1987 (8) TMI 247 - AT - Central Excise

Import License Valid for Vehicle Parts; Confiscation Overturned

The majority opinion in the case found that the import license held by the appellants was valid for importing motor vehicle spare parts, thus deeming the ... Spares for motor vehicles Issues Involved:1. Validity of the import license for the goods imported.2. Interpretation of the relevant import policy provisions.3. Applicability of past customs practices and related precedents.4. Appropriateness of the confiscation order and the imposed fines.Detailed Analysis:1. Validity of the Import License for the Goods Imported:The appellants imported three consignments of automobile spares and glasses and sought clearance against an additional import license. The Customs Department objected, claiming the license was not valid for the imported goods. The Deputy Collector of Customs ordered confiscation but allowed redemption on payment of fines. The Appellate Collector confirmed this order. The appellants argued that their license, endorsed under para 176(1) and (2) of the A.M. 1981 Policy, was valid for importing raw materials, components, and spares placed on Open General Licence (OGL) for Actual Users. The Department contended that the spare parts of motor vehicles could only be imported by persons owning imported vehicles and within a value limit of Rs. 5,000/- per year.2. Interpretation of the Relevant Import Policy Provisions:Para 176(1)(b) of the A.M. 1981 Policy allowed Export Houses to import raw materials, components, and spares (excluding those in Appendix 5) placed on OGL for Actual Users. The appellants argued that the term 'Actual Users' was unqualified in the policy, thus including both industrial and non-industrial users. They contended that item 25 of Appendix 10, covering spare parts of motor vehicles, should be permissible under their license. The Department argued that item 25 was specific to owners of imported vehicles/agricultural tractors and had a value restriction. The Tribunal noted that more than one category of importers could import the same items, and the policy allowed Export Houses to import permissible spares under OGL.3. Applicability of Past Customs Practices and Related Precedents:The appellants cited past practices where similar goods were cleared against similar licenses without public notice altering these practices. They relied on previous decisions and minutes from the 15th Meeting of the Customs and Central Excise Advisory Council. The Department countered that erroneous past releases could not confer a right to claim benefits. The Tribunal found that the past releases were based on a correct interpretation of the policy, supporting the appellants' argument.4. Appropriateness of the Confiscation Order and the Imposed Fines:The Tribunal examined whether the order of confiscation and the fines imposed were legally justified. The majority opinion concluded that the import policy allowed Export Houses to import permissible spares, including motor vehicle parts, under their additional license. Consequently, the confiscation order was deemed erroneous in law. However, a dissenting opinion held that the import of motor vehicle parts was not permissible under the license and supported the confiscation order and fines.Separate Judgments:- Majority Opinion (Member Judicial and Third Member): The order of confiscation was erroneous in law. The appeal was allowed, and the appellants were granted consequential relief.- Dissenting Opinion (Member Technical): The import of motor vehicle parts was unauthorized under the license. The orders of the Deputy Collector and the Appellate Collector were correct and confirmed.Final Order:In the majority view, the orders passed by the Deputy Collector of Customs and the Appellate Collector of Customs were found to be correct in law and were accordingly confirmed. The appeal of M/s. R.K. Motors (India), Bombay, was ordered to be rejected.