TMI Blog1985 (10) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... y considering all the facts and circumstances of the case, while agreeing that the facts of the matter relating to the aforecited Appeal No. 31 of 1982. involved a similar issue, found them selves unable to agree with the ratio of this earlier decision, and referred the matters to the President, CEGAT, for constitution of a larger Bench to decide the issue involved. The present matters are, therefore, re-heard by us as a Larger Bench constituted under a special order of the President. 3.The issue is whether in a case where an actual user imports certain goods as raw materials and gets a product manufactured out of the said material on a job-work basis, by an outside agency, and uses the said manufactured product in his own premises in the further manufacture of the final finished product, he would be eligible to the benefit of OGL as per Serial No. 1 of Appendix 10 of the A.M.-82 Import Policy in respect of the raw material imported into the country. 4.While considering this matter, we have the benefit of the very detailed examination undertaken by the West Regional Bench and the views expressed by them, in their order of 1st October, 1983, a copy of which is appended to this j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use with reference to Note 2 to Chapter 26 of the Customs Tariff Act, 1975. As per this Note, it is provided that metallic ores means minerals of mineralogical species actually used in the metallurgical industry. He pointed out that the Heading did not include minerals which had been submitted to processes not normal to the metallurgical industry. 8.Insofar as the citation by the appellants of the decision in the case of Godrej Ltd., Vikhroli, Bombay v. Collector of Customs, Bombay (supra) is concerned, the department has pointed out that in that case the pertinent factor, which went in favour of the appellants, was that there was a recommendation supporting them from the Chief Controller of Imports and Exports. It was held by the west Regional Bench that recommendations of the CCIE are normally acceptable to the Customs authorities. The department feels that, but for this fact, the view of the West Regional Bench, Bombay, would have been the same as in the case of Kashyap Zip Industries Pvt. Ltd., Bombay v. Collector a Customs, Bombay (supra). 9.Decisions in the following cases have also been cited by the Department in support of their case :- Calcutta High Court decision i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terminable, with no such thing as final settlement of interpretations on policy, resulting in avoidable harassment to the trade, creation of infructuous work at all levels and thwarting Government's avowed objectives to give a fillip to the industry and the export effort. 14.The definition of the "actual user" in A.M.-82 Import Policy is that the goods should be required for importer's own use and not for business or trade in it. It is not the department's case that the goods have been used for business or trade. 15.Further, in the definition of "actual user", it has been clarified that in the case of an industrial undertaking, the item concerned shall be utilised for the manufacturing process or operations conducted within its authorised premises or made available to jobbing units or other units outside for intermediate processing only as part of such production effort. There is nothing at all in this definition to admit the argument, as put forward by the learned departmental representative, that intermediate processing would only be limited to processes such as dyeing etc. of fabrics/yarn in which the raw material does not undergo any physical conversion or transformation. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd claimed clearances of the consignment under item No. 1 of appendix 10 of the April 1981-March 1982 Import Control Policy. The appellants in both cases held small scale registration certificate for the manufacture of Industrial fabrics and Hosiery garments. The appellants got the fibre converted into yarn on job basis for ultimate use in the manufacture of hosiery goods. The conversion of the fibre into yarn on job basis was done at J.C. Mills Ltd., Gwalior. The Collector of Customs held that the appellants were not entitled to import viscose staple fibre as raw material for the manufacture of knitted fabrics (hosiery goods) inasmuch as the staple fibre was really the raw material for the manufacture of yarn and it was the yarn so manufactured that was the raw material for the manufacture of hosiery goods. On this basis, the imports were held as unauthorised and the goods were confiscated under Section 111(d) of the Customs Act, 1962 read with Section 3 of the Imports and Exports (Control) Act, 1947. The appellants were, however, allowed to redeem the goods by payment of a fine of Rs. 3,000/-each under Section 125 of the Customs Act. Aggrieved with the Collector's orders, the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner to the effect that the contracts for import of ^viscose staple fibre was registered by the said office in accordance with para 5 of appendix 10 of the Import Policy 81-82 only after the appellants furnishing "actual user declarations as the conversion of the fibre into yarn is done on job work basis which is an intermediate process". The learned Counsel also took us through Appendix 10 with particular reference to conditions 1, 5, 13 and 18. The appellants had complied with conditions Nos. 5, 13 and 18 which were applicable to them. It was also strenuously urged that conversion of the fibre into yarn should not be held to be an independent manufacturing process but only as an intermediatory process in the manufacture of hosiery goods from viscose staple fibre. 4.Appearing on behalf of the respondent, Shri Krishan Kumar the learned departmental representative, submitted that the Textile Commissioner was required in terms of the Policy only to register the contracts but not to say whether the goods could be considered as raw material for the appellants' purpose. The same position held good with reference to the Directorate of Industries, M.P. He strenuously supported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the extent that the appellants did not have the facility for conversion of fibre into yarn, which job they had got done by an outside unit, viz., J.C. Mills, Gwalior. Could this factor by itself make any significant difference to the interpretation of the expressions concerned ? In our opinion, the answer is 'No'. The certificates issued by the General Manager, District Industries Centre and the Textile Commissioner cannot be totally ignored and have to be given due weight, for they are the sponsoring and contract-registering authorities. The Textile Commissioner, in particular, who was required to register the contracts registered them only after the appellants had furnished actual user declarations of the conversion of fibre into yarn on job work basis. Having regard to all these considerations, we are of the definite view that the imports are covered by serial No. 1 of appendix 10 and that the confiscation of the goods and imposition of fine in lieu of confiscation by the Collector were not justified. 6.However, as the departmental representative has pointed out, the Bombay Bench of the Tribunal had occasion to consider the import of the expressions "Actual user", "Intermediat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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