Full Judgment
2. Shri Kumaraswamy, the learned Consultant for the Respondent submitted that the Respondent is a small scale unit registered with the Director of Industries and Commerce, engaged in the manufacture of rechargeable lamps and emergency lamps and is using nickel cadmium rechargeable batteries in the manufacture of the aforesaid emergency lamps torch light etc. Nickel Cadmium Rechargeable batteries are not manufactured in India. The Respondent's unit is an "actual user" and Director of Industries initially issued a provisional certificate on 13-8-1992 for manufacture of rechargeable lamps and emergency lights for 10,000 numbers. Subsequently a permanent certificate was also issued on 23-12-1993. The goods are not consumer goods and require further processing. The clarification given in the ITC Public Notice 32/ITC/PN/92-97, dated 17-7-1992 clearly states that all components, spares and accessories of consumer durables can be imported without licence by actual users. The above clarification would apply on all fours to the case of the Respondent in the facts and circumstances of the case. The learned Consultant also referred to the communication dated 8-10-1993 from the office of the Collector of Customs, Madras clarifying that as per Public Notice 32/92, actual users can import under OGL parts and spares of consumer durables. Reference was made to the communication from the Industries Commissioner to the Collector of Customs, Madras recommending concessional Customs duty as per Notification 155/86, dated 1-3-1986, as amended, in favour of the Respondent, on the ground that the Respondent is the actual user of the goods in question. Finally it was submitted that identical goods were released for the Respondent, about 10,000 units, on 8-11-1993 by the Air Cargo Customs, Madras and a copy of the Bill of Entry in regard to the same was also produced. The Respondent, therefore, prayed that the appeal may be dismissed.
3. We have considered the submissions made before us. The issue is as to whether the goods are permissible for import under OGL as contended by the Respondent or would require a specific licence as contended by the Department under the relevant licensing Policy referred to above.
The Respondent has been found to be the actual users even by the original authority in his order dated 25-1-1993. To a specific query Shri Gregory, the learned SDR did not dispute the fact that the goods imported are spares of consumer durables. Public Notice 32/ITC/PN/92-97, dated 17-7-1992 referred to supra reads as under :- "Import of accessories, components, parts and spares of Consumer Durables: Attention is invited to Ministry of Commerce Notification No. 22(N-3), dated 30-6-1992 amending, inter alia, the definition of "Consumer goods" to include "accessories, components, parts and spares of consumer durables".
2. "Consumer goods" appear in Part II (Restricted items) of the Negative List of Imports. Consequent to amendment in the definition of consumer goods as mentioned above, accessories, components, parts and spares of consumer durables fall in the Negative List of Imports.
3. In terms of the provision contained in Paragraph 156 of the Export and Import Policy, 1992-97, consumer goods are not permitted to be imported except against a licence or in accordance with a Public Notice issued in this behalf.
4. It is hereby notified that accessories, components, parts and spares of consumer durables, except those which are specifically included in the Negative list of Imports, may be imported by a manufacturer of the consumer durables without a licence. Such imports shall be subject to the Actual User condition and no transfer of the imported goods shall be made without the permission of the Chief Controller of Imports & Exports. Importers will be required to produce evidence of their being engaged in the manufacture of the consumer durables concerned at the time of the Customs clearance (e.g. Industrial Licence issued by SIA.,) Acknowledgement received on filing of Memorandum with S.I.A. Registration as an Actual User with the concerned authority i.e.
State Director of Industries etc." It is not disputed by the Department that the goods in question are not specifically included in the Negative List of Imports in the Policy in question. The fact that the respondent is a small scale unit is clearly established by the provisional SSI certificate and the permanent certificate issued by the Director of Industries, Tamil Nadu, referred to above. The Industries Department has also certified that the Respondent is the actual user in their communication dated 27-12-1993 addressed to the Collector of Customs, Madras, which reads as under: "M/s. Vanatara High Power Industries Pvt. Ltd., 75-A, First Avenue, Indira Nagar, Madras-20 have applied for issue of Actual Users Certificate to avail the concessional rate of Customs Duty.
