1997(05)LCX0219
IN THE CEGAT, EASTERN BENCH, CALCUTTA
Shri P.C. Jain, Member (T) and Smt. Archana Wadhwa, Member (J)
COMMISSIONER OF CUS., (PREV.), W.B., CALCUTTA
Order No. A-684/CAL/97, dated 30-5-1997 in Appeal No. C-1/97
CASE CITED
Akbar Badruddin Jiwani v. Collector — 1990(02)LCX0057 Eq 1990 (047) ELT 0161 (S.C.) — Relied on ............... [Para 3]
Advocated By : Shri S.R. Dutta, Advocate, for the Appellant.
Shri P.K. Roy, JDR, for the Respondent.
[Order per : Archana Wadhwa, Member (J)]. - The present appeal is against the Order No. 16/96, dated 9-8-1996 passed by the Commissioner of Customs (Preventive), West Bengal, Calcutta.
2. Briefly stated, the facts of the case are as under :-
The appellant herein imported 10,000 pcs. of battery operated toys and filed a bill of entry No. 1161, dated 16-1-1996. The total value declared by the appellant for the goods in question was Rs. 6,91,294.50. The appellant was issued a show cause notice dated 8-4-1996 along with other seven parties alleging misdeclaration in respect of quantity of the goods as also in respect of value of the items as in respect of violation of import restrictions. Ultimately the proceedings as regards the charge of quantity and valuation were dropped as also the proceedings against other six parties were also dropped. Vide the impugned order, the Commissioner of Customs confiscated the goods in question with an option to the importer to redeem the same on payment of Rs. 3 lakhs and also imposed a personal penalty of Rs. 50,000/- on the ground that the walkie talkies imported by the appellant were not reduced size models classifiable under Tariff Heading 9503.20, but they were electronic toys falling under Tariff Heading 9503.90. On the basis of the above classification, he held that as the goods were consumer goods and were restricted items, the same were not permitted to be imported against the special import licence produced by the appellant but required a licence for import of such consumer goods. The goods were confiscated on the ground that the appellant has not been able to produce a licence covering the goods in question and it is only special import licence produced by them which does not cover the goods, the goods being consumer items.
3. Appearing on behalf of appellant, Shri S.R. Dutta, learned Advocate submitted that he is not challenging the classification arrived at by the adjudicating authority. However, drawing attention of the Bench to Chapter XV, Part II, paragraph 156 of Exim Policy 1992-97, he submitted that as per the footnotes appearing under the said para, the restricted items including consumer goods, as may be specified by the Directorate General of Foreign Trade in this behalf, may be imported only against a transferable Special Import Licence (SIL) issued under paragraphs 122, 132B, 142 and 153 read with the relevant Chapters of the Handbook of Procedures (Volume 1). Referring to para 142, he submitted that export houses, trading houses, store trading houses are entitled to benefit as specified in Chapter XII of the Handbook of Procedures (Volume 1). As regards items to be specified by the Director General of Foreign Trade, he refers to Appendix XXXV of Handbook of Procedures (Volume 1) April, 1992 to 31st March, 1997 and submits that as per Sl. No. 15, electronic games/toys under Customs Heading 9503.20 were listed for import against Special Import Licence. He, however, submits that no doubt against the said Sl. No. only those electronic games/toys which are classifiable under Customs Heading 9503.20 have been listed for importation against the subject import licence but the Appendix XXXV was amended subsequently as is appearing in Volume 1 of Handbook of Procedures 1st April, 1992 to 31st March, 1997 incorporating amendments made up to 25th of March, 1996. Referring to the said amended Appendix XXXV, he submitted that for the specified items required to be listed by the Director General of Foreign Trade as per requirement of footnote under para 156 of the Exim Policy would be in columns 3 to 5 of the book titled “ITC (HS) Classifications of Export and Import Items”. The said book was subsequently published on 16th October, 1995 and under Chapter 95, column 2 describes the items as electronic games/toys and against column 5 under the Heading Public Notice mentions as “Import permitted against special import licence”. Shri Dutta argues that the Policy was changed w.e.f. 1-9-1996 which factor has not been considered by the adjudicating authority. He has gone by the earlier specified items under Appendix XXXV and has not looked into amended Appendix XXXV read with the Export & Import Policy aligned on ITC (HS) Classification by the Directorate General of Foreign Trade. In the circumstances, he submitted that confiscation of the goods was not justified. In any case, the learned Advocate submitted that there was a confusion as regards the correct classification of the goods and going by the common parlance test the goods are nothing but electronic toys/games. The appellant having subsequently produced Special Import Licence covering electronic games/toys therefore declared classification under the Customs Tariff was not so relevant has been laid down by the Hon’ble Supreme Court in the case of Akbar Badruddin Jiwani v. Collector of Customs reported in 1990(02)LCX0057 Eq 1990 (047) ELT 0161 (S.C.).
