1989(10)LCX0053

BEFORE THE CEGAT, SPECIAL BENCH ‘B2’, NEW DELHI

S/Shri Harish Chander, Member (J) and K.S. Venkataramani, Member (T)

THAKUR DAS & SONS

Versus

COLLECTOR OF CUSTOMS

Order No. 391/89-B2, dated 24-10-1989 in Appeal No. C/3656/88-B2

CASES CITED

Vinod Gupta v. Collector - 1987(12)LCX0002 Eq 1988 (037) ELT 0044 (Cal.)                               [Paras 3 & 5]

Bipinchandra Vrajlal Ghelani v. Union of India - 1987(08)LCX0081 Eq 1987 (031) ELT 0694 (Bom.) [Paras 3 & 5]

Ratan Exports v. Collector - 1986(10)LCX0008 Eq 1987 (029) ELT 0102 (Tribunal)                       [Para 5]

1987 (4) S.C.C. 174                                                                                                                [PARA 5]

REPRESENTED BY: Shri L. U. Balani, Advocate, for the Appellants.

Shri C. V. Durghayya, JDR, for the Respondents.

[Order per: K.S. Venkataramani, Member (T)]. - This appeal is directed against the order dated 28-6-1988 passed by the Additional Collector of Customs, Bombay by which he had confiscated a consignment described in the related Bill of Entry as metal fittings clamps under Section 112 of the Customs Act, 1962 levying a fine in lieu of confiscation of Rs. 1,20,000/- and also holding that the goods are classifiable as loose leaf binders under Heading 8305.10-CTA and denying exemption under Customs Notification 224/85-Cus.

2. The appellants filed Bill of Entry in November 1987 for the import of the above consignment valued at Rs. 1,51,086/- claiming clearance of the goods against REP import licence issued under provisions of Appendix 17 of Import Policy against export product D 2.2.(1). The materials permitted for import against this export product included metal fittings other than zip/snap fasteners. They claimed classification of the imported goods under Heading 8308.90-CTA as being covered by the entry “clasps” occurring therein. They also claimed exemption under Notification 224/85-Cus. which exempted, among other items, “clamps” when imported for use in leather industry from duty in excess of 40%. The department on examination of the goods and inspection of representative samples drawn from the consignment was of the view that the goods imported are metal fittings for loose leaf binders/office files which is a stationary item classifiable under Heading 8305.10-CTA and for that reason were also ineligible for the exemption under Notification 224/85-Cus. The department further held that as stationary item, the goods are not covered by the REP licence issued against export product D 2.2(1) for leather goods. Proceedings were, therefore, initiated with the issue of Show Cause Notice to the appellants on the above lines which culminated in the impugned order passed by the Additional Collector,

3. The learned counsel Shri Balani appearing for the appellants submitted that the clamps imported are for use in sophisticated types of leather, executive diaries, leather pouches, mens bags etc. and showed during the hearing some samples of such items where such clamps are used. He further submitted that the list of permissible items against export product D 2.2(1) in the Import Policy is not exhaustive and is of wide coverage and that where any exclusions are intended, these are specified in the relevant column in Appendix 17. In this connection, he cited the decision of the Hon’ble Calcutta High Court in the case of Vinod Gupta v. Collector of Customs -1987(12)LCX0002 Eq 1988 (037) ELT 0044 (Cal.) that under Appendix 17 wherever Government intended to provide restrictions, they are spELT out therein. Since the goods are covered by the description in the licence the import is not unauthorised and in this context the learned counsel cited the decision of the Hon’ble Bombay High Court in the case of Bipinchandra Vrajlal Ghelani v. Union of India -1987 (031) ELT 694 that import policy has no statutory force and that if there was no violation of the terms of the licence and no prohibition on the import of the goods, the import policy cannot stand in the way of clearance of the goods. Regarding the classification of the goods, the learned counsel contended that according to Concise Oxford Dictionary ‘clamp’ means clasp and the goods imported as clasps are covered by tariff description Heading 8308 and eligible for the exemption because clamps are specifically mentioned at Serial No. 10 of the Notification.

4. Shri Durghayya, the learned Departmental Representative appearing for the department contended that the goods have been described in the invoice as metal fittings with part numbers. The appellants have failed to support their contentions with application catalogue showing use as clamps in leather industry. The learned Departmental Representative also showed samples drawn from the imported consignment during the hearing and emphasised that these are nothing but loose leaf binders classifiable under Heading 8305.10-CTA and in such a situation, the department does not have to consider the classification under Heading 8508 as clamps or clasps and consequently applicability of Notification 224/85-Cus. need not be considered. Further that notification is confined to goods used in leather industries whereas according to the department, the goods imported as loose leaf binders are stationery articles. As regards the import licence, the learned Departmental Representative submitted that the relevant paras in Appendix 17 have to be considered and drew attention to para 8 thereof wherein it is laid down that only those items should be included in applications for such licence which are actually used as raw material for the export product.