I certify that the item applied for are essential to produce end product, viz. 'Rechargeable Torch light, Emergency lamp Electric Rechargeable 2-D Power Pack and 8 hours Torch light only.
In has also been included as a line of manufacture in the SSI (Permanent) Certificate vide Regn. No. 18/07/55252, dated 23-12-1993 for the lines of activity "Assembling of Rechargeable Torch light, Emergency lamp, Electric Rechargeable 2-D Power Pack and eight hours Torch light only".
Out of the total components requirements, the item applied for Actual Users Certificate is also part and parcel of the end product and accordingly I recommend that M/s. Vanatara High Power Industries (P) Ltd., Madras may be considered for Customs duty concession as per Notification No. 155/86 Cus dated 1-3-1986 as also amended in 62/93, dated 28-2-1993 subject to admissibility and as per rules in force. A list of items recommended for Customs duty concession is also attached duly authenticated." We further note that in respect of clarification sought by the Bangalore Collectorate with reference to permissibility of import of Car Airconditioner coils, the Madras Collectorate clarified the same as under by referring to Public Notice 32/92-97 cited supra: This Custom House has not come across any import of the subject goods in the recent past. As such no values are available.
The subject goods was covered under SI. No. 564 of App. 3A of the erstwhile Import-Export Policy. After the advent of the new liberalised Import-Export Policy, the CCI & E had given a clarification vide letter No. 48(20)/92-97/IPL, dated 15-5-1992 (copy enclosed) stating that "items not included in the negative list of imports may be permitted freely without a licence" However, in June '92, accessories, components, parts and spares of consumer durables were brought under licening category vide ITC P.N. 22/92, dated 30-6-92 (copy enclosed). In July '92, the licensing authorities issued P. No. 32/92, dated 17-7-1992 (copy enclosed) permitting 'Actual User' alone for import of accessories, components, parts and spares of consumer durables under OGL. So, as per the existing licensing provisions, the subject goods can be permitted under OGL only when imported by an Actual User." We also note that 10,000 units of the same goods imported by the Respondent were permitted clearance by the Air Cargo Customs, Madras as evidenced by the Bill of Entry dated 8-11-1993. We also take note of the plea that identical goods are permitted for import as OGL as Actual Users by Hyderabad Collectorate and Shri Kumaraswamy, the learned Consultant for the Respondent submitted that he has been instructed to state that such clearances are permitted by the Bombay Customs also even though he has not made a reference about it. Therefore, taking into consideration the fact that the Respondent is the Actual User and the goods imported are not included in the Negative List of Imports under the Import Policy AM 92-97 and the clarification under Public Notice 32/92-97, dated 17-7-1992 would be applicable to the facts and circumstances of this case and also keeping in mind the clearances of such goods at Madras Customs and Hyderabad Customs etc. we are inclined to hold that the impugned order is sustainable in law on the basis of the facts referred to above. In this view of the matter the Department's appeal is dismissed.
5. I have [perused] the order recorded by my learned brother and I am not able to agree with him that the respondent's goods can be allowed under OGL. To appreciate the issue involved it is necessary to briefly set out the various pleas made before the learned lower authorities and also the view taken by the said authorities. It is observed that the goods imported are 50,000 pcs. of Nickel Cadmium rechargeable batteries having specification of 1.2 V/500 m AH. The authorities at the original stage considered the goods to be consumer goods for use in the various applications requiring no further modifications or alterations for use as such and were taken to be covered under para 156(A) of Import Export Policy AM 1992-97 under the Negative List. The said para 156(A) for convenience of reference is reproduced below :- "All consumer goods, howsoever described, of industrial, agricultural, mineral or animal origin, whether in SKD/CKD condition or ready to assemble sets or in finished form.
