TMI Blog1984 (6) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... against licence No. P/L 0336788/C/83/X/82 dated 26-6-82 at the port of Madras. The licence would be valid for the import of industrial stapling machines. The Deputy Collector held that the goods imported are not industrial stapling machines though they may even be used to fix staples on the polythene covers in which garments are packed now-a-days, or to affix price tags, etc. In fact, such staplers are commonly used these days even in packing provisions, etc. sold by more sophisticated retail stores. HD-10 and HD-100 are staplers with multifarious uses some of which may be in industry and trade, but by that token, as observed, they do not become industrial stapling machines. On a finding that MAX HD-10 staplers are not industrial stapling machines, he held that the import licence produced was not valid for the importation ; he ordered confiscation of the imported goods under Sec. 111 (d) of the Customs Act, 1962; however, he fixed a fine in lieu of confiscation of ₹ 40,000/-. The case went in appeal to the Collector of Customs (Appeals), Madras. That Collector, for the reasons stated in his order referred to the supra, held that a stapling machine capable of use in the ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the First Schedule in the Customs Tariff, 1975 (I.C.T.) contained therein will apply to the clearance of consignments imported under this policy. stapling machines are classified in the I.C.T. under heading No. 84.51/55. All the items referred to in that heading cover office machines of one type or the other. The practice of assessment in the Custom House is to classify the imported goods under this heading. Further, according to Note 5 under Chapter 84, a machine which is used for more than one purpose is, for the purposes of classification, to be treated as if its principal purpose were its sole purpose. In the present case the principal purpose of the stapler HD-10 is clearly for uses in offices and homes hence it cannot be treated as an industrial machine. (iv) For the purposes of Central Excise Tariff, stapling machines are office machines under Item 33-D of the Tariff. (v) Referring to paragraphs 4, 5, 6 and 7 of the order of the Collector, the S.D.R. argued that the finding of the Collector that the word industrial cannot be chosen in isolation leaving aside the context involved , is not quite correct. In fact the Collector has not appreciated the context inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... object is to provide to the Registered Exporters, by way of import replenishment, the materials (all or some) required in the manufacture of the products exported. The object is to supply articles used by an exporter. In the present case the stapling machines are used in the packaging of garments. This interpretation is further strengthened even if one refers to the other items which are allowed import under Sl. No. 0.01, Entry-(ix) : these include Pearl headed pins/ stapling pins and industrial stapling machines . So long as the goods are put to use in or in connection with an industry it would be in keeping with the objective of the licensing policy. (ii) I.S. : 5349-1969 lays down specifications for staplers. It. deals with two types, Desk Type and Plier Type staplers. That the goods imported are not of the desk type does not detract from their being considered as industrial machines. (iii) A further factor in support of the claim that goods should be allowed clearance under the licence is that staples used in the very stapling machines (MAX-10) are allowed clearance under a licence for 0.1 of Appendix 17 hence the machines with which the stapler is sold should al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court has held that the possibility of use of onion skin paper as base paper for the manufacture of wax paper for use as packing material will have to be kept in view in interpreting an I.T.C. Entry which cover the import of wax carton printed. Master carton printed and the raw material required for manufacture of packing materials like cardboard, corrugated cardboards waxed or otherwise for exports. Applying the above principle to the present case, the machines are capable of use for packaging; and these uses could be recognised as industrial; the goods should thus be classified as industrial machines . 6. (i) In reply Senior Departmental Representative referred again to para 128 of the Policy Book and stressed that not all goods imported needed by a registered exporter were to be allowed under the REP scheme. The para specifically provides all or some that would be allowed. (ii) The ISI specification does not distinguish between industrial stapling machine and others, the point at issue before the Tribunal. (iii) The decision of Special Bench B of CEGAT in relation to industrial sewing machines is not apt in the present context where the Tribunal had to interpre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l) ; another the Webster s Third International gives a broader meaning to the term. There is no reason as to why one particular meaning should be taken in preference to the other. 8. The policy regarding the issue of REP licence is of no help either. Though para 128 of the Policy Book states that the object is to provide materials required in the manufacture of products exported, as rightly contended by the S.D.R., replenishment may be in respect of all such requirement or some of it. 9. The ISI specification, IS 5349-1969, laying down specifications for staplers does not deal with industrial staplers as distinct from other. It covers the desk type and the plier type staplers. Either could be an industrial stapler depending upon such factors as to the design, intended use and the general uses to which the goods are generally put. 10. The plea that staples for these very machines are allowed clearance under Appendix 17 (Entry 0.1) is not significant in the present context. There is no adjective to the word staples unlike in the case of stapling machines. That all types of staples are allowed clearance does not affect the distinction sought to be drawn by the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ork, with the indicated use in offices and home (or perhaps in the bazaar) for packaging, cannot be treated as an industrial stapling machine. We are strengthened in this view when we look at the intended use of some other machines such as HD-12L and HD-JD. 14. In view of the above finding, the clearance, if any, on any earlier occasion should be deemed to have been in error, if they were so cleared and in identical circumstances. (There is a suggestion that policy had changed in the meantime). It has been held in the case of sewing machines that such machines may be used in industrial establishments would not detract the position that they are basically domestic. Here too that the present model of stapling machine may be used in an industrial establishment should not detract from the basic nature of the article that it is a general purpose machine intended for light tacking work. 15. The decision of the Madras High Court cited by the Respondents does not alter the position. In that case cited, the Court has confined the examination to the issue of capability of use of an imported item as a raw material for manufacture of end-products irrespective of the other qualities of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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