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TMI Blog1996 (2) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... consignments, for which no show cause notice had been issued. The imported goods in respect of live components, the Learned Collector has ordered for confiscation under Section 111(d) of the Customs Act, 1962, however, has granted redemption on payment of fine of Rs. 30,000 besides imposing penalty of Rs. 5,000. 2. The department on investigation found the importers to have been licensed for the manufacture of stainless steel flexible corrugated hose pipes. The DGTD had issued a certificate for importing 25,000 Mtrs. of stainless steel corrugated flexible tubes of various diameters subject to OGL conditions. It was found that the importer had cleared seven consignments on various dates during December 89 to Sept. 90 in terms of this OGL provision. It is stated in the order-in-original that under the import policy, raw materials, components and consumables, other than those included in the Appendix 2, 3 Part A, 5 8 are allowed to be imported by actual users (Industrial). The import policy defines actual user (Industrial) as an undertaking be it in the larger scale, small scale, or cottage industries sector engaged in the manufacture of any goods for which it holds a licence or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or after examining the definition of the term, as per the dictionary of Scientific and Technical terms, on the term hose , found it to be nothing but flexible tube used for conveying fluids and pipes is a tube made of metal or clay . Therefore, he held that the tubes under import are nothing but hoses and they are covered under Appendix 3, Part A. The importers had also described the said goods in the sales invoices as hoses. He held that in these imports goods of Appendix 3, Part A, category have been cleared under OGL provisions, without satisfying actual user conditions, hence the consignments covered under Sl. Nos. 1 to 7 liable for confiscation under Section 111(d) of Customs Act,1962 read with Section 3(2) of Import and Export (Control) Act, 1947. 4. As regards the pending consignment at harbour vide B/E 0435584/25-10-1990, it was found that the importer had imported Stainless Steel Flexible Tubes of CIF value Rs. 69,138 and claiming clearance under OGL; on the same finding the Learned Collector has held that the said goods cannot be cleared under OGL, while noting the importer s admission that the goods would be diverted for sale. 5. We have heard Shri Srinivasa Ragh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importer approached the DGTD for issue of permission to launch on phased manufacturing programme by using the existing infrastructure facilities and importing the Stainless Steel Flexible Corrugated Tubes as raw material to manufacture the final product namely, stainless steel flexible corrugated hose pipes, till their last set of machinery. It is stated that such permission to import one lakh metres of stainless steel flexible tubes granted on 7-8-1989 to commence the phased manufacturing activity. It is stated that as it was not economical to import the tubes, by paying a huge customs duty, therefore, on the representation, DGTD had reduced the quantum of import and issued certificate for import of 25,000 metres vide their letter dated 3-11-1989. It is stated that they had carried out the manufacturing activity inasmuch as they had subjected the imported tubes to processing such as cutting and assembling end-fittings by undertaking welding process and the processed goods attaining the nomenclature of hose pipe or tubes with fittings and therefore, the same was sold. It is also stated in Heading 83.07.00 of Central Excise Tariff Act that : flexible tubing of base metal with or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pipe is also defined as tube made of metal or clay . Therefore, there appears to be no reason for Government of India to define Import Policy in respect of making of distinction between pipe/hoses and tubes. He also submitted that while SS pipe and hose are covered by Appendix 3, tubes are covered by Appendix 6. He submitted that there is a distinction between these two terms. He further submitted that a tube has no functional utility whereas a hose has a finished product and therefore, is covered under Appendix 6 and hence, the question importing a hose by an actual user would not arise. On the other hand, under Appendix 6 an actual user can import a tube which is semi-finished in character vis-a-vis a hose and makes the finishing process such as cutting and fixing the end-fittings and then market site. He submitted that the actual user undertakes certain process and fully complies with the condition applicable to the actual user i.e. importer themselves. In this context he relied on the Supreme Court s judgment rendered in the case of Akbar Badruddin Jiwani v. Collector of Customs as reported in 1990 (47) E.L.T. 161 (SC). 8. The Learned DR reiterated the findings given by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een claimed under OGL Appendix 6, List 8, Part I, Sl. No. 744 which reads : Stainless steel fittings, pipes and tubes other than those covered by Appendix 3, Part A. The department has alleged that the imported item is covered under Sl. No. 685 of Appendix 3, Part A of the Policy, which cannot be imported, which reads as : 685(f) Flexible corrugated stainless steel pipes/hoses. 12. The Learned Collector has found the importer to have been licensed for manufacture of Stainless steel flexible corrugated hose pipes . They had been granted certificate by DGTD under OGL for the import of 25,000 Mtrs. of stainless steel corrugated flexible tubes of various diameters. It has been found that they have sold the item by sales invoice as steel tubes only and without carrying out any activity and that they have not marketed the final goods, for which they have been licensed in respect of earlier consignments. There is, therefore, a clear violation of OGL actual (industrial user provisions, inasmuch as that the imported goods were not to be utilised for manufacturing the final products for which they have been licensed. The department official found the braiding machine not hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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