TMI Blog1991 (5) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... e No. date, description of goods, Date of shipment, Date of filing of Bill of Entry, Date of arrival, and the Entry under which the importers claimed the clearance of the same. Purchase Order No. Invoice No. Date Description of goods Date of shipment (1) (2) (3) (4) (1) EMSB/ 001/90/E5 EMSB/1003/90E dated 30-10-90. Plastic Extruded Ball Pen Barrels 30-10-90. Vessel ILOVIK (2) EMSB/ 002/90/E5 EMSB/1002/90E dated 19-10-90. Plastic Extruded Ball Pen Knobs Caps. 19-10-90. Vessel ALCOR (3) EMSB/ 003/90/E5 EMSB/1001/90E dated 5-7-90. Ball Point Refills 5-7-90 Vessel M.V. TIGER RIVER Date of Filing of B/E Date of arrival Licence Produced Entry under which Licence covered. 5 6 7 8 26-11-90. 22-11-90 P/L/3444665/C/XX/16/M/89/64 0001-00-9 dated 25-6-90. Entry No. 665 Appendix 3, part A 31-12-90 1-11-90 P/L3444665/CXX 16/M/89/640001-00-9 dated 25-6-90. Entry No. 665- Appendix 3 Part A 27-790 21-7-90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ball point refills. Likewise, Sl. No. 665 of Appendix 3, Part A of the same Policy would cover Plastic extruded/moulded/fabricated components. The learned Consultant, therefore, submitted that what has been expressly excluded by Sl. No. 172 cannot be brought under Sl. No. 172 for penal proceedings against the appellant in the factual background of this case. The learned Consultant also assailed the reasoning of the learned adjudicating authority, who has placed reliance on the ruling of the Supreme Court in the case of Sharp Business Machines Pvt. Ltd. v. Collector of Customs, reported in 1990 (49) E.L.T. 640 (S.C.). The learned Consultant contended that the learned adjudicating authority has misdirected himself in construing the ratio of the ruling of the Supreme Court in the said case by holding that what cannot be done directly cannot be done indirectly by the importers. It was contended that the essential distinguishing feature in the case before the Supreme Court was that more than 62% of the components of the copiers was not permissible for import under the relevant Policy as it stood at that time and in that particular case the fact remains that the import was 100% clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the Tribunal held in that case that the components of TV if clubbed even though would constitute TV set in SKD condition could not be construed to be TV set imported in contravention of law. 5. Shri Namasivayam, the learned DR, vehemently contended that the goods imported though at different times in the nature of components would, if assembled, result in Ball point pen viz. the consumer goods which would squarely come within the mischief of Sl. No. 172 of Appendix 2, Part B of the Policy dealing with restricted items requiring a specific licence. The learned DR further urged that as rightly held by the learned adjudicating authority following the ratio of the Supreme Court ruling in the case of Sharp Business Machines Pvt. Ltd. cited supra, what is not directly permissible cannot be indirectly done. The learned DR distinguished the ratio of the ruling of the Supreme Court in Tarachand Gupta s case and urged that in regard to the goods dealt with in that case viz. parts of motor cycle and scooter and also regarding the import of motor cycle there was no absolute ban or prohibition. The Supreme Court in Tarachand Gupta s case had to consider only the permissibility of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant Policy prohibiting the import of consumer goods without a specific licence. The allegation in the show cause notice against the appellant is that the goods in question were imported in SKD condition falling under Appendix 2, Part B, vide Sl. No. 173 of the relevant Import Policy. The relevant para of the show cause notice for the purpose of convenience is extracted hereunder : The import of Ball Point Pen in SKD condition falls under Appendix-2, Part-B, vide Sl. No. 173. But the importers have sought clearance as components as if the goods are falling under Appendix-3, Part-A against production of REP licences. The licences produced are not valid for import of item falling under Appendix-2B. Therefore, it appears that the importers have attempted to clear Ball Point Pens without producing a valid Import Licence, as the goods are falling under Appendix-2, Part-B, Sl. No. 173." In the entire impugned order no finding against the appellant has been given on the ground that the goods were in SKD condition coming within the mischief of Sl. No. 173 of Appendix 2, Part B, in regard to which alone there was a specific charge against the appellant in the show cause notice as woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e components of a fully finished and completed goods. Apart from it, it has been found by the Supreme Court in para 13 of its judgment in the said