| SooperKanoon Citation | sooperkanoon.com/5313 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai |
| Decided On | Nov-15-1989 |
| Reported in | (1990)(48)ELT526Tri(Mum.)bai |
| Appellant | American Dry Fruits Stores |
| Respondent | Collector of Customs |
3. In this Reference Application, the applicants have prayed for reference to the High Court under Section 130 of the Customs Act on the following grounds :- (i) Whether or not, on a correct interpretation of the provisions of the Import Policy for 1983-84 (Volume I) the REP Import Licence No. 3005290 dated 27-10-1983 held by the applicants covered raw materials consisting of dry fruits imported by them.
(ii) Whether Para 138(1) of the 1983-84 Import Policy Vol. I read with para 138(4) thereof excludes from the purview of para 138(1) all goods mentioned in Appendix 4 of that Policy irrespective of whether or not they are raw materials OR the said Para 138(1) read with para 138(4) excludes only those goods in said Appendix 4 which are nothing but raw materials.
(iii) Whether or not, on a correct interpretation of the Open General Licence for the period 1985-88 the raw material consisting of dry fruits could be imported under the said Open General Licence by an Actual User (Industrial) holding registration for manufacture of food products for which dry fruits are raw material.
(iv) Whether Item 1 of the said Open General Licence excludes from its purview all goods mentioned in Appendices 2, 3, 5 and 8 of the 1985-88 Import Policy (Vol-I) irrespective of whether or not they are raw materials components and consumables OR the said Item 1 excludes only those goods mentioned in the said Appendices which are nothing but raw materials component and consumables.
(v) Whether the definition of "consumer goods" in the Import Policy for 1983-84 as well as in the Import Policy for 1985-88 includes raw material.
4. Mr. J.C. Patel, the learned advocate on behalf of the applicants, at the time of hearing, however, submitted that the main point that requires to be referred to the High Court is "Whether the REP licence issued under 1983-84 AM Policy was valid for import of Hard shell almonds, Dry Figs, Raisins as raw material by Actual User for their end product." Mr. Patel submitted that the applicants are the manufacturers of Chutney Burfi, Chaura etc. and export them. They had obtained REP licence and had imported almonds, figs and raisins from Karachi and had sought clearance under the said REP licence as raw material. The clearance was denied on the ground that the Policy did not permit such import. In the adjudication that followed, the Additional Collector held the import as not permissible and ordered confiscation of the same. However, permitted redemption on payment of redemption fine of Rs. 3,30,000/- in lieu of confiscation. The pplicants filed the appeal before the Tribunal and the Tribunal vide its order dated 28-11-1985 rejected the applicants' appeal and confirmed the order of the Additional Collector. While considering the appeal the Tribunal had considered the whole case on the points as indicated below : (ii) Whether the goods cease to be consumer goods because the Policy permits import for stock and sale? (iii) Whether the REP Licence against which clearance was sought is valid for the import of the goods in question? and (iv) Whether the goods in question could have been imported as OGL items? 5. The Tribunal came to the conclusion that what was imported were the consumer goods and were not importable under REP licence.
6. Mr. J.C. Patel submitted that the REP licence was issued to them and drew our attention to Para 138 of the Policy AM 1983-84 and submitted that the only prohibition against import of raw material was found in Sub-para 5 of the said paragraph which reads : He then took us through Appendix 4 of the Policy and submitted that serial number attracted would be serial No. 93 which provides that "All consumer goods, howsoever described, of industrial, agricultural or animal origin, not appearing individually in Appendices 3, 5, 8 and 9 or specifically listed for import under Open General Licence." He then submitted that this particular Appendix 4 relates to non-permissible items that is, banned items and submitted that only such of the consumer goods which are totally banned for import can only be called as falling within the purview of Serial 93 and then submitted that under Chapter 12 of the Policy, Paragraph 79 permits import of fresh fruits, dry fruits and Dates for the purpose of stock and sale, and as such they are not banned items or totally prohibited under Appendix 4 and as such the prohibition imposed vide Sub-para 5 of para 138 of the Policy would not stand attracted and as such the dry fruits almonds, figs and raisins are permissible for import under REP licences as raw material. He also submitted that it is not a point of dispute now in view of the finding given by the Bench in the impugned order, that those items are raw material for the purpose of manufacture of the products by the applicants. He, therefore, submitted that this being the position, the view taken by the Tribunal is inconsistent with the provisions of law. In any case when the interpretation put by him is probable and when the Tribunal has taken a contrary view, there is a case, where reference under Section 130 of the Customs Act be made to the High Court.
7. Shri K.M. Mondal, the learned SDR, for the department, objected the prayer on the ground that the questions involved here are not the questions of law but are questions of fact. He submitted that in appreciating the provisions of Sub-para 5 of Para 138 of the Policy AM 1983-84, what is essential is whether the Policy permitted import of that material under REP licence, and that all the entries in Appendix 4, are treated as not importable. According to him, even restricted items, would also be taken as banned items for the import under REP licence. He however laid much stress on the decision of the Supreme Court in Indo Afghan Chambers of Commerce and Anr. v. Union of India and Ors.- reported in AIR 1986 SC 1567 and submitted that the items imported by the applicants have been held as dry fruits by the Supreme Court in the said judgment and as such they are not raw material. The REP licence permitted only import of raw material and when these are not raw material, import was prohibited and the Tribunal judgment is proper.
