Full Judgment
2. The goods were examined on first check basis. On examination, it was found that the plastic cases of alarm cases were nothing but clock cases in CKD condition. It was observed that clock cases in CKD condition and dials were restricted for import as per the provisions of the current EXIM Policy and they could not be imported except against a specific licence. Since the appellants were not having any licence for clearance of the subject goods, it was alleged by the Deptt. that they would be liable to confiscation under Section 111 (d) of the Customs Act, 1962. A penalty was also proposed against them under Section 112 (a) of the said Act. The appellants waived from issuance of show cause notice and a personal hearing was granted on 30-4-1996. It was urged by the appellants in the course of personal hearing that what was imported, was not complete clock cases in C.K.D. condition but only certain parts. Since many of the parts such as battery cover, glasses, knobs, on and off switches etc. were being manufactured by them. It is also recorded in the order-in-original that the representative of the appellant admitted that it was a restricted item under the EXIM Policy.
3. On adjudication it was held that the imported goods are clock cases in CKD condition. Hence the goods were confiscated with an option to the appellant to redeem them on payment of a fine of Rs. 75 thousand. A penalty of Rs. 10,000/- was also imposed on the appellant by the Deputy Comissioner (Customs).
4. On appeal, the lower appellate authority has held that the imported goods were not in CKD condition. The said authority, however, has found that alarm clock cases were classifiable under ITC Heading 9112.80 in the HSN effective from 23rd March, 1996. This is a restricted item and therefore, liable to ITC classification. It is also found that the letter of credit was opened on 8-3-1996. The goods were cleared on payment of duty on 4th May, 1996. The appellants pleaded that from the date of opening of irrevocable letter of credit till the date of payment of duty and clearance, it was less than 45 days and therefore, they were not hit by the policy changed w.e.f. 25-3-1996 during the interim period. But this plea has discarded by the lower authority on the ground that between the date of establishing of LC and date of payment of duty the gap is more than 45 days.
5. This finding of the adjudicating authority is against the transitional provisions as laid down in the EXIM Policy itself. 45 days are to be counted from the date of imposition of restriction that is 25-3-1996. In this case, the LC has been established before that date.
There is no dispute that the L.C. in the present case has been established on 8-3-1996 that is well before 25-3-1996. The shipment has been made within 45 days of 25-3-1996 inasmuch as duty has been paid and cleared on 4th May, 1996 itself. Accordingly, the appellant herein is entitled to the benefit of transitional provisions in the EXIM Policy. The restriction imposed by ITC HSN Classification 9112.80 effective from 25-3-1995 will not be applicable in this particular case. Consequently, impugned order is set aside and appeal is allowed with consequential relief to the appellant.