Full Judgment
2. We have heard Ms. Sangeeta Jain, learned Counsel and Shri K.N.Gupta, learned SDR.3. The appellants submit that the goods are not oil seeds falling under Appendix 5B Item 5 as they cannot be planted for further growth of a crop nor oil can be extracted from them and only those seeds which can be used for planting and/or from which oil can be extracted fall within the purview of Sl. No. 5 Appendix 5B. The appellants claim that they are actual users industrial of the item for manufacture of Ayurvedic/Unani medicines. Learned Counsel draws our attention to letter dated 25-4-1984 of the State Trading Corporation to the effect that the import of Khaskhas is not canalised through them and also a photo-copy of a letter dated 4-5-1984 of the Ministry of Commerce stating that Poppy seeds (Khaskhas) is not an oil seed. Learned Counsel draws our attention to the orders passed by Collector (Appeals) in the case of other importers allowing the import of Khaskhas under OGL for stock and sale in terms of Appendix 10 List 8 Part III of the AM 84 Policy and to the order of the Tribunal in the case of Multani Ayurvedic Pharmacy - Final Order No. A-392 to 394/87-NRB, dated 12-6-1987 covering import of the same item. She, therefore, prays for setting aside of the impugned order.
4. Learned SDR, Shri K.N. Gupta points out that at the time of import, the importers had claimed clearance under OGL Appendix 6 List 8 Part III for stock and sale, which is not applicable in terms of note appended to Appendix 6 List 8 Part III which clarifies that the entries in that list allow only those items as are covered under OGL for actual ushers (industrial) vide items 1 and 2 of Appendix 6 i.e. items or specifications, etc. which do not appear in Appendices 2 to 5 and 8, read with clarification contained in Chapter 22 wherein it has been clearly mentioned that poppy seeds being covered by Appendix 2 Part B, cannot be imported under OGL. He further submits that the item could not also be imported as a crude drug in the absence of any specific mention thereof in Appendix 6 List 4. He seeks to distinguish in case law cited by the appellants on the ground that the controversy therein related only to whether import of poppy seeds was canalised through STC under Part 5 Appendix 9 of the relevant Policy.
5. We have heard both sides and carefully considered their submissions.
We agree with the learned Counsel that in view of the order of the Tribunal in the case of Multani Ayurvedic Pharmacy (supra) the adjudicating authority's finding that poppy seeds are covered by Item 5 of the Appendix 5 Part B is not correct. The Tribunal has held that the import of Khaskhas by actual users industrial viz. manufacturers of Ayurvedic/Unani medicines was permissible and that the item was not a canalised item. However, it still remains to be seen whether the import of poppy seeds can be allowed under OGL as crude drug as claimed by the appellants or whether it is covered for import as an item for stock and sale under Appendix 6 List 8 Part III.6. We agree with the learned SDR that the import of the item as crude drug is ruled out as there is no specific mention of this particular item in Appendix 6 List 4 covering import of items mentioned therein which is the list of items which can be imported as crude drugs under OGL. We further agree with the learned SDR that the import of the item is not permissible for stock and sale under Appendix 6 List 8 Part 3 as para 242(f) of Chapter 22 enumerating principles to be applied for inter se interpretation of the various appendices as well as OGL imports clearly sets out that "any item in Appendices 2 to 5 or 8 with a specific or generic description will preclude the eligibility to its import under OGL, except where the Policy allows this clearly." Appendix 2 Part B Item 104 covers all consumer goods, howsoever described, of industrial, agricultural or animal origin, not appearing individually in Appendices 3 Part A, 4 Part A and 5 or specifically listed for import under. Consumer goods has been defined in the Policy as consumption goods which can directly satisfy human needs without further processing and includes consumer durables. Poppy seeds satisfy the definition of the consumer goods as they can directly satisfy human needs and are of agricultural origin. Therefore, the generic description of poppy seeds in Appendix 2 Part B 104 will prevail over the residuary entry in Appendix 6 List 8 Part 3 at Sl. No. 33.
7. In the light of the above discussion we hold that the items are not eligible for clearance under OGL, Appendix 6 List 8 Part in as they are hit by Sl. No. 104 of Appendix 2 Part B. We accordingly uphold the order of confiscation; but in the facts and circumstances of the case, having regard to the value of the goods (Rs. 1,40,000/-) and, further noting that no penalty has been imposed, we consider that a fine of Rs. 50,000/- will be appropriate. We order accordingly. Subject to the above modification the appeal is rejected.