Not permitted to be imported except against a licence or in accordance with a Public Notice issued in this behalf." For the removal of doubts, it is hereby declared that consumer goods shall also include the following: The respondents before the learned lower authority waived the right of the issue of show cause notice and were represented before the lower authority by their Finance Director and also the Managing Director. The only plea taken before the original authority was that they are the actual users and had imported the goods for further processing in their factory and there were no mala fide involved in the importation and due to oversight in not understanding the import policy they had effected the import. There were no specific pleas made by them as to the usage of the batteries imported and also they did not plead on as to under which provision in the Import Policy the import could be allowed. At the appeal stage, however, they took fresh pleas and in their appeal before the Collector (Appeals) which is impugned before us for the first time the following pleas were taken: (i) The Nickel cadmium rechargeable batteries are not covered by the Negative List of Import Policy and that they cannot be equated with ordinary dry cell batteries which are primary cells, wherein the impugned goods are secondary cells.
(ii) The goods could not be considered as consumer goods for the reason that in the earlier Policy these were covered by SI. No. 557 of Appendix 3-A and in terms of Circular No. 32/92-97, dated 17-12-1992 the goods specifically covered under Appendix 3-A of the erstwhile Policy are freely importable and therefore the goods should not be considered as consumer goods.
(3) The petitioners' import are for use in rechargeable lamps and emergency lamps which were covered by the provisional SSI Registration certificate issued to the appellants. The learned lower authority while allowing the appeal has held as under : "The argument given by the appellants regarding the goods not being consumer goods, being secondary batteries and as they figure in Appendix 3A in the earlier policy and not being specifically mentioned in the negative list in 92-97 the classification given in ITC Public Notice 32 is applicable is accepted. The order regarding fine is set aside." It is observed that the learned lower authority has merely passed a cryptic order without analysing the ITC circular issued and the scope of the term 'consumer goods' as set out in para 156-A of the Import Export Policy AM 1992-97.1 am constrained to observe that in a case where the scope of the Public Notice falls for consideration vis-a-vis an entry in the import Policy the least that can be expected of an adjudicating authority is to go into public notice and also the scope of the purpose for which the ban has been imposed in the new Policy and whether in any way this would be defeated in case the circular issued by the authorities is in direct conflict with the provisions in the Policy. There is no such discussion. There is also no discussion as to how this Public Notice can be taken to apply to the facts of this case and how it overrides the statutory provision contained in a statutory Policy. Further the learned lower authority has taken into consideration a number of fresh pleas including those relating to usage of the goods. The learned lower authority has not entered any finding in regard to the same and has not also found it necessary to invite the views of the Department on these new facts urged. It was incumbent on the part of the learned lower authority to enter a finding as to whether the goods should be considered as consumer goods or not covered by para 156-A of the Policy AM 1992-97 and if the same could be considered as consumer goods, how the goods in question by virtue of ITC Public Notice 32/92-97 as referred to in the impugned order could be salvaged out of the banned category of the goods as set out in para 156-A of the Policy AM 1992-97. The learned lower authority's order for this reason alone cannot be considered as a proper order and therefore requires to be set aside on this short point. I observe that the fresh pleas taken and the facts urged before the learned lower authority have also been urged before us and in the order recorded by my learned Brother he has dealt with the same. I would like to record certain facts before proceeding to consider the issue on merits regarding their eligibility to import. The plea taken before the learned lower authority was that the goods were meant for emergency lights and during the hearing before us it was clarified by Shri S.K. Natarajan, Chairman of the company who was present, that the battery cells imported were intended for use in the torch lights, and not in emergency lights, in place of the normal dry cells. It was also clarified by him that the cells imported were being formed into power packs for sale as such for use in the torch lights. The above fact is relevant for consideration of the respondents' claim that the goods were being imported by them as actual users and for consideration of their claim in terms of Public Notice No. 32/92-97 and for consideration of the Department's plea in regard to whether these could be considered as consumer goods in terms of Para 156A of Import Export Policy A.M. 1992-97 under the Negative List. The respondents' pleas made and orally based on the written submissions before us are as under : (1) The cells imported are Nickel-Cadmium Rechargeable Cylindrical Cells which are secondary cells and not primary cells as are used in common torch lights and, therefore, these cannot be considered as consumer goods.