case that the goods in that case were covered by 3 Bills of Entry all dated 3-2-1987 and had been shipped from Hongkong on the same day i.e. on 21-1-1987 and the entire goods arrived on the same day and by the same flight on 30th January, 1987 and the goods covered by the Bills of Entry had been supplied by the same supplier viz., M/s. Paralax Industrial Corp. Hongkong, and the goods were in SKD/CKD condition. It is in that context the Supreme Court held that the licence produced was valid only for certain components and was not valid for fully assembled copiers . The ratio of the Supreme Court in Tarachand Gupta s case, in my view, would apply to the facts of the present case and it should be noted that Tarachand Gupta s case has also been decided by a Bench of two Judges of the Supreme Court as the case of Sharp Business Machines referred to in the impugned order. The Supreme Court in Tarachand Gupta s case had to construe the scope of Entry 295 and 294. Entry 294 dealt with import of motor cycles and scooters in CKD condition and En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t entry prohibits an importer who held a licence to import motor cycles and scooters from importing motor cycles and scooters in C.K.D. condition. Remark (ii) containing that prohibition had nothing to do with entry 295 which did not contain any limitations or restrictions whatsoever against imports of parts and accessories. 25. That being so, if an importer has imported parts and accessories, his import would be of the articles covered by entry 295. The Collector could not say, if they were so covered by entry 295, that, when lumped together, they would constitute other articles, namely motor cycles and scooters in C.K.D. condition. Such a process, if adopted by the Collector, would mean that he was inserting in entry 295 a restriction which was not there. That obviously he had no power to do. Such a restriction would mean that though under a licence in respect of goods covered by entry 295 an importer could import parts and accessories of all kinds and types, he shall not import all of them but only some, so that when put together they would not make them motor cycles and scooters in C.K.D. condition." I should like to note that the ratio of the Supreme Court ruling in Tarach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y metal barrels and components would be permissible for import and not plastic refills would lead to an anomaly, because apart from goods of plastic covered by Sl. No. 665 dealing with plastic extruded/moulded/fabricated components, there is no reason as to why the plastic refill alone should be discriminated against. To a specific query in this regard, the Ld. DR was not able to satisfactorily offer any explanation. In view of the ratio of the Supreme Court .in Tarachand Gupta s case and also the view taken by the West Regional Bench of the Tribunal in the case of Susha Electronics Industries, I do not find any force in the contention of the Ld. DR that the entirety of the product has to be looked into and individual sense cannot be looked into. As rightly contended by Shri Vijayaraghavan, the Ld. Consultant, the Department cannot for the purpose of duty assessment under the Customs Act treat parts separately and for the purpose of judging the validity try to correlate the various parts imported at different points of time by two Bills of Entry and to give a finding that all the parts and components should make for a full Ball Point pen. If the contention of the DR were to be acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods covered by Entry 294 could import assembled motor cycles and scooters, but not those vehicles in C.K.D. condition, unless he was a manufacturer and had obtained a separate licence therefor from the Controller of Imports who, as aforesaid, was authorised to issue such a licence on an ad hoc basis. Thus the restriction not to import motor cycles and scooters in C.K.D. condition was against an importer holding a licence in respect of goods covered by Entry 294 under which he could import complete motor cycles and scooters and not against an importer who had a licence to import parts and accessories under Entry 295. The goods as imported would not satisfy the definition of consumer goods which would mean for the purpose of Import Policy consumption goods which can directly satisfy the human needs without further processing. Before parting with this case, I should like to add that it is well settled proposition of law and canons of interpretation that if a Policy is capable of two different interpretations in a given context, the benefit of the same should go to the importer or the assessee as the case may be. Therefore, on consideration of the entire evidence on record and f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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