Full Judgment
2. The facts of the case are that the appellants filed a bill of entry on home consumption No. 2796, dated 12-5-1993 through their clearing agent M/s. Azad Shipping Agency 11/234 for the clearance of 8,000 kgs.
of clovesterns for a total CIF of Rs. 32,000/- which was shipped by M/s. Multi-foods Pvt. Ltd. Colombo vide Invoice No. EX/890/93, dated 3-5-1993. It is of Sri Lanka origin. Appellant claimed under OGL (other than negative list goods) goods was examined and representative sample was called for by the group for inspection. On perusal of the sample it appeared that the goods were rightly classifiable under Chapter Heading 0907.00 which covers cloves (whole, fruit, cloves and stems). Since it was shipped from Sri Lanka the benefit of Notification No. 89/93-Cus., was admissible to importer appellant. Regarding relevant Policy of import for 1992-97, claim under OGL is not permissible, as Part II Para 156, Serial No. 8 of Import Policy covers cloves, cinnamon and cassia for which specific licence was required for import, as cloves also covers fruit and stem. As per Part III, para 157, Serial No. 5 all other oils or seeds or any other material from which oil can be extracted are canalised through STC and Hindustan Vegetables Oils Corporation Ltd. As per the literature submitted steam distillation of cloves stems yields 4.5% to 5.5% of essential oil, and hence it should be treated as covered by the above entry. The above clovestems goods appear to be liable for confiscation under Section lll(d) of the Customs Act, 1962 read with Foreign Trade (Development and Regulation) Act, 1992, and the irnporters/appellant is liable to personal penalty under Section 112(a) of the Customs Act. On querries by the group, appellant by their letter dated 15-6-1993 sought for storage under Section 49 of Customs Act to avoid Demurrage and detention charges, and it was allowed on payment of admitted duty, pending enquiries.
According to the above, conclusion, show cause notice was issued calling for their objection/explanation, which appellant and their Advocate M/s. Kantawala & Co., in replied on 19-6-1993, 21-6-1993 and 28-6-1993 personal hearing was held on 5-8-1993. Shri S.N. Kantawala argued the matter on behalf of appellant/importer. After going through the records of the case, Assistant Collector of Customs Group-I, Bombay ordered for confiscation of imposed goods under Section lll(d) of Customs Act, with redemption fine of Rs. 30,000/- and for payment of duty. Penalty under Section 112(a) of Customs Act, of Rs. 15,000/- was imposed on the appellant. In the appeal by the party, Collector confirmed the above order, holding appellant is a trader, and seized goods come under Part III, Para 157, Serial No. 5 of the Policy of 1992-97 exclusion clause is also rejected, holding clovestem as any other material under the above policy. Hence this appeal.
2. In support of the appeal, Shri Anil Balani the ld. Advocate for appellant has urged that in 1994 (71) E.L.T. 545 in the case of Jaykay Co. v. Collector of Customs, Bombay it is clearly held that "Khaskhas is not a canalised item, nor an oil seeds. Import of the some by Industrial user, i.e. manufacturers of Ayurvedic/Unani medicines is permissible, and similarly clovestem has also got multipurpose use. STC has clearly stated that clovestems is not canalised through them. It is used for Ayurvedic drug. It yields essential oil 4.5 to 5.5% on distillation as observed in order-in-original. It does not come under SI. No. 5 of Para 157 Part III. Fine is 100%. It is too excessive. The reasoning for imposing it, and penalty of Rs. 15,000/- is not legally correct. No conditional benefit to be given. Both fine and penalty have to be reduced. Import of clove stem to extract oil is not viable both commercially and economically. If natural essential oil is excluded from SI. No. 5 of Para 157 of Part III, material from which it is extracted is also to be excluded. Identical goods of appellant are cleared by Customs Authorities, subsequently. The ld. JDR for Respondent has urged that description of any other material in SI. No.5 Para 157, Part III refers to clovestem, and not the exclusion clause of essential oil. The importer being a trader exploits the market shortages and possible loopholes in the Policy. Unlike actual user, who is in urgent need of the raw material. The discussion and conclusion in the impugned order is sound and correct.
3. Point for consideration is whether there are sufficient and satisfactory ground to set aside the impugned order? I answer it in the negative.
4. Perused the case law referred by appellant in Paras 3 to 7 and 1992-1997 Policy under Parts II paras 156, SI. No. 8 Part in, Paras 157 Item No. 5. Also peruses the order of lower authorities, appeal memorandum. Arguments of both sides are taken note off. The appellant has nowhere specifically stated, why clovestems are imported by him, as Trader. The purpose of import is not clear. As per the impugned order the narrow controversy in this case is whether the clove stem, imported goods, is other material or natural essential oil. Impugned order rejects the contention of the appellant that harmonious construction suggested by the learned Counsel cannot go beyond the purview of the specific exclusion provided in the Entry, exclusion is for natural essential oil, and not for any material from which oil can be extracted. In the order-in-original also literature of the imported goods is examined and sample clove stems was also visually examined.
The definite conclusion arrived at it that clovestems extracts only oil, and not natural essential oil. The order-in-appeal confirms it.
The appellant has not established that on extraction of clovestem attracts exclusion clause in SI. No. 5 of Para 157 in Part HI. In the absence of any such material, the concurrent findings on fact cannot be disturbed. There are no satisfactory and sufficient grounds in that regard.
5. Now coming to redemption fine, as already pointed out above, purpose of import of clovestems is not clear. Admittedly appellant is a trader, and not actual user. The reasoning in the impugned order in Para 9 appears to be quite appropriate, penalty is Rs. 15,000/- half of redemption fine, which is imposed with reasons. So there is no ground to reduce the same. The point raised is answered in the negative.
Ruling refers use of import item for industrial usage, and not for commercial purpose as in this case. So it does not help the appellant.
Hence I pass the following order.
For the reasons indicated above, the appeal cannot be allowed, and it is rejected.