(2) The cells in question were figuring in Appendix 3, Part A in the Export Import Policy 1990-93 and since they were not specifically mentioned in the Negative List of Imports under Export & Import Policy 1992-97, they could be freely imported in terms of Public Notice No. 278-ITC (PN) 90-93, dated 29th February, 1992.
(3) The respondents were guided by ITC Public Notice No. 32-ITC (PN)-92-97, dated 17th July, 1993 and import could be made in terms of this Public Notice.
In regard to the first point the plea is that inasmuch as the Nickel-Cadmium cells imported by the respondents are secondary cells and are re-chargeable these cannot be placed on the same footing as primary dry cells normally used for torch lights as consumer goods. It may be pointed out that in the Standard Handbook for Electrical Engineers edited by Donald G. Fink, Eleventh Edition, under the discussion regarding Secondary Batteries in para 136, page 11-111, the following is set out: "The applications of secondary batteries fall into two major categories : 1. Those applications where the secondary battery is used essentially as a primary battery, but recharged after use. Secondary batteries are used in this manner for convenience (as in hand-held calculators or electronic flash units), for cost savings (as they can be recharged rather than replaced) or for power drains beyond the level of primary batteries.
2. Those applications where the secondary battery is used as an energy-storage device, being charged by a prime energy source and delivering its energy to the load on demand. Examples are automotive and aircraft systems, emergency no-fail and standby power sources, and hybrid applications.
A summary of some of the major applications of the various types of secondary batteries is given in Table 11-19.
TABLE 11-19. Major Characteristics and Applications of Secondary Batteries.-----------------------------------------------------------------------------System Characteristics Application-----------------------------------------------------------------------------...Vented Good high-rate, low-tempera- Aircraft batteries, industrial ture capability; flat voltage, and emergency - power excellent cycle life.
applications, communication equipment.
ture performance, excellent appliances, standby power.
cycle life, maintenance free.
Further, regarding construction of the same batteries under heading "Sealed Nickel-Cadmium Batteries" under para 146 the following is set out: "Sealed nickel-cadmium cells are available in several constructions.
Rectangular cells ranging in capacity from 1 to 25 Ah. The construction of these cells is almost identical to the vented cell except for the features noted above. Cylindrical cells ranging in capacity from 0.1 to 7 Ah. The cylindrical cell is constructed of sintered-type electrodes. The electrodes are interleaved with the separator, rolled in a "jelly-roll" configuration, and inserted in a nickel-plated steel can. Small button cells ranging in capacity from 0.02 to 2.0 Ah. These use electrode disks made from sintered or pressed plates...".
It is seen from the above that both secondary batteries and primary batteries can be used for the same purpose depending upon the voltages required. In the present case it has been admitted by the Chairman of the company and also borne out by the records that the cells imported are for use in torch lights, which also function with the use of the dry-cell batteries which have been described as primary cells by the respondents. Thus by virtue of being secondary batteries the goods do not cease to be a consumer article. The uses of secondary batteries as indicated above are for emergency lights in photographic equipments, appliances. These batteries are thus usable for consumer applications and in the instant case, since it has been admitted that the same are used for torch lights, which is a consumer article, the use of the battery therefore, has to be considered to be in relation to consumer article.
6. In regard to point No. 2 above, the respondents' plea that they could import the goods in terms of Public Notice No. 278-ITC (PN)/90-93, dated 29th February, 1992 is not maintainable. This Public Notice was issued on 29th February, 1992 in respect of the modification which was done in the Policy for April, 90 to March 93. The respondents' importation, however, has been considered in terms of Import Policy 1992-97 and it is in terms of the provisions of this Policy the respondents have to stake their claim for importation under OGL and this claim they had made before the lower authority under Public Notice No. 32-ITC (PN)/92-97, dated 17th July, 1993. As it is under this Policy under Para 156, A - CONSUMER GOODS, all consumer goods, howsoever described, of industrial, agricultural, mineral or animal origin, whether in SKD/CKD condition or ready to assemble sets or in finished form are not permitted to be imported except against a licence or in accordance with a Public Notice issued in this behalf.
