1993 (1) TMI 83 - HC - Customs

Imported Almonds Not Considered 'Seeds' for REP Licenses

The High Court upheld the decision of the Additional Collector and the Single Judge, determining that imported almonds did not qualify as 'seeds' under ... Import Policy for Registered Exporters, 1985-88 Issues:1. Interpretation of import policy for registered exporters under Appendix 17.2. Determining whether imported goods fall within the expression 'seeds' under REP licences.3. Validity of redemption fine and penalty imposed by the Additional Collector.Analysis:1. The case involved the appellants importing almonds declared as 'seeds of almonds' under various REP licences. Customs authorities issued a show cause notice for potential confiscation under Section 111 of the Customs Act, citing reasons related to the nature of the imported goods and their nexus to export products. The Additional Collector held the import invalid, leading to a penalty and redemption fine. The Single Judge upheld this decision, referring to provisions of the Customs Tariff Act. The appellants challenged this decision, arguing that the imported goods qualified as seeds under the licences.2. The High Court analyzed the import policy outlined in Appendix 17, emphasizing the requirement for imported items to have a direct nexus with the exported goods. The policy aimed to permit only those items used in the manufacture of export products. The Court noted specific conditions for REP licences, including the submission of a list of raw materials actually used in manufacturing exported products. The Court highlighted that the term 'seeds' in the policy referred to seeds of fresh fruits, vegetables, and flowers intended for germination or plantation, not merely as a generic term.3. The Court rejected the appellants' argument that the generic term 'seeds' encompassed all types of seeds, including almonds, regardless of their use. It emphasized that the limitations on seed imports were intrinsic to the policy and must align with the export products specified in the licences. Referring to a previous Division Bench decision, the Court distinguished cases where generic terms like Ethyl Alcohol were permitted without restrictions, unlike the specific restrictions on seed imports under the policy. Consequently, the Court upheld the decisions of the Additional Collector and the Single Judge regarding the invalidity of the import.4. Regarding the redemption fine and penalty, the Court considered the appellants' request for modification due to the heavy imposition. After hearing arguments from both parties, the Court exercised discretion to reduce the redemption fine and penalty to 50% of the original amounts levied by the Additional Collector. The Court noted that the appellants had already paid 50% of the fines, which was deemed sufficient in the circumstances. The appeal was partly allowed, upholding previous decisions but reducing the financial penalties imposed.