessary steps to bring unit into existence. There can be no quarrel with this proposition and this is in fact reflected in the condition of the registration certificate referred to in paragraph 1 above. He then goes on to say that on the date on which the goods arrived at Kandla, the appellant was in possession of provisional registration certificate and, therefore, had to be accorded the status of an Actual User Industry. He says further that it was only by an act of detention of the goods by the Customs that the unit could not be established ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant to acquire services and goods that it would need in order to become a full-fledged industrial unit. However, the crucial question is did the appellant in fact carry out activities in pursuance of the provisional licence in order to qualify for regular registration. The answer is provided by the fact that the Director of Industries, the licensing authority for small scale industries, himself, after issue of show cause notice and considering the reply furnished by the appellant, cancelled the registration on the ground that even after 8 months, the appellant did not take steps to get machinery, power etc. The claim by Shri Rawal, the appellant could not commence production because machinery was held up by the Customs at Kandla, do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder. 6. The very nature of a provisional certificate is that it gives the holder some background and support for setting [up] his unit. Unlike regular certificate, the provisional certificate has a limited life and is subject to renewal. If the Director of Industries saw fit not to treat the appellant as an Actual User later to the import of the goods, we do not see how the Customs Authorities can be found fault with for taking a different view. In the light of the developments which took place treating the appellant as an Actual User would utterly defeat the object and purpose of the policy. 7. It was Shri Rawal s next line of argument that Import Policy for the relevant time did not have the force of law. It was only an Executive Ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have found that the appellant had no factory in reality, the opinion which is shared by the Collector of Customs. In this view of the matter too, the appellant could not import the goods under O.G.L. 8. The confiscation of the goods, therefore, is in order. 9. Shri Rawal made a further point that in one case an option to redeem the goods had been given, no such option was given in the other. In addition to this discrimination, he says, it was mandatory for the Collector to give an option to redeem the goods. He cites Hon ble Supreme Court s Judgment in [Collector] v. Jagjit Singh - 1964 (6) SCR 594. Even without going into the correctness of the legal point, we are of the view that the importer should have been given an option to redeem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the consignor to be Farrell Engineering Ltd. It would, therefore, appear that the other two items have been erroneously taken. The value of the three milling machines shown as Rs. 30 lakhs (market) are 50% of the total value of the consignment. We, therefore, propose to adopt by this ratio, the value of the machines of Rs. 6,00,000/-. The machinery is second-hand and it is not possible for us to assume that the Invoice of Farrell Engineering Ltd. is the correct value. Nor it would be practicable at this stage after 7 years to go into the value. We, therefore, reduce the redemption fine to Rs. 6,00,000/-. Accordingly, we reduce the penalty imposed on the appellant to Rs. 3,00,000/-. After the hearings were concluded, Shri Rawal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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