Respondents' claim in terms of Public Notice No. 278-ITC((PN)/90-93 referred to supra, therefore, is not maintainable. Before adverting to the scope of the Public Notice No. 32 (PN)/92-97, dated 17th July, 1992, it is relevant to mention as brought out earlier, that the goods imported are secondary batteries of a type which are used in torch lights. These are sealed type and are usable in appliances. Even button cells of Nickel Cadmium configurations are also manufactured for use in consumer articles. Coming to Public Notice No. 32(PN)/92-97, dated 17-7-1992 it is observed that it relates to import of accessories, components, parts and spares of consumer durables. The Public Notice is reproduced below for convenience of reference : Importers of accessories, components, parts and spares of Consumer Durables.
Attention is invited to Ministry of Commerce Notification No. 22(N-3) dated 30th June, 1992 amending, inter alia, the definition of "Consumer goods" to include "accessories, components, parts and spares of consumer durables".
2. "Consumer goods" appear in Part II (Restricted items) of the Negative List of Imports. Consequent to amendment in the definition of consumer goods as mentioned above, accessories, components, parts and spares of consumer durables fall in the Negative List of Imports.
3. In terms of the provision contained in Paragraph 156 of the Export and Import Policy, 1992-97, consumer goods are not permitted to be imported except against a licence or in accordance with a public notice issued in this behalf.
4. It is hereby notified that accessories, components, parts and spares of consumer durables, except those which are specifically included in the Negative List of Imports, may be imported by a manufacturer of the consumer durables without a licence. Such imports shall be subject to the Actual User condition and no transfer of the imported goods shall be made without the permission of the Chief Controller of Imports & Exports. Importers will be required to produce evidence of their being engaged in the manufacture of the consumer durables concerned at the time of the Customs clearance (e.g. Industrial licence issued by S.I.A., Acknowledgement received on filing of Memorandum with S.I.A. Registration as an Actual User with the concerned authority i.e.
State Director of Industries, etc.).
The respondents have placed reliance on para 4 of the above Public Notice. This concession, as seen from the above, is available (1) in respect of accessories, component parts and spares of the consumer durables; (2) for those items which are not specifically included in the Negative List of Imports can alone be imported; and (3) the goods imported are subject to Actual User conditions. Even going by the respondents' arguments that the batteries are not specifically mentioned in the Negative List and can be imported in terms of this Public Notice, they have to establish that they satisfied the other conditions of the Public Notice viz. these are intended for consumer durables and that the respondents are Actual Users. It is seen that the torch lights for which the respondents have imported the goods for use by forming them into power packs for the same as such cannot be considered as "consumer durables". The term "durables" or "durable goods" has been defined in Websters' Third New International Dictionary as under:- "durables or durable goods : consumer goods or producer goods (as household appliances, automobiles, or machinery) whose usefulness continues for a number of years and is not consumed or destroyed in single usage." The consumer durables even going by the Trade parlance test are in the nature of household appliances like refrigerators, mixers, electric pressure cookers, washing machines, etc. and the torch lights are not sold by the dealers who deal in consumer durables which are in the nature of household appliances. In the same dictionary the term "appliance" in the context of household or office is described as under: "appliance...d : a household or office utensil, apparatus, instrument, or machine that utilizes a power supply, especially electric current (as a vacuum cleaner, a refrigerator, a toaster, an air conditioner)." The torch lights are sold generally at the shop which deal in consumer goods and not by the dealers of appliances and even in the Departmental stores the same are available at counters dealing in consumer goods for household uses. The goods imported, therefore, cannot be taken to be as intended for consumer durables and for this reason, therefore, it cannot be covered by the provisions of Public Notice 32-(PN)/92-97 referred to above. Further, I observe