4. Countering the arguments of learned Advocate, learned JDR, Shri R.K. Roy submits that there is no doubt that the items in question were classifiable under Heading 9503.90. This fact has also not been disputed by the appellant. As the items in question were consumer goods covered by the restricted items category, they required a specific licence for import of the same. He further submitted that this Heading 9503.90 has been further sub-divided into a number of Headings up to eight digits and these divisions do not overlap each other and the items appearing against Heading 9503.90.03 described as others have been specifically shown as requiring a licence for importation of the same. In the circumstances, the goods being restricted items, a licence covering the same was required to be produced by the appellants and the Collector has rightly confiscated the goods and imposed penalty.
5. I have considered the submissions of both sides. The appellant in this case have not challenged the classification of the goods as falling under item 9503.90. There is also no dispute that the appellants have imported the said items under a special import licence issued by the licencing authority. In the said licence against the column description, it is mentioned as “This licence is eligible for import of items listed in the Appendix XXXV of Handbook of Procedure 1st April, 1992 to 31st March, 1997 (Volume 1)”. Even, considering the classification by the Commissioner as falling under 9503.90 and the items being a restricted item footnotes under para 156 referred to certain specified goods being importable under Special Import Licence. For looking into the specified goods as also in terms of the licence, Appendix XXXV has to be looked into. Appendix XXXV, as it stood at the relevant time, refer to columns 3 to 5 of the book titled ITC Classification of Export and Import Items published and notified by the Directorate General of Foreign Trade. Columns 3 to 5 under Chapter 95 allows electronic games/toys to be imported against Special Import Licence. In Column No. 1 against such description of electronic games/toys, Exim code has been given as 9503.2000.10. However, I find that under the item description no specific Tariff Heading of Customs Tariff has been mentioned as was the case prior to amendment of Appendix XXXV in which Sl. No. 15 of the specified items gave a Heading 9503.20 against the electronic games and toys. From a comparative reading of the amended and unamended Appendix, it is apparent that prior to 1996 only, those electronic games/toys which was classifiable under 9503.20 could be imported against Special Import Licence. I also take note of the Supreme Court decision in the case of Akbar Badruddin Jiwani wherein the Hon’ble Supreme Court has held that even if Department’s case is accepted as regards the classification in respect of the articles imported by the appellant in that case, the burden still lies on the Customs Department to show that the appellant had acted dishonestly or contumaciously or with deliberate or distinct object of breach of law. In the instant case, I find that special import licence was obtained by the appellants for import of the items in question. The department has not been able to put on record any evidence to show that there was any mala fide on the part of the importers. Even if presuming for a second that the goods are not importable under the Special Import Licence produced by the appellant, nevertheless going by the common parlance test, the electronic toys and games would stand covered by the licence in question as there could be a bona fide belief on the part of the appellant to entertain a reasonable doubt that the goods walkie talkie toys in question were importable against the Special Import Licence.
6. Considering all these aspects I hold that no contravention can be said to have been committed by the appellants. The appeal is, therefore, allowed with consequential relief, if any.
Equivalent 2000 (124) ELT 648 (Tribunal)
Equivalent 1997 (021) RLT 0326 (CEGAT)