Judgment:
1. This appeal is directed against the order of the Additional Collector of Customs, Bombay ordering confiscation of the goods on the ground that the importation has been made without a valid ITC Licence and giving an option to the appellants to clear the goods on payment of a fine of Rs. 30,000/- (Rupees thirty thousand) in lieu. The short question to be decided is whether a second hand offset machine could be imported under the OGL, shipped in March 1984 against a Letter of Credit opened in February, 1983 against Import Policy for 1982-83.
While the adjudicating authority has held that it cannot be said that there was a firm commitment in view of a condition in the Letter of Credit that the machinery would be shipped only after its inspection by the proprietor of the appellant firm, the appellants have placed reliance on paragraph 7 of OGL (Appendix 10) of the Import Policy which is as under : "(7) In the case of Capital Goods, equipment and permissible spares covered under Open General Licence, vide Items 3, 4, 5, 6, 10, 11, and 12 above, if the eligible Actual User importer enters into a firm contract for import upto 28-2-1983 but the goods cannot be shipped on or before 31-3-1983 on account of the longer delivery period involved, the shipment may be allowed upto 31-3-1984 in pursuance of such firm contract, provided the contract, in question, is duly registered with a foreign exchange dealer (Bank) on or before 28-2-1983. (In specific cases, where the delivery period is still longer, CCI & E, New Delhi may allow shipment under OGL upto a further extended date in consultation with the technical authorities concerned)." 2. The undisputed facts are that the Letter of Credit was opened on 28-2-1983 valid for shipment upto 14-3-1983 with the condition about inspection by Shri D.D. Sharma, the proprietor of the appellant firm, before shipment. On receipt of a letter dated 13th April, 1983 from the suppliers saying that "a certain delay occurred for delivery of above machine. The owner of the machine will receive his new machine approximately 6 months later so that he will not release the ROTASPEED 9 (the secondhand machine to be supplied to the appellants) earlier", the suppliers therefore, requested for extension of the Letter of Credit by six months. The Letter of Credit was accordingly extended.
One other factor which was responsible for extension was that Shri D.D.Sharma had not received his passport until 18th May, 1983 and could not, therefore, have travelled to West Germany for inspection of the machine even if the machine had been ready for shipment. The Letter of Credit had to be extended second time on 28-11-1983 and third time on 14-12-1983. The machine was finally shipped during the Policy period 1983-84 though the Letter of Credit was opened as early as on 28-2-1983. The question which now falls for decision is whether in terms of the Import Policy (para 7 - Appendix 10) it can be said that the appellants had entered into a firm commitment but the goods could not be shipped upto 31-3-1984 because of "the longer delivery period involved".
3. Shri J.S. Agarwal, learned Advocate, submitted that the appellants' case is squarely covered by paragraph 7 of Appendix 10 and placed reliance on the decision of the Supreme Court in the case of Union of India v. Suksha International and Nutan Gems and Anr., reported in 1989 (39) E.L.T. 503 (SC), in which it was held that the effect of any beneficial provision should not be unduly restricted so that it may take away with one hand what the policy gives with the other. He also placed reliance on the judgment of the Bombay High Court in the case of Richardson Hindustan Ltd. v. Union of India and Anr., reported in 1988 (37) E.L.T. 496 (Bom.) (Bombay) in which it was held that the clarification given by the Import & Export Control Authority, who is the licensing authority, cannot be challenged by the Customs authorities. Shri Sharma, learned JDR, on the other hand, submitted that in view of the condition for inspection of the goods by the proprietor of the appellant firm, it cannot be said that the Letter of Credit was a firm commitment for purposes of paragraph 7 of Appendix 10 of the Import Policy. He also submitted that the citations given by Shri Agarwal were not relevant in view of the mandatory condition in the Import Policy.
4. I have carefully persued the appeal and considered the submission of both sides. While it is true that there was a condition of inspection in the Letter of Credit, but there is. no doubt that the Letter of Credit itself was in the nature of firm commitment for shipment of the goods before 28-2-1983. It is because of certain unforeseen circumstances that the shipment of the goods could not be made in time.
These were matters beyond the control of the appellants and it would not be fair to put the blame on them for delay in shipment of the goods. It is a case covered by the condition of longer delivery period because the suppliers themselves had informed the appellants that there would be delay in the shipment of the second-hand machine. There is no dispute that the contract was registered with the bank. Taking all these circumstances into consideration, I am of the view that the appellants' case is covered by paragraph 7 of Appendix 10. The order of confiscation of goods and imposition of fine in lieu thereof is set aside and the appeal is allowed.