that the respondents cannot be considered as Actual Users in the light of the submissions made before us. The SSI registration certificate shows their product as Rechargeable lamps and emergency lights. The respondents have imported the goods for use in torch lights which are not specified in the list of items certified in the provisional SSI certificate dated 13-8-1992 produced before us [which] is for the period 13-8-92 to 12-8-94 and is relevant for the importation in question. We were also informed during the hearing that they make power packs and sell them as such for use in the torch lights by the manufacturers of torch lights. Power packs are not mentioned as one of the specified items. The sale of power packs in fact would show that the respondents are selling the cells as such after putting them in combination. In view of the above the respondents cannot be considered to be Actual Users for the purpose of import under the Public Notice 32-(PN)/92-97 referred to supra. The respondent have also pleaded that the earlier import made by them at the Airport was allowed and therefore it should be taken that their importation under OGL had been correctly made. I am not able to appreciate this plea of the respondents that in case a wrong release has been made they should reap perpetual benefit therefrom. The release, if any, would have been made at the instance of the respondents holding themselves to be the Actual Users for consumer durable goods Which fact is not borne out by the evidence and the pleas made before us. In view of the above I hold that the learned lower appellate authority was in error in having allowed the respondents' appeal for having imported the goods under OGL. I, therefore, hold that the goods are liable to confiscation and the learned lower original authority's order has to be upheld. It is seen that for a value of Rs. 3,86,899 a redemption fine of only Rs. 2,00,000 was imposed by the original authority and this redemption fine cannot be considered excessive in the facts and circumstances of the case. I, therefore, allow the appeal of the Department.
Whether in the facts and circumstances of the case the respondents are eligible to import the goods under OGL for the reason that the respondents are covered by the provisions of Public Notice 32(PN)-92-97 dated 17th July, 1992 and there has been an earlier release of the same goods by the Airport Customs authorities, as held by Member (Judicial) the respondents' goods have been rightly held by the learned original authority as not covered by the OGL for the reason that these are consumer goods as the same are intended for use in torch lights and are sold as power packs which are not consumer durables and also that the respondents cannot be considered as Actual Users and, therefore, not eligible for importation of the goods under Public Notice 32(PN)/92-97 and that the goods are liable for confiscation and the redemption fine fixed by the original authority is not excessive and, therefore, the impugned order has to be set aside and also for the reason that it is a cryptic order without setting out the reasons for allowing the respondents' plea, as held by Member (Technical).
Sd/- Sd/- 7. This appeal was filed by the department against the order passed by the Collector of Customs (Appeals) under Order No. C3/Addl 3/93, dated 31-3-1993. After the appeal was taken up by the Hon'ble Members, difference of opinion arose and the case was referred to me as the 3rd Member by the learned President.
8. The difference of opinion is to the effect that: whether in the facts and circumstances of the case, the respondents are eligible to import the goods under OGL for the reason that the respondents are covered by the provisions of Public Notice 32(PN)-92-97, dated 17th July 1992 and there has been an earlier release of the same goods by the Airport Customs authorities as held by Member (Judicial), or the respondents' goods have been rightly held by the learned original authority as not covered by the OGL for the reason that these are consumer goods as the same are intended for use in torch lights and are sold as power packs which are not consumer durables and also that the respondents cannot be considered as Actual users and, therefore, not eligible for importation of the goods under Public Notice 32(PN)/92-97 and that the goods are liable for confiscation and the redemption fine fixed by the original authority is not excessive and, therefore, the impugned order has to be set aside and also for the reason that it is a cryptic order without setting out the reasons for allowing the respondents' plea, as held by Member (Technical).
