TMI Blog1994 (3) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... f para 186(10) read with provisions of para 185. They claimed that they have operated upon the licence for importation of goods on behalf of the licence holder M/s. Hindustan Spinning Weaving Mills Ltd. in terms of agreement dated 1-4-1985. 1.3 However, objection was raised by the Department against releasing the goods under the said licence on two grounds : (i) The goods have been sold by the licence holder M/s. Hindustan Spinning Weaving Mills, prior to their importation on High Sea Sales basis and this is in contravention of clause 5(3) of the Import Trade (Control) Order, 1955. Since the appellants are not the actual users, the licence holder could not have transferred the property of the imported goods prior to the importation and clearance thereof; (ii) The goods are not spares as contended by them. They are complete items by themselves and they cannot be categorised as spares. Hence, they could not be disposed of to any person as per para 186(10) read with para 185 as claimed by them. 1.4 In view of the aforesaid objections, adjudication proceedings were initiated by the Collector of Customs, who ordered confiscation of consignments covered by both the Bs/E and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are because it is an assembly of components and in the case of sodium vapour lamps, even if one of the components gets damaged, the entire bulb has to be replaced and hence it is `spare going for replacement of another lamp, when it is become faulty on account of wearing out of any component of the lamp. It is not open for the Department to construe the definition of spares in the context of its requirement in a machine or any gadget. There is already a clarification from the licensing authority to the effect that such sodium vapour lamps can be cleared under OGL Appx. 1 as components. Hence, in the context of this clarification, this can be construed to be a spare for street lighting. Fiscal statute has to be interpreted strictly according to the words used in the statute. In this context, he seeks to rely on the decision of the Supreme Court reported in 1978 (2) E.L.T. (J 350) (SC) = AIR 1970 S.C. 755 and also of the decision of the Bombay High Court in the case of Tata Engineering Locomotive Company Ltd. He also points out that there is no allegation in the finding that it is a consumable item and hence banned for import. In the circumstances, heavy redemption fine and penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances, we are not pursuaded with the arguments of the ld. advocate that merely because delivery orders have been issued after adjudication, there is no High Seas Sales. There is a clear contravention of clause 5(3) of the Import (Control) Order, which cannot be dismissed as a mere technical omission. Even if the items imported are assumed to be spares, the relaxation in terms of proviso to clause 5(3) of the Import (Control) Order is available only in respect of sales to actual users under the Import Policy for registered exporters and not for sale to traders. It is not the case of the appellants that they are the actual users as per the import policy for registered exporters. They are trading concern and hence the sale of the goods on High Seas Sales Basis to the trading concern, even in respect of spares, is not permitted under clause 5(3) of the Import (Control) Order. Hence, on this ground itself, the order of confiscation and imposition of redemption fine can be upheld. 3.2 However, for purposes of record, we have considered their plea for treating the items as spares and hence can be transferred to any person by the licence holder as per para 186(1) of the Polic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efully considered these submissions by looking into all the items specified in para 186(9). We find that invariably, most of the items are either machinery or equipments, barring a couple of items like the one specified in 85.20. If we go strictly by what is contained in para 186(9), only the spares of items falling under the specified headings can be allowed import, in which case, only components of the bulb could be allowed import. But the ld. advocate pleads that components of the bulb cannot be needed as spares; because even if one component of the bulb is worn out, the entire bulb has to be replaced. In such circumstances, a benevolent construction of the entry 85.20 specified in para 186(9) is called for and not a strict intrepertation as pleaded by the counsel. As per the definition of components laid down in the Policy, component means - One of the parts or sub-assemblies or assemblies, of which a manufactured product is made up and into which it may resolve and includes an accessory (or attachment) . Whenever, a component gets worn out, it is required to be replaced and that has been termed as spares in para 5(11) of the Policy. Such being the case, it would be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er : P.K. Desai, Member (J)]. - While agreeing with the order as proposed by my learned brother, I would like to say that the plea of High Sea Sale and in the alternative sale after import put forward by the appellants, suffers from high degree of infirmity. The agreement alleged to be the one for the High Sea Sale is entered into on 1-4-1985, the date of invoice drawn by the foreign supplier is 28-6-1985. Thus even the placement of order by the so-called High Sea seller and ostensible importer, namely Hindustan Spinning Weaving Mills is much after the agreement for High Sea Sale. This is beyond the very concept of High Sea Sale, where the sale is effected when the goods are in transit. Here however, even the order was not placed to the foreign supplier when the alleged agreement was entered into. Further the alleged agreement for High Sea Sale opens with the words we hereby agree to import spares on your behalf . In Column Price and mode of payment there is a mention - you will pay us a consideration of 10% net on the C.I.F. value mentioned in Clause (B) above, as Service Charges towards arranging import.......... This too is contra indicative of a genuine transaction of H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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