5. We have given careful consideration to the submissions made by the learned Counsel and the learned Departmental Representative. The two issues to be determined in this case are, firstly, whether the import licence produced was valid to cover the goods imported, and secondly, the classification thereof under Customs Tariff Act, 1975. As for the first issue, it is observed that the goods have been described in the invoice as “Metal Fittings : finish : nickel plated” and the invoice gives the quantity supplied, unit price and brand name along with part number for equipment e.g. as follows :

The invoice does not give any indication that the manufacturers considering the goods as clamps. We have seen samples of the fittings imported during the hearing and the items in our view answer to the description of metal fittings of the clip type for loose leaf binders. The fact also remains that the appellants have not supported their case that these are clamps with manufacturer’s application Catalogue and in the absence of such evidence, the production of some items of leather pouches and bags with such fittings would not really help to advance the appellant’s case. The appellants have also not produced the indent and acceptance and correspondence leading to the placement of orders for the goods to show that they had placed orders only for metal clamps for leather goods. The description of the goods in the licence is locks, suitcase fittings and metal fittings other than zip/fastners (including in coil form) and components and parts thereof. These are allowed as “List of items under D. 2.2(1)” which is a reference to the Export Produce Group in Appendix 17 to the Import Policy. This product group reads as follows :

“Light categories of travel and other leather goods like attaché cases, brief cases, ladies hand bags, wallets, purses, leather hand gloves, other than industrial leather gloves covered by Sl. No. D.2.4."

In para 8 under general conditions, it is made clear “It should also be ensured that only those items are included in the list which are actually used as raw material or component for the manufacture of the relevant product exported”. Therefore, because of the description of the goods in the import licence with reference to the export product group D.2.2(1) in Appendix 17 of the Import Policy for REP licence, the Customs authority have necessarily to have regard to the parameters of that policy wherein it is seen as above there is a link of the permissible items to the export product. In this context we may usefully refer to the case of Ratan Exports v. Collector of Customs, Calcutta decided by the Tribunal reported in 1986(10)LCX0008 Eq 1987 (029) ELT 0102 (Tribunal) wherein while the licence permitted import of ABS Moulded resins (upper and lower parts) with handles and locks separately the actual import was of the parts hinged together which the Customs authorities had confiscated under Section 111(d) of Customs Act, 1962 holding that the goods imported was not as per licence. The Tribunal upheld the confiscation and observed, “The jurisdiction of the licensing authority would be to see whether the licence ought to be granted... But once a licence had been granted, it would be for the Customs authorities to determine whether the goods actually imported were in accordance with the licence. Once it is established that the goods imported were not in accordance with ^ the description in the licence, the fact that if the licensing authorities had been approached in time he may have amended the licence, would not, for that reason, take away the jurisdiction of the Customs authorities to hold that the actual import was not in accordance with the licence”. The same case also went before the Hon’ble Supreme Court -1987 (4) S.C.C. 174 who on examination of the imported material observed that there was hardly any scope to argue for acceptance of a view different from what has been taken by the departmental authorities and held that the finding that there had been violation cannot be interfered with and Hon’ble Supreme Court upheld the order of confiscation. In the present case also the goods actually imported have been found to be metal fittings for loose leaf binders and not metal fittings used in leather industry and hence the Customs authorities have rightly confiscated the goods holding the import licence as’ not valid for the goods imported. Hence the Bombay High Court judgment in 1987 (031) ELT 694 would not be of much avail to the appellants. The Calcutta High Court judgment 1987(12)LCX0002 Eq 1988 (037) ELT 0044 (Cal.) is also distinguishable on facts as in that case the Court observed there was a specific permission to the petitioners therein by the Govt. ^ of India to import rape-seeds and the Court also held that the clarification given by CCIE in that case that the goods are not covered by the REP licence will not apply to the import which had already taken place and in the absence of any Public Notice in that regard.

6. As regards the classification of the goods, it is seen that the invoice description thereof is metal fittings and part numbers are also assigned thereto for each brand. No evidence has been produced to show that these have been imported against orders for clasps for use in leather industry. Heading 83.08 of CTA covers “clasps frames with clasps, buckles, buckle-clasps, hooks, eyes, eyelets and the like, of base metal, of a kind used for clothing, footwear, awnings, handbags, travel goods, or other made-up articles....” A perusal of the sample from the consignment shows that the goods are metal fittings of the clip type for loose leaf binders, which item is covered under Heading 83.05 of Customs Tariff Act, 1975. As such, the goods fall outside the scope of Heading 83.08 of Customs Tariff Act, 1975 and in this view of the matter, they are also not eligible for exemption under Notification 224/85 which is applicable to goods used in leather industries whereas metal fittings loose leaf binders imported cannot be considered as such. In the result, we see no reason to interfere with the order passed by the lower authority and the appeal is, therefore, rejected.

Equivalent 1990 (046) ELT 0476 (Tribunal)