Reliance Industries Ltd. Vs. Collector of Customs - Court Judgment

Excerpt:

.....system of micro-processor based instrumentation. he submits that these goods were part of the consignment imported for the project imports. in fact, the assessment itself was provisional, as referred to by collector in para 8 of the impugned order. he also draws our attention to packing list sent by the supplier which indicates uninterruptible power supply system and submits that this system was imported along with the main goods referred to in the invoice dated 21st march, 1988, placed at page 30. he, further, forcefully submits that the entire licence covered all the equipment which was supplied under the equipment supply agreement which is also registered for project import 6. the ld. advocate also in the alternative prays for leniency on the ground that these were bona fide imported. the equipment was covered by licence and in fact, on earlier occasion customs house allowed these imports without raising such objections.7. ld. d.r. reiterates department's submissions and submits that though ups is an essential facility to ensure proper power supply for effective working of computer based instrumentation, it cannot for that reason be considered as a part of the.....

Judgment:

1. This appeal is directed against the Order-in-Original No.S/10-39/88-CC, dated 20-5-1988 passed by the Collector of Customs.

2. The appellants filed a bill of entry for clearance of among others the following goods under Project Import against the Import Licence dated 27th June, 1985: (i) Uninterruptible Power Supply consisting of cells, accessories of cells, drip trays, battery stand, electrolyte etc. valuing Rs. 6,66,440/-C.I.F. (ii) Spare parts for the uninterruptible power supply system valuing Rs. 39,126/- C.I.F.3. The clearance for I.T.C. purposes of these goods was claimed against Item 80 of list attached to the licence. This reads as follows : "Distributed micro-processor based programmable instrumentation including field and panel mounted instruments, controls/interlocks, control/compensation cables with centralised supervisory master control system including annunciation, data-logging, trend recording and report generation for control of process parameters like level, speed, flow, pressure, temperature, density, moisture level etc. -1 lost (partial)".

4. In the impugned order Collector of Customs held that UPS, i.e., Uninterrupted Power Supply with battery back-up is an essential facility to ensure power supply in the event of failure of normal power supply but that by itself would not make it a part of the computer/micro process system. Being specific goods these would need specific import licence. He, therefore, confiscated goods but allowed redemption of these goods on payment of redemption fine of Rs. 1,60,000/- (Rupees One Lakh and Sixty Thousand only). Hence, this appeal.

5. Arguing for the appellants, the ld. Advocate submits that UPS is essential for the entire micro based programmable instrumentation since such a sophisticated equipment will be irreparably damaged if UPS is not installed along with the equipment. In this view, it is a part of the entire system of micro-processor based instrumentation. He submits that these goods were part of the consignment imported for the Project Imports. In fact, the assessment itself was provisional, as referred to by Collector in Para 8 of the impugned order. He also draws our attention to packing list sent by the supplier which indicates Uninterruptible Power Supply System and submits that this system was imported along with the main goods referred to in the Invoice dated 21st March, 1988, placed at Page 30. He, further, forcefully submits that the entire licence covered all the equipment which was supplied under the Equipment Supply Agreement which is also registered for Project Import 6. The ld. Advocate also in the alternative prays for leniency on the ground that these were bona fide imported. The equipment was covered by licence and in fact, on earlier occasion Customs House allowed these imports without raising such objections.

7. Ld. D.R. reiterates department's submissions and submits that though UPS is an essential facility to ensure proper power supply for effective working of computer based instrumentation, it cannot for that reason be considered as a part of the computer.

8. We have heard both sides. Uninterruptible Power Supply System is admittedly essential for running the type of equipment described in Para 2 of the impugned order like Distributed Micro-processor based programmable instrumentation, etc. For that reason, however, it cannot be considered a part of the equipment. The main function of UPS is to ensure the instant supply of power in case of a sudden breakdown as its absence may cause irreparable loss to the equipment or the data stored in that. Only for that reason however it cannot be considered as a part of the equipment. The appellants have also not placed before us any clarification obtained from the Licensing Authority as to admissibility or otherwise of these goods under the licence.

9. In Para 6 of the Appeal-memo, the appellants have stated that they imported UPS earlier for the main PTA Plant master control system on the same Licence and in terms of the same Item No. K-2 and the spares (Item L-1) were cleared by the Customs House on B/R Rotation No. 1040 and Line No. 93 in July, 1986 without any objection. Parts of the UPS were also similarly cleared.

10. In view of this, the redemption fine to the extent it has been imposed, merits reduction. In view of this, we reduce redemption fine to Rs. 75,000/- (Rupees Seventy Five Thousand only).

11. Subject to this modification, the impugned order is upheld and appeal otherwise rejected.