9. Shri R. Victor Thyagaraj, the learned SDR appeared for the Department and Shri K.S. Kumaraswamy, the learned Consultant appeared for the respondents. The learned SDR contended before me that the goods imported in this case are Nickel Cadmium Batteries. He pointed out that these are consumer goods. He further stated that after purchase of 3,00,000 pieces of Nickel Cadmium Batteries by the respondents, the buyer and the seller would jointly promote the sales of Hi-Watt Brand Nickel Cadmium Batteries in India. He took me through the agreement and stated that from the gentleman's agreement and the catalogue produced by the respondents, it is seen that the respondents were engaged in directly selling the goods in India, as per the said Gentleman's agreement. He also brought as evidence Public Notice No. 32(PN)/92-97, dated 17-7-1992. In this connection he pointed out that Nickel Cadmium Batteries are consumer goods under para 57 of the Policy AM 1992-97 and these are to be imported against specific licence. He also pointed out that Nickel Cadmium batteries are sold directly as it was consumer goods, by the respondents and their manufacturing activity is only for a 10,000 numbers of re-chargeable and emergency lamps per annum. He stated that the imported batteries are consumer goods and thus cannot be equated with re-chargeable batteries and the respondents are not the actual users and the actual user condition cannot be accepted. He also referred to the Public Notice 32(PN)/92-97, dated 17-7-1992 wherefrom it is seen that the goods should be used for actual manufacturing activity whereas according to the Gentleman's agreement and the catalogue produced, it is seen that the respondents are engaged in trading activities and the respondents' claim is therefore not acceptable.
10. In reply to the above points, Shri Kumaraswamy, the learned Consultant appearing for the respondents in the first instance drew my attention to the findings of the adjudicating authority wherein he has stated as follows : The learned Consultant contended that the adjudicating authority has come to the conclusion that the Respondents are the actual users and has given a finding in favour of the respondents. He also pointed out that the goods in question cannot be used directly for torches or emergency lamps or in any other way and these Cadmium batteries are required to be further charged for about 8 to 14 hours and then only these can be used either in the torches or in some other applications.
In such circumstances he pointed out that reasoning that these are consumer goods cannot be accepted in view of the fact that these cannot be used as such. He further pointed out that the respondents are the actual users and this factual position is proved by the certificate issued by the Director of Small Scale Industries which was produced in the original stage as also before the Tribunal. Therefore, he pointed out that in the face of these evidence, the adjudicating officer came to the conclusion that the respondents are actual users. He therefore stated that the respondents are entitled to avail of the benefit of Public Notice PN(32) /92-97 dated 17-7-1992.
11. With respect to the order passed by learned Member (T) the learned Consultant pointed out that torch lights are also consumer durables and the observation of Member (T) that it is not, may not be agreed to. He further pointed out that Member (T) has held that torch lights are sold in the same way as household articles etc. He pointed out that this is not the test to find out whether the item is a consumer durable or not.
He also pointed out that Member (T) has quoted in his order the dictionary meaning of consumer durables. According to this meaning, he pointed out torch light is a consumer durable, he pointed out torch light is a consumer durable. He pointed out that once it is held that it is a consumer durable these can be imported within the purview of Public Notice PN (32)/92-97, dated 17-7-1992. He also pointed out that the further point dealt with by the Hon'ble Member (T) is in regard to SSI certificate. To this he drew my attention to paras 4 to 6 of the order of the Collector (Appeals) wherein he had discussed the scope of Public Notice 32(PN) 92-97, dated 17-7-92 and its applicability to the goods imported in this case. He also stated that the respondents have been recognised as actual users by the adjudicating authority himself.
He also pointed out that the reasoning of the learned Member (T) that the order passed by the adjudicating authority is a cryptic order is not correct, in view of the fact that the same was discussed in detail by learned Member (T). He further pointed out there were several cases of allowing clearances of identical goods in Hyderabad, and also in Madras. He also conceded that these are later releases. He further pointed out that in terms of the order of the Collector (Appeals), the High Court has also ordered for the release of the goods and the respondents also took release of the goods. He also pointed out that consumer goods are relatable only to consumer durables and accessories including consumer goods which satisfy directly human needs. Therefore, he pointed out that actual users who were importing consumer goods and component parts and who are manufacturing consumer goods can import the same, after ITC Public Notice No. 32 is withdrawn.
12. Shri R. Victor Thyagaraj the learned SDR reiterated the reasonings of Hon'ble Member (T) as well as the grounds of appeal.
