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TMI Blog1989 (7) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... elayed clearance and, as alleged, had been making irrelevant inquiries, which were being replied by the appellant. During the course of time, the appellant came to know about the Customs Notification No. 386/86, dated 29-7-1986 (as amended) which exempts payment of basic customs duty over and above 20% and totally exempts payment of additional duty subject to the conditions stated therein. The condition being production of a certificate issued by the Industrial Adviser in the office of Director General (Technical Development), Government of India, recommending exemption from payment of duty under provisions of the said notification. 3. The appellant obtained such certificate and submitted to the Customs authorities, but instead, a show cause notice was issued to the appellant as to why the goods should not be confiscated. Subsequently, after granting hearing, the impugned order was passed. 4. We have heard L.A., Shri G.L. Rawal with L.A. Ms. Neerja Mehra for the appellant and Shri A.S. Sunder Rajan, JDR for the respondent. It is not in dispute that the appellant has imported 20 MTs of Tartaric acid from a foreign supplier and has filed Bill of Entry at ICD, Delhi for clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the importers are liable to a penal action under Section 112(a) of the Customs Act, 1962? 8. The Collector has held (in para 20) that since the appellant has not satisfied the conditions of import of item placed under OGL (appendix list 8 part I), the import is not valid in terms of Para 24 of Import Policy 1985-88. On perusal of the said Appendix 6 list, it appears that items listed therein are allowed to be imported to actual users (industrial) and export house/trading houses. The appellant has produced, before the Collector, a certificate of registration as an industrial unit issued by Deputy Director of In dustries, Delhi (copy of which is produced at page 6). This is issued on 22-4-1982 to the appellant for following manufacturing/processing activities : (1) Polishing Salt (2) x x x (3) x x x (4) A.R. Grade of Tartaric acid and re-packing of the tartaric acid (added on 9-5-1985 and amended on 15-10-1985). So from this certificate it can be seen that the appellant has been registered as a small-scale industry for manufacture of A.R. grade of tartaric acid and also for repacking of tartaric acid. It is also registered for manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present. As we have stated earlier, if the appellant is unable to fulfil the condition imposed upon them, it will invite suitable action. As far as questions of purity and grades are concerned, it appears that Collector has mixed up the facts. It has been clearly contended by the appellant that they do not accept the report of the chemical analyser and that the description of the goods, in question, as commercial grade, is not correct because there is no such grade as commercial grade but that the appellant was asked to write this description by the Assistant Collector. It has also been contended that the goods are of technical grade and of 98% purity and that assuming for the sake of the arguments that purity of the goods is 99.5% and that that is also required purity in A.R. Grade then also that by itself would not prove that the goods are not of A.R. Grade. 12. Learned Advocate, Shri G.L. Rawal has drawn our attention to the ISI specification for tartaric acid (copy of which is produced on record at Pages 15 and 16) and at back side of Page 16, there is a table wherein requirements for different grades of tartaric acid are stated in a tabular form. On perusal, it can be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted before the department. For reasons best known to him, the Collector raised doubt about this certificate in following words : However, while examining the certificate issued by the Industrial Adviser, I find that the Industrial Adviser has gone beyond his role as recommendatory authority for extending the benefits of concessional rate of duty as the Industrial Adviser will only recommend the case of importation at concessional rate of duty for consideration by the competent authority. The recommendation given by the DGTD cannot be binding on the Customs authorities and cannot be construed as obligatory to be accepted. Benefit of concessional duty cannot be extended only on the basis of this recommendation without examining other facts of import and use of the material as such. However, there need not be a bar in claiming benefit of exemption notification, if the importers are satisfactorily able to account for the material used in the manufacture of leather chemicals. 17. From above, it is clear that the Collector has exceeded his authority and has transgressed into the field of other authority. It has been stated in the order itself that the appellant has cited Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate were disproved by some other material. There is a great danger in accepting the submission of the Department that the authorities can brush aside the certificate and determine whether the assessee is entitled to the exemption or not. 19. L.A., Shri Rawal has also argued that Notification No. 386/86-Cus. as amended by Notification 89/87, as issued by the Government of India, under powers conferred under sub-section (1) of Section 25 of the Customs Act, 1962 is issued in exercise of legislative powers and cannot be challenged by subordinate authorities. In support of this contention, he has cited Bombay Conductors and Electricals Ltd. and Another v. Government of India and Others 1986 (23) E.L.T. 87 (Delhi) = 1983 ECR 315D (Delhi) wherein it has been held as under : Section 25(1) of the Customs Act, 1962 delegates power to the Central Government to grant exemption from duty whenever it finds necessary so to do in the public interest and shall be laid before Parliament as soon as may be after their issue and the Parliament may amend or reject them. This shows that notifications issued under Section 25(1) are in exercise of sovereignty i.e. legislative power. 20. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o whether the sample is of technical grade as per Indian Standard. The Chemical Examiner s report, however, does not answer this query but requests that the purpose of the query may be clarified. It adds that the importer may be advised to forward authentic literature containing physical and chemical composition and the intended use. The Chemical Examiner, it may be seen, has thus not expressed any opinion as to whether the sample conforms to the technical grade or the AR grade. 25. The appellants, in their letter dated 21-1-1989 (copy at Pages 101 to 103 of the Paper Book) had furnished a flow-chart of the processing of the imported Tartaric Acid to cream of tartar on the basis of 500 Kgs of Tartaric Acid in a single shift of 8 hours per day. The letter had enclosed also details of machinery required for manufacture of cream of tartar from Tartaric Acid and the machinery installed at the appellants premises. In the said letter it has been stated that the appellants have an installed capacity to process more than 150 metric tons of Tartaric Acid per year for the manufacture of cream of tartar on a single shift basis. The claims made in this letter and the details of the machiner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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