1991 (6) TMI 157 - AT - Customs

Summary

Issues:
Appeal against order of confiscation and redemption fine imposed on a consignment of components of vertical machining centre under Phase Manufacturing Programme.

Analysis:
The appeal challenged the order-in-original confiscating a consignment of components of a vertical machining centre valued at Rs. 8,78,734 but allowing redemption on payment of a fine of Rs. 4,00,000. The dispute revolved around whether the import of the components in CKD condition complied with the Phase Manufacturing Programme. The appellants argued that the attestation by DGTD covered the import under the relevant policy provisions. The advocate highlighted para 219(7) of the Import Policy, emphasizing compliance with the List Attestation Procedure for phased manufacturing programs. The DGTD's subsequent clarification supported the appellants' position, stating that the import of components was covered under the relevant policy entry. The advocate also cited relevant case law to support their argument. The Tribunal noted that the attestation by DGTD covered the components for the machine in CKD condition under the Phase I Manufacturing Programme. The Tribunal found that the attestation procedure applied to components other than electronic components, as per the policy provisions. As a result, the order of confiscation for items other than the control panel and pendant was set aside.

The dispute regarding the import of the control panel and pendant, which operated on electronic components, raised concerns about compliance with the policy provisions. The DGTD's clarification excluded electronic components from the List Attestation Procedure, as per the policy. The Tribunal upheld the confiscation of the control panel and pendant, valuing Rs. 3.66 lakhs, due to the import of electronic components without proper authorization. The Tribunal emphasized the need for due diligence and care in importing items under the policy provisions. Despite the appellants' claim of bona fide, the Tribunal found that importing electronic components under the List Attestation Procedure was not permissible under the policy. The Tribunal upheld the redemption fine of Rs. 40,000 on the control panel and pendant, considering the phased manufacturing program and leniency required in the circumstances.

In conclusion, the Tribunal disposed of the appeal, upholding the confiscation and redemption fine on the control panel and pendant while setting aside the confiscation of other components. The judgment highlighted the importance of compliance with policy provisions and due diligence in importing goods under phased manufacturing programs.