9911796707
TMI Blog1989 (6) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 1986, the petitioner installed plant and machinery at the said factory. The petitioner also obtained Excise Gate Pass which is required for removal of excisable goods from a factory or warehouse on payment of excise duty. In October 1986, the petitioner applied to the Joint Chief Controller of Imports Exports, Calcutta for allotment of Importer Code Number for the purpose of importing various goods as per the Import Policy of the Government of India and on November 4, 1986 the petitioner was allotted Importer Code Number. 5. On August 22, 1986 the petitioner entered into a contract with M/s. Jaykant J. Shah Co. Pte. Ltd. of Singapore for import of PVC Electrical Insulating Film in terms of Open General Licence, Appendix 6, List 8, Part 1, Serial No.121 of the Import Policy for the year 1985-88 of the Government of India. Pursuant to the said contract, the said foreign seller on January 6, 1987 shipped 455 cartons of PVC Electrical Insulating Films per vessel "Katherine" and the said goods arrived at the Calcutta Port in the month of January, 1987. The petitioner duly submitted all the relevant documents and filed the Bill of Entry for assessment and release of the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice (Matter No. 2726 of 1988) the respondents were directed to complete the adjudication proceedings by 16th June, 1988 after giving the petitioner an opportunity of being heard. The respondents were further directed to return the documents seized by them after retaining the xerox copy of such documents. In respect of the second show cause notice (Matter No. 2728 of 1988) the respondents were similarly directed to release documents in the same manner. It was also directed that the petitioner, after obtaining the release of the documents shall file Bill of Entry and the respondents shall assess the Bill of Entry within two weeks thereafter. The proceedings under the show cause notice dated 11th September, 1987 were stayed. 7. No affidavit-in-opposition to the aforesaid two writ petitions was filed by the respondents. Both the matters appeared from time to time and necessary directions were given. 8. On 25th November, 1987, this Court passed on order in the aforesaid two writ applications on the following terms :- "The petitioner is given liberty to file supplementary reply to show cause notice by 28.11.88. Collector of Customs, Calcutta is directed to pass adjudication order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her hand, the goods under dispute had been imported in January, 1987 and April, 1987 itself. Since the importers have already cleared one consignment arrived per s.s. Katherine, they have deliberately violated the Actual User Condition which is required to be fulfilled before availing of the benefit of OGL condition for "proposed unit". The importers have submitted that they are now having a factory at 3 Tarpan Ghat Road, Calcutta and they have produced certain evidence in support thereof. However, they have still not been able to obtain a permanent SSI registration certificate so far." However, in respect of the second issue, the Additional Collector of Customs held as follows :- "Having regard to the facts and circumstances of the case, it is held that the importers have deliberately given a wrong declaration while claiming OGL benefit for the consignment arrived per s.s. Katherine and already cleared by them thereby violating the provisions of Sections 111(d) and 111(m) of the Customs Act, 1962. I accordingly impose a penalty of Rs. 50,000/- (Fifty thousand) only on M/s. Dee Pee Industries, Calcutta. For the same offence of mis-declaration, the goods arrived by vessel s.s. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Industries. Neither any person was examined in support of such enquiry before the adjudicating authority. There is no such provision. The respondents have failed to satisfy this Court that production could not be commenced or bank loans or other facilities could not be obtained by a provisional certificate holder. The said finding is not based on any evidence on record. That apart, the respondent adjudicating authority should not have relied upon the said report, and the said report even if any, cannot be used against the petitioner unless copy thereof was supplied and/or inspection was given and/or opportunity was given to the petitioner to cross-examine the concerned persons. 18. The second basis for arriving at the aforesaid conclusion is paragraphs 92(1) and (2) of the Import Export Policy AM 1985-88. It was submitted by the petitioner that the said provision of paragraphs 92(1) and (2) is also not applicable in the case of the petitioner inasmuch as the same is meant for the proposed unit. 19. Paragraphs 92(1) and 92(2) provide that the sponsoring authority will issue the registration certificate to proposed unit should clearly mark the registration certificate with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stage, provisional certificate is issued by the Small Scale Industries Department and the permanent certificate is only issued when the production of the factory starts and after inspection by the competent officer of the Department of Small Scale Industries. It is beyond doubt that unless the necessary machinery are installed and raw materials are purchased, the production of the factory cannot be commenced and in fact, in the instant case, the machinery were installed and for the purpose of production the subject goods being the raw materials were imported for the purpose of starting production at the factory. The said fact has been stated in paragraphs 3 and 4 of the writ petition which remains uncontroverted. It is well-settled that a business is set up when it is established or set on foot. There may be a interregnum between the setting up of a business and its actual commencement. It cannot be disputed that the petitioner set up the business and took all steps for commencement of production. In view of the above, the enquiry report as mentioned in the adjudication order is without any basis and merit. 24. The third basis for arriving at the aforesaid conclusion is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls, or not in rolls. Self-adhesive plates, film, foil, tape, strip and other flat shapes, of plastics whether or not in rolls. Chapter 85.46 Chapter 85.46 Electrical insulators of any material Electrical Insulators of any material. 26. It would appear that the subject goods being PVC Electrical Insulators Films do not find place in Chapter 39.19 and in fact it is assessable under Chapter 85.46 inasmuch as it has electrical insulating properties. 27. In support of the above contention, the learned counsel for the petitioner has referred to the decision of Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi, Special Bench where the issue for decision was whether insulating tapes were classifiable under Central Excise Tariff H/85.46 as contended by the appellants therein or under H/39.19 as held by the department and after hearing the contention of the parties, it was held as follows :- "Neither in trade nor in common parlance, are Electrical Insulating Tapes known as Adhesive Tapes and as per Board's Tariff Advice No. 70/81 as well as earlier Tribunal decisions, they are different items falling under separate headings..." "CLASSIFICATION: Electric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mum required specification for Adhesive Insulating Tapes for Electrical purpose and the said specification is provided at table 1 at page 3. The goods imported by the petitioner are Adhesive Insulating tapes for Electrical purpose onlyof 13 mm thickness. From the copy of the Test Certificate issued by the manufacturer of the subject goods, it would appear that it conforms to all the minimum specifications provided for Self-adhesive Insulating Tapes for Electrical purposes of 13 mm thickness as stated at page 3 of the said ISI Standard. The samples of insulators manufactured by M/s. Bhor Industries Limited, Bombay and M/s. Chetna Polycoats (P) Ltd., Jaipur. Sample of the subject goods were produced before this Court. The same item cannot be assessed under two different heads. The goods are liable to be assessed under the Heading 85.46. 31. For the reasons aforesaid, these applications are allowed. The order of adjudication dated December 1, 1988 is set aside and quashed. The respondents are directed to assess the Bill(s) of Entry and release the goods upon payment of the Customs Duty. The Bill(s) of Entry shall be assessed within a week from the date of communication of this order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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