8. The main point to be considered for the purpose of referring the matter to the High Court is whether there exists any disputed point of law, where clear interpretation is not available and some positive finding on proper interpretation of the legal provisions is called for.
9. The main thrust of the Tribunal, in its impugned order is on the point that the items imported being the consumer goods, are not importable under REP licence. The items imported are undjsputedly known as dry fruits. According to Mr. Patel, the items are used as raw material by the appellants and that they are raw material for the appellants who arc the exporters of the finished product, is the fact accepted even by the Tribunal. According to him the Tribunal has rejected the claim only because the items are consumer goods, which in view of his submission, could include only the "Banned Consumer Goods".
10. The Supreme Court had, before it a similar point for consideration, though under slightly different set of facts in Re : Indo Afghan Chamber of Commerce (Supra). There the Diamond Exporters sought to import dry fruits under additional licences given to them, and the Policy period in question was AM 1985-88. The plea raised there was that the Diamond Exporters were importing dry fruits for stock and sale as raw material. The Supreme Court however held in para 10 of the Judgment as under : "There can be no dispute that the dry fruits must be regarded as consumer goods of agricultural origin." This finding was in reference to the item No. 121 in Appendix 2 Part B of the Import Policy AM 1985-88, and then negativing the contention that Item 121 was not attracted as it referred to consumer goods and consumer goods are not raw material, the Supreme Court held : "We are not satisfied that the "consumer goods" in Item 121 of Appendix 2 Part B, cannot refer the dry fruits imported for supply to actual users (industrial)." Examining the parity between the provisions in different policies, the Supreme Court in Para 11 of its judgment observed : "...It was declared that the items excluded from import by diamond exporters under Additional Licences under the Import Policy 1985-88 were the items enumerated in Appendix 3 and Appendix 2 Part A of that Import Policy. Appendix 2 Part A is the successor of Appendix 4 (List of Absolutely Banned Items) of Import Policy 1978-79. A question arose before us whether Appendix 2 Part B of Import Policy 1985-88 could also be regarded as a successor of Appendix 4. It appears from the material placed before us that Appendix 2 Part B (List of Restricted items was also successor of Appendix 4 in the Import Policy 1978-79 was described as the Absolutely Banned List.
In the Import Policy 1982-83, the same Appendix 4 is described as List of Non-permissible Items (Banned). The same description of Appendix 4 continued in the Import Policy 1983-84. During that year Beef Tallow was added in Appendix 4. In the Import Policy 1984-85, Appendix 4 became Appendix 2 Part A and Appendix 2 Part B. Appendix 2 Part A was described as a List of Banned Items and Appendix 2 List B was described as List of Restricted Items. In the contents of the Import Policy 1985-88 the list of Appendices makes clear that Appendix 4 of Import Policy 1983-84 became Appendix 2 Part A and Appendix 2 Part B of the Import Policy 1984-85. The same description of Appendix 2 Part A and Appendix 2 Part B was continued in the Import Policy 1985-88. Therefore, it is apparent that the present; Appendix 2 Part A and Appendix 2 Part B constitute together what was originally List 4 (List of Absolutely Banned Items) under the Import Policy 1978-79. On the reasoning which found favour with this Court in its judgment dated 5 March, 1986 we hold that diamond exporters holding Additional Licences were not entilled to import goods enumerated in Appendix 2 Part B of the Import Policy 1985-88. On that ground also the respondents diamond exporters are not entitled to take advantage of Item 121 of Appendix 2 Part B for the purpose of importing dry fruits. As held by this Court in its judgment dated March 5, 1986, holders of Additional Licences are entitled to import only those goods which are included in Appendix 6 Part 2 List 8 of the Import Policy 1985-88. Dry fruits are not included in that List and therefore they cannot be imported under Addl. Licences." The Supreme Court therefore held that import of dry fruits by Diamond Exporters was not permissible.
11. The learned advocate Mr. J.C. Patel, however, tried to distinguish the said judgment, principally on the ground that the question before the Supreme Court was of additional licence and not REP licence, and secondly the Tribunal has in the instant case, already held that the items imported by the appellants are raw material for them. Though the question before the Supreme Court was of Additional licence, the ratio of point decided by the said Court, is that dry fruits are consumer goods of agricultural origin and not importable under the licence issued. The position may not alter materially, even when the same are imported under REP licence, unless there is a specific provision to the contrary made, and no such specific provision exists here. Further, when the Supreme Court has placed the provision of Appendix 2 of Policy AM 1985-88 at par with those of Appendix 4 of Policy AM 1983-84, as indicated above, there remains no scope to interpret the provisions of Para 138 of Policy AM 1983-84, and Appendix 4 of the same Policy, as standing on different footing. Consequently therefore, we are of the opinion that no interpretation, other than the one made by the Tribunal appears probable, and that therefore, the point poised by the learned advocate for reference to the High Court vide Section 130 of the Customs Act cannot survive.