Full Judgment
2. The appellants imported refrigeration compressors and claimed clearance thereof as spares for air-cooled split type air conditioner under the licence dated 3.4.1986, issued under the provisions of para 114(1) of the Import and Export Policy Book for AM 85-88. Clearance was however objected to on the ground that para 114 clearly provided that the items appearing in Appendix 2 and 10 would not be allowed under the licence issued under the said provision and that the compressors clearly figured in App.10 at Sr.No. 1. The appellants waived the show cause notice but contended that the items imported figured specifically at Sr.No. 484 of App.3 Part A of the same Policy Book and that the compressors imported were to be used as spares for split type air conditioners which were of special type used in hospitals, laboratories, etc. They also contended that the compressors specified in App.10, were of the type used in industries as independent equipments and that entry in App.3-A being specific, would, by virtue of provisions contained in para 21 of the Policy Book, prevail over the generic entry in App.10. In the adjudication that followed, it was not denied that the compressors were for split type air conditioners, but a conclusion was drawn that they figured in App.10 and item appearing under the said Appendix was not importable under the licence issued vide para 114(1) of the Policy Book, and that interpretation given in para 21 of the Policy Book was not relevant. The impugned order was therefore passed.
3. Mr. R. Ravindran, the Id. advocate for the appellants has pleaded that entry No. 484 in App.3-A is specific covering compressors for refrigeration and air conditioning all types, referring to CCCN code No. 84.11 and as provided for in para 114(1) of the Policy Book, spares as listed in App.3-A were' permitted under the licence, issued under the said provisions, and that the licence is specifically issued vide provisions of para 114(1). He has also pleaded that the specific entry in App.3-A prevails over generic entry in App.10. The Id. advocate has also referred to the judgment of Madras High Court in Benzex Labs. Ltd. v. Collector .
4. Mr. Ravindran Jain, the Id. JDR has however, supported the order of the authority below, and has submitted that, undisputedly the licence is issued vide provisions of para 114(1) of the Policy Book, which make some specific provisions and there is a clear mention in that paragraph that the items appearing in Appendices 2 and 10 will not be allowed under the said provisions. He submits that, with specific provision existing in para 114(1) itself, recourse to any other explanatory provisions is not called for.
5. Mr. R. Ravindran, the Id. advocate, in reply submitted that App.3-A and specific entry thereunder, cannot be overlooked.
6. Considering the submissions made, and going through the record made available, it is clear that the licence issued to the appellants, under which clearance is sought, specifically mentions that the same is issued subject to the terms and conditions as prescribed under para 114(1) of the Import and Export Policy Book 1985-88. At the same time, in the column of description of goods, it is mentioned as "Spares of machinery/instruments as per list attached". The list attached however has the heading "Consolidated list of Machinery/equipments for which spare parts are desired to be imported under stock and sale licence" and item No. 7 in the said list amongst others, mentions "Copeland Compressors". Entry No. 484 of App.3-A, which provides a list of limited permissible items mentions compressors of refrigeration and air conditioning--all types, and mentions ITC code as 743.1001 and CCCN code as 85.11. At the same time, however, entry No. 1 in App.10 which provides list of equipment/machinery allowed as spares on a restricted basis mentions compressors, specifying same ITC and CCCN codes.
7. Para 114(1) of the Policy Book AM 85-88 under which the subject licence is issued, clearly mentions that "Items appearing in Appendices 2 and 10 will not be allowed under this provision," Obviously therefore, if the item appears in App.10, it would not be taken as permissible for import under the licence issued under the provisions of para 114(1) of the Policy Book. No explanatory note is given as to the interpretation of the policy provisions in relation to the licence issued under these provisions, if an item figures in more than one Appendix or as to listing of an item in generic term at one place and in specific terms elsewhere.
8. Recourse is sought to be taken to the provisions of para 21 of the Policy Book. Besides the fact that App.10 does not figure in the said paragraph, the provisions of that paragraph are meant to interpret policy provisions, in relation to the items figuring in Open General Licence, as also in Appendices 2, 3, 5 and 8. Interpretative clause in para 21 of the Policy Book, therefore cannot provide any assistance to the appellants, as the appellants do not claim import by virtue of inclusion of the item under OGL.
9. Thus, the situation that exists is that the item imported figures both in App.3-A and App.10. However, the specific mention in App.10, and with no explanatory note given in the interpretation of the Policy provisions, in relation to the provisions contained in para 114(1), the obvious intention in the said paragraph has to be given its due recognition.
10. The plea of the Id. advocate that compressors listed in App.10 are the industrial compressors and not those going as components/spares for air conditioning and refrigeration could also not be accepted; as no such demarcation is given under policy provisions and ITC and CCCN codes given at born the places are the same and as such it is not possible to draw the line of distinction as is pleaded 11. The judgment of Madras High Court in Benzex Labs. Ltd. v. Collector (supra) is principally based on the clarification given by the DGTD in relation to the Policy provision as regards items figuring in OGL. Here however, the item figures in App.3 and 10, and both relate to restricted items. Further no clarification as to the policy provisions have been given by DGTD or any other competent authority, in relation to the subject goods.
12. The list attached to the licence under which clearance is sought, speaks of importability of spares of the items listed, and it can be construed to permit only the spares of those items and not the retire items as spare for some other machinery/equipment.
13. With compressors figuring in App.10 and with provisions of para 114(1) expressly prohibiting items listed in App.10, from import under the licence issued under the said provisions, the order passed by the adjudicating authority cannot be held as suffering from any infirmity so as to warrant any interference. The order passed is well reasoned one and is therefore confirmed, insofar as it relates to confiscation of the goods vide Section 111(d) of the Customs Act.
14. The fine in lieu of confiscation however is fixed at Rs.75,000/- against the C.I.F. value of Rs. 1,52,000/- which virtually comes to 50% of the value. There is no data as to the margin of profit given to impose the fine to that extent. Considering this, as also the alternate prayer to reduce the same, as also considering the other submissions made, the fine in lieu of confiscation is reduced to Rs.50,000/-.
15. With the modification as above, the order of the adjudicating authority is confirmed. The appeal is disposed of accordingly.
Consequential relief to follow.