2003 (9) TMI 623 - AT - Customs

Imported 'Tube Assembly' Goods Not Subject to Import Restrictions

The appellant's imported 'tube assembly' goods were in dispute due to import license requirements. The court found that the goods, intended for industrial ... Import licence requirement for consumer goods - classification as consumer goods versus industrial/packaging goods - application of Directorate of Foreign Trade circular clarifying importability - distinction between redemption fine and penalty for unlawful importClassification as consumer goods versus industrial/packaging goods - import licence requirement for consumer goods - application of Directorate of Foreign Trade circular clarifying importability - Whether the imported 'tube assembly'/packaging bottles were consumer goods requiring an import licence - HELD THAT: - The Tribunal examined the nature and intended use of the imported items and concluded they are packaging/industrial containers for sealant rather than consumer goods. Reliance on the licensing authority's circular alone was insufficient to classify the empty bottles as consumer goods where the containers have a nozzle fitted for applying an industrial sealant and do not fulfil ordinary human needs as consumer items. Precedent of the Tribunal holding parts of aerosol cans not to be consumer goods was noted by way of analogy. The consignments could not be treated as unauthorisedly imported on the sole ground that they were consumer goods covered by the circular. [Paras 3, 4]The goods are not consumer goods for the purpose of requiring an import licence and therefore could not be held unauthorisedly imported on that basis.Distinction between redemption fine and penalty for unlawful import - import licence requirement for consumer goods - Whether monetary consequences imposed on the appellant should be sustained or altered - HELD THAT: - The Tribunal accepted that late notice of the circular may be a mitigating factor but does not absolve liability for unlawful import. Accordingly, the redemption fine imposed in respect of the consignment was not reduced as the goods were intended for sale. However, having found that the goods were not consumer goods requiring a licence, the Tribunal considered the separate punitive penalty excessive in the circumstances and set aside the penalty quantified by the adjudicating authority. [Paras 2]The redemption fine is sustained; the penalty imposed on the appellant is set aside.Final Conclusion: Appeal C/50/98 allowed; Appeal C/49/98 allowed in part - consignments are not consumer goods necessitating import licences, redemption fine upheld and penalty set aside. Issues: Whether goods described as 'tube assembly' imported by the appellant would be cleared without a production of import license.Analysis:1. The goods subject to appeal C/50/98 and C/49/95 were imported from Saudi Arabia and arrived in Mumbai on specific dates. A circular from the Directorate of Foreign Trade dated 18-7-95 mentioned restrictions on importing packing bottles without an import license.2. The appellant argued that the goods were for packing industrial sealant, and the shipment in appeal 49/98 was after a clarification from the licensing authority, justifying coverage under the clarification. The delay in the circular's notice was not a defense for unlawful import.3. The penalty imposed on the appellant was discussed, with a distinction made between the two consignments. The consignment shipped before the clarification required a separate determination on permissibility for import, independent of the circular.4. The judgment highlighted that the packaging bottles with nozzles for sealant application were not consumer goods, drawing on precedents regarding similar items not classified as consumer goods. The bottles did not fulfill any human needs as empty containers with closures.5. The conclusion was that the consignments could not be deemed as unauthorized imports due to being classified as consumer goods. Appeal C/50/98 was allowed, while Appeal C/49/98 was partially allowed, with the penalty of Rs. 30,000 being set aside.