1984 (7) TMI 382 - AT - Customs

Tribunal rules against appellants in pump import case, finding redemption fine justified

WESTERN INDIA GARMENTS LTD. Versus COLLECTOR OF CUSTOMS, BOMBAY

WESTERN INDIA GARMENTS LTD. Versus COLLECTOR OF CUSTOMS, BOMBAY - 1984 (18) E.L.T. 588 (Tribunal) Issues Involved:1. Validity of additional licenses for the import of power-driven pumps.2. Misunderstanding of submissions by M/s. Kiran Products.3. Alleged discrimination in the clearance of previous identical goods.4. Classification of imported goods as components.5. Excessiveness of the redemption fine.Detailed Analysis:1. Validity of Additional Licenses for the Import of Power-Driven Pumps:The appellants, M/s. Western India Garments Ltd., held two additional licenses permitting the import of items listed in Appendices 5 and 7, excluding items in Appendix 26 of the Policies AM 82-83 and AM 83-84. They imported 75 pieces of power-driven pumps in semi-knocked down condition and sold the consignment on a High Seas sale basis to M/s. Kiran Products. The Customs objected, stating the imported goods were complete equipment, not raw materials, components, consumables, tools, or spares, and thus not covered by the licenses. The Collector concluded that the goods were capital goods, not components or spares, requiring a specific import license, and held that M/s. Kiran Products were not actual users, thus violating the license condition, making the import unauthorized and liable for confiscation.2. Misunderstanding of Submissions by M/s. Kiran Products:M/s. Kiran Products argued that the imported goods were covered by specific items in Appendix 5 of the Policies AM 82-83 and AM 83-84 and that they were engaged in assembling, manufacturing, and testing the pumps. However, the Collector misunderstood their submissions, believing that the goods were complete equipment rather than components. The Collector's decision was based on the finding that the imported goods were capital goods, not components or spares.3. Alleged Discrimination in the Clearance of Previous Identical Goods:The appellants contended that in previous instances, identical goods were cleared against identical licenses, and the current objection amounted to discrimination. However, the Customs representative, Shri Jain, argued that no sufficient documentation was provided to support this claim. The Tribunal held that even if an illegal import had been permitted earlier, it could not justify the clearance of subsequent illegal imports, and there was no estoppel against the Customs.4. Classification of Imported Goods as Components:The appellants argued that the imported power-driven pumps were components. However, the Tribunal questioned the manufactured product of which the imported goods were components and whether M/s. Kiran Products were manufacturers of such a product. The definition of 'component' in the Policy AM 82-83 was examined, and the Tribunal concluded that the imported goods did not qualify as components. Furthermore, M/s. Kiran Products were not actual users as per the policy definition, and their registration certificate did not include manufacturing or assembling of power-driven pumps at the relevant time.5. Excessiveness of the Redemption Fine:The appellants argued that the redemption fine of Rs. 4,00,000/- imposed by the Collector was excessive. However, the Customs representative submitted that the fine was based on the margin of profit, which was 100% at the relevant time. The Tribunal found no evidence that the discretion in imposing the fine was exercised improperly, arbitrarily, or capriciously and saw no reason to interfere with the fine.Conclusion:The Tribunal concluded that the appeal lacked merit and upheld the order of the Collector of Customs, Air Cargo, rejecting the appeal. The imported goods were not covered by the additional licenses, M/s. Kiran Products were not actual users, and the fine imposed was justified.