Full Judgment
2. Advocate for the appellant relied upon the certificate of March, 1989 of the manufacturer of machine, and affidavit affirmed on 12-5-1989 by the Chartered Engineer. According to these documents the machines are capable of grinding points of the drill bits used by the appellant it to drill bits in the surgical needles made by it. The machine was also used for grinding the points of these needles. He further contends that the Collector has ordered confiscation of the goods only on the ground that the machine was not machine tools under both the documents.
3. The Collector has not said that the machine cannot be imported under OGL entry. What he has said in that it would not be covered by the entry because: "Further, a plain reading of OGL Entry indicates that what is actually allowed for import under this entry is grinding machine of machine tool category capable of grinding the cutting tool of drill".
He has thus correctly appreciated that the OGL entry is limited to the scope of the grinding machine which grinds the drill bits the use of needle. He has also come to a categorical finding that what is imported is automatic drill point grinding machine, and hence is not covered by the entry. The Chartered Engineer's certificate mentions that drill bits used for drilling holes in the wire shaft of the needle are ground and polished with this machine. The technical literature for the machine of the manufacturer does not support this conclusion. The certificate of March 1989, says that the machines can be used for grinding and /or polishing points of drill-bits used this drilling points of alternative Surgical Needles. Polishing and grinding are two separate distinctly known mechanical functions and are separately defined as followed in the Me Graw-Hill Dictionary of Scientific and Technical Terms.Polishing (CHEM ENG] : - In petroleum refining, removal of final tracesof impurities, as forGrinding [ELECTER] : - A mechanical operation performed on silicon substrates of semi-conductors This makes it clear that going by the manufacturer's certificate the machine was not capable of grinding the drill needle points. The Chartered Engineer's certificate says that the machine grinds and polishes the drill bits. When however, the manufacturer of input of the product himself does not say that the machine performs the function. We do not see why we should relegate his statement to second place, and prefer before it the certificate of the Chartered Engineer. It would, therefore, not be covered by the OGL entry the redemption fine of Rs. 6.00 lacs or of Rs. 50% is reasonable, and does not call for modification.
4. The penalty of Rs. 3.00 lacs has been imposed on the ground that the appellant did not take sufficient precaution to ensure that the machine was covered by the OGL entry before the period of limitation. When invited by us to indicate the existence of material such as enquiry with the manufacturer's correspondence etc. which would show that the appellant at least made efforts to satisfy itself the machine is covered by the OGL entry the advocate stated that he was instructed that no such material was available. There would be no dispute that the composition of the needles and the composition of drill bits would be substantially different. On considering the fact that the machine's primarily function is to grind the points of the needles it is therefore, not unreasonable to conclude that appellant knew that the machine was incapable of grinding drill bit points, or considered the possibility and chose not to verify the position. We are satisfied that imposition of penalty is justified. Taking into account the value of the goods we reduce the penalty from Rs. 3.00 lacs to Rs. 1.5 lacs.
Consequential relief to follow.