13. I have considered the submissions made by both the sides. In the first instance the learned Member (Technical) has held that used secondary batteries are usable for consumer applications and since it has been admitted that the same are used for torch lights, it is a consumer article and therefore, the use of the batteries has to be considered in relation to consumer articles. In essence he held that torch light is consumer article. With respect, I am not able to agree with his finding. As per the EXIM policy consumer goods mean any goods which can directly satisfy the human needs without further processing and includes consumer durables, accessories, components, spares for consumer durables. In this case, Nickel Cadmium batteries did not satisfy this test. They are to be charged in the first instance for use in the torch lights. In this respect Nickel Cadmium batteries differ from Zinc carbon dry cell and Zinc Manganese Di-Oxide cells which can be used immediately on purchase. Therefore, it cannot be said that Nickel Cadmium batteries are consumer goods. They are only used in relation to consumer durables. It is further seen that the respondents have claimed that they can import these goods in terms of Public Notice 32(PN) /92-97, dated 17-7-1992.
14. The concession is available in respect spares of consumer durables.
The batteries imported by the respondents are not covered by the negative list. The learned Member (T) held that these are not consumer durables. The definition of durables as quoted by learned Member (T) as found in the Websters dictionary is to the effect that use of these goods continues for a number of years and is not consumed or destroyed in a single usage. But it was held by learned Member (T) that torch lights are sold by dealers as consumer durables which are in the nature of household appliances. In the first instance there is no evidence available in this regard. There is also no evidence to show that torch cells are sold generally at the shop which deal in consumer goods. I am of the view that these goods i.e. Nickel Cadmium batteries imported are intended for use in consumer durables like torch lights. The reasoning of the learned Member (T) is that Torch continues its use for a number of years and it is not consumed or destroyed in a single usage. With respect I am not able to agree with the views expressed by learned Member (T). Learned Member (T) further held that the respondents are not using the same as actual users. In this respect it is seen that the learned adjudicating authority did not dispute about this fact. The learned adjudicating officer in his order at the finding portion in the last sentence has held as follows :- "Being actual user and no mala fides are proved I refrain from imposing any personal penalty".
It is thus seen that the learned adjudicating authority has come to the conclusion that the respondents are the actual user. It is on this finding that he did not impose any penalty on the respondents.
Therefore the department not having filed any appeal against this non-imposition of penalty on the appellant, it is clear that the department also has admitted this position. This is further strengthened by the letter issued by the Industries Department dated 27-12-1993 addressed to the Collector of Customs. In that letter also they certified that the respondents are the actual user. These facts were not taken into consideration in the order passed by the learned Member (T) in coming to the conclusion that the respondents are not the actual user. It is thus seen that this position was accepted by the Department as there was no appeal filed by the Department about the non-imposition of penalty on the respondents by the Additional Collector on the ground that they are actual users. This is also further corroborated by the certificate given by the Industries Department. In this view of the matter I respectfully disagree with the finding of the learned Member (T) that the respondents are not actual users. Therefore, when the adjudication order as well as the conduct in not having filed any appeal against the order of non-imposition of penalty, clearly indicates that the respondents are the actual user and it becomes the accepted position. Therefore they can automatically avail of the facility allowed by Public Notice 32(PN)/92-97 dated 17-7-1992 whereby actual user can freely import accessories/component parts and spares of consumer durables.
16. It is further seen that there were past clearances of similar goods on two occasions which was also pointed out before the Bench. This fact was also dealt with by learned Member (T) but it was stated that merely because, there were some mistakes in the past the same could not be repeated. It is true that if there are mistakes in one or two cases, the same should not be repeated, but the respondents had produced before me the following entries as well as the photostat copies of the BE to say that the order of the Collector of Customs whereunder the similar goods have been cleared.
17. In view of above reasoning, I agree with the reasoning given by learned Vice President that the respondents are covered by the above said Public Notice and accordingly, the departmental appeal is dismissed.
18. The papers may now be placed before the Regular Bench for passing necessary orders in this regard in view of the opinion furnished by me.
In view of the majority decision, the appeal filed by the Department is dismissed.