1989 (4) TMI 223 - AT - Customs

Summary

Issues:
1. Interpretation of the Import Policy 1985-88 regarding the eligibility of import of Hop pellets under the Open General License (OGL).

Analysis:
The judgment involves two appeals concerning the import of Hop pellets and the applicability of the Open General License (OGL) under the Import Policy 1985-88. In the first appeal, MK Fisheries imported Hop pellets and claimed clearance under OGL Appendix 6 Item No. 1. However, Customs House classified the import under Serial No. 13 of Appendix 2 Part B, leading to confiscation and a fine. In the second appeal by Metro Exports for the same goods, Customs initially cleared the import under OGL but later sought a review, resulting in penal action against Metro Exports. The central issue was whether Hop pellets could be cleared under OGL Appendix 6 Item No. 1, excluding items in Appendices 2, 3 Part B, 5, and 8.

The appellants argued that Hop pellets are distinct from Brewery Hops and not covered by Serial No. 13 of Appendix 2 Part B. They contended that the processing of Brewery Hops into Hop pellets did not constitute manufacture as per judicial pronouncements, emphasizing that the end use of both products was the same. The Department, on the other hand, asserted that the inclusive definition of Serial No. 13 covered Hop pellets, highlighting the technicalities in the review order under Section 129(D) (2) of the Customs Act.

The Tribunal analyzed the process of producing Hop pellets from Brewery Hops, emphasizing that mere physical changes do not always amount to manufacture unless a new distinct article emerges. Considering the Supreme Court's interpretation of 'manufacture,' the Tribunal concluded that the processing of Brewery Hops into Hop pellets did not result in a new manufactured product but rather pelletized Brewery Hops. The amendment adding 'in any form' to Serial No. 13 did not alter this conclusion, as Hop pellets were already covered under the existing entry. The technical infirmities in the review order were deemed non-fatal, aligning with the reasoning of the Collector (Appeals).

Ultimately, the Tribunal upheld the lower authorities' orders, rejecting the appeals and affirming the decision that Hop pellets were not eligible for clearance under OGL Appendix 6 Item No. 1, as they fell within the scope of Serial No. 13 of Appendix 2 Part B of the Import Policy 1985-88.