TMI Blog1984 (10) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... ylene in Goa. Later on, the said letter of intent was converted into an industrial licence on or about 28th December, 1974. The Petitioners required containers of special kind for the production of the dissolved acetylene at their plant and since such containers were not produced or manufactured in India, they had to import them from abroad. Accordingly, they applied to the Government for an import licence in respect of the said containers which are known as 'empty dissolved acetylene cylinders'. The Central Government allowed the import of the said containers, inter alia, on the conditions that the cylinder to be imported should conform to the specifications approved by the Chief Inspector of Explosives, Nagpur. The Chief Controller imposed the condition that each cylinder shell shall be filled with Coyne type monolithic porous mass 90-92% porosity, charged with appropriate quantity of acetone and saturation gas. The petitioner placed an order for 750 empty dissolved acetylene cylinders with a firm of Austria. They made a query to the Appraiser of Customs, Marmagoa, introspect of the levy to be paid by them on the import of such empty dissolved acetylene cylinders. The Appraiser o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Customs, who by his order dated 18th April, 1977, rejected the appeal. Aggrieved petitioners preferred a revision application to the Central Government from the aforesaid order of the Appellate Collector of Customs. This revision application, however, was also rejected by order dated 16th June, 1979. Thereafter, on or about 13th December, 1976, petitioners supplied to the Assistant Collector of Customs for refund of the countervailing duty to the tune of Rs. 1,47,091.77 collected on the consignment of empty dissolved acetylene cylinders. By his order dated 17th December, 1976, the Assistant Collector of Customs rejected the aforesaid claims of refund as untenable. An appeal was preferred by the petitioners against the said order of the Assistant Collector of Customs and the said appeal was rejected by the Appellate Collector of Customs by order dated 19th April, 1977. Finally, the petitioners preferred a revision application to the Central Government against the order of the Appellate Collector of Customs, by order dated 17th September, the Central Government, however, rejected the said revision application. 3. Petitioners challenge the levy of duty under two different items on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solved acetylene cylinders would be dangerous, involving fire hazards. They submitted that for the purpose of duty, the cylinders are to be considered as metal containers and the saturation gas and acetone brought inside the said cylinders are different commodities which are, therefore, assessable for duty also. They further contend that the opinion given by the Appraiser of Customs House, Marmagoa, is not binding on an officer of any other customs house and even on himself. They further contend that, in view of the explanation to Section 2A, the said cylinders were assessable for countervailing duty. 5. As regards the first point, Mr. S.K. Kakodkar, learned Counsel appearing for the petitioners, submitted that the empty dissolved acetylene cylinders are a commercially and in the trade considered as containing a small percentage of saturation gas. This fact, though not established in the petition by documentary evidence, is nevertheless made clear and accepted by the concerned authorities of the Central Government itself since when the petitioners applied for a licence to import the said cylinders, the Central Government was pleased to grant such licence, inter alia, on the condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, held that the Customs Authorities were wrong and that the duty was to be levied as fountain pens complete since the gold plated nib was an integral part of the fountain pen. 6. This view was, however, opposed by Mr. P.K. Patkar, learned Counsel appearing for the respondents. He contended that if one of the conditions of the import licence was that some quantity of saturation gas should exist in the imported cylinders, nevertheless the duty to be levied was on the articles which were imported into India. He submitted that the empty dissolved gas containers are essentially containers and, therefore, they should be charged for duty under the respective item. And since some gas has also been brought into the container, duty is also payable on such gas. Mr. Patkar further contended that the cylinders do not lose their individuality and their identity only because some quantity of gas had been added, nor the gas loses its own identity. Therefore, according to the learned Counsel, two separate items had been imported into India and, therefore, both of them were assessable to duty. 7. It is not disputed that the petitioners had applied for licence to import the empty dissolved acety ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(25) defines 'imported goods' as meaning any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption. These definitions may give the impression that the submission of Mr. Patkar is correct. However, the question to be considered is what are the goods which are brought into India. In the case before us, a licence has been granted by the Central Government to import empty dissolved acetylene cylinders and some particular specifications to such item had been given in the import licence itself. Therefore, whatever is the name given to the goods which were imported, the important and material point to be considered is whether the article that was brought into India under the said import licence was or not conforming with the conditions laid down in the licence and was or not the article permitted to be imported. We already observed that it is not disputed that the cylinders, supplied by the Austrian firm to the petitioners and which are the subject matter of this petition, were strictly satisfying the requirements of the licence. If this is so, irresistibly, it follows that the items or goods imported by the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or appliances for industrial purposes. However, it was contended by Mr. Kakodkar that item 72(A) is having a larger field of application and item 72(C) is attracted in cases more specialized, since in item 82(A)(i)(d)(l), the only requirement is that the apparatus and appliances are for a specific industrial purpose, whereas the apparatus and appliances under item 72(C) should be those that are designed for use for industrial purposes and had been given for that purpose some special shape or quality which would not be essential for their use for any other purpose. It appears that the learned Counsel is correct in his view, and in fact, item 72(A) is of a larger and general application and that the apparatus and appliances which fall under item 72(C) are those which are part of the machinery utilized for the manufacture of a product. However, there is one aspect to be considered and that is that under the proviso to item 72(A), it is necessary that the contract is duly registered. Admittedly, the import licence and the contract for the import of the said cylinders had not been registered by the petitioners and in the circumstances, it would appear that the said cylinders could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls. The proviso requires, as such, not only the registration of the contracts with the appropriate customs house but, further, that such registration is done before any order is made by the customs officer for the clearance of the said goods. It is thus clear that unless and until an order is made for the registration of the contract, the goods which may fall for duty under item 72(A) cannot be assessed under the same item. Admittedly, such registration did not exist in the case before us and in the circumstances, whatever may be the reasons that caused the petitioners not to register the contract, the fact remains that no registration exists and a condition precedent laid down in the said proviso had not been satisfied. Therefore, in our view, the customs authorities had no way out and had necessarily to assess the gas cylinders under the only other item which was applicable to them, namely item 72(C). 12. Mr. Kakodkar further submitted that, in any event, the fact remains that the empty dissolved acetylene cylinders were clearly falling within the purview of item 72(A) of the Tariff and but for the non-registration of the contract, they would have been assessed under the said i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It may be pointed out that one of the possibilities is that, perhaps, they were satisfied that the endorsement would not be made. In the circumstances, therefore, the fact that remains is that the licence was not endorsed at all as project import and on the other hand, the contract for the import of the cylinders was not at all registered. This being the case, it is clear that on one hand, the gas cylinders could not be assessable under item 72(A) for want of registration of the contract and on the other, it is not established that the said items, even if falling under the purview of item 72(A), were to be exempted by virtue of the provisions of the notification 122 of 20th August, 1965. In the circumstance, therefore, in our view, it is not possible to hold that the customs authorities had erred by levying countervailing duty on the aforesaid empty dissolved acetylene cylinders. 13. In the result, this petition partly succeeds and consequently, the rule is made absolute only insofar as the duty on acetone and saturation gas was levied under item 28 of the Indian Customs Tariff. The respondents are, so such ordered to refund to the petitioners the excess import duty paid to them ..... X X X X Extracts X X X X X X X X Extracts X X X X
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