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1995 (6) TMI 24 - HC - Customs

Issues:
1. Requirement of registration as a Small Scale Industrial Unit for claiming benefits under the AM 1985 Policy.

Analysis:
The judgment in question revolves around the issue of whether the petitioners were obligated to be registered as a Small Scale Industrial Unit to avail the advantage of importing components through Open General Licence under the AM 1985 Policy. The petitioners, engaged in manufacturing trawlers and tugs, had a contract with Bombay Port Trust for the construction of tugs. The Additional Collector of Customs confiscated imported propellers for tugs as the petitioners were not registered as a Small Scale Industry Unit. The Customs Authorities directed confiscation subject to fines, leading to appeals dismissed by CEGAT. The Tribunal concluded that the petitioners needed to be registered as a Small Scale Industry and obtain registration from the Sponsoring Authority as per Appendix 7 of the Hand Book (1984-1985).

The petitioners argued that they were not required to be registered as a Small Scale Industry as they fell under the definition of "Actual User (Industrial)" in the Hand Book. They contended that the import of propellers was pursuant to the contract with Bombay Port Trust, which necessitated the importation of components for tug manufacture. The petitioners highlighted that the Import Policy did not specify a Sponsoring Authority for compliance in the case of manufacturing tugs. On the other hand, the respondents argued that the petitioners were involved in shipbuilding as per Appendix 7, thus necessitating Small Scale Industry registration.

The High Court analyzed the definitions of "Actual User" and the requirements under the Hand Book and Import Policy. The Court noted that the petitioners were an Industrial Undertaking with a Registration Certificate from the Central Government, falling within the category of "Actual User." It was observed that the Import Policy did not mandate Small Scale Industry registration for the petitioners. The Court emphasized that the petitioners' contract with Bombay Port Trust for tug manufacturing did not align with the Shipping Industry category mentioned in Appendix 7. The Court found merit in the petitioners' arguments, emphasizing that the importation was genuine and necessary for tug manufacturing, as certified by Bombay Port Trust. Consequently, the Court allowed the Writ Petition, ruling in favor of the petitioners.

In conclusion, the High Court held that the petitioners were not required to be registered as a Small Scale Industry to claim benefits under the AM 1985 Policy. The Court emphasized that the petitioners met the criteria of "Actual User (Industrial)" as per the definitions in the Hand Book and Import Policy. The judgment highlighted the genuine need for imported components in tug manufacturing, as certified by the contracting party, Bombay Port Trust. The ruling favored the petitioners, granting relief in the Writ Petition without costs.

 

 

 

 

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