1988 (1) TMI 198 - AT - Customs

Appellate Tribunal rules in favor of appellants on Potassium Cyanide import license interpretation

CHIRAG INTERNATIONAL Versus COLLECTOR OF CUSTOMS & C. EX.

The Appellate Tribunal CEGAT, Bombay ruled in favor of the appellants in a case concerning the interpretation of import licences for Potassium Cyanide ... Import - Potassium Cyanide Issues:- Interpretation of import licences for Potassium Cyanide under the Registered Exporters Policy- Validity of the generic entry 'electroplating salts and brighteners' for Potassium Cyanide- Application of paragraph 21 (c) of the Import Policy regarding specific items in Appendix 3- Confiscation of goods, fine, and penalty imposed by the Collector of Customs- Technical literature and expert opinions on the use of Potassium Cyanide in electroplatingAnalysis:The appeal before the Appellate Tribunal CEGAT, Bombay involved the interpretation of import licences for Potassium Cyanide under the Registered Exporters Policy. The Collector of Customs held that the generic entry 'electroplating salts and brighteners' did not cover Potassium Cyanide, leading to the confiscation of goods and imposition of a fine and penalty on the appellants. The Tribunal considered technical literature and expert opinions presented by the appellants, which showed that Potassium Cyanide is used in electroplating, as well as for other purposes like extraction of gold and silver. The Tribunal noted that the Bombay Custom House Public Notice acknowledged the use of Potassium Cyanide in electroplating, albeit in scant quantities. Despite the technical literature not discussing the extent of its use in electroplating, the Tribunal found that the generic entry covered Potassium Cyanide, as the licensing authority had not disallowed its import explicitly.Regarding the application of paragraph 21 (c) of the Import Policy, the Tribunal analyzed the provision which stated that specific descriptions in Appendices 2 and 3 would prevail over generic descriptions. The Tribunal emphasized that only Appendix 2 was given overriding force over the Registered Exporters Policy, not Appendix 3 where Potassium Cyanide was listed. Referring to a Division Bench Judgment of the Andhra Pradesh High Court, the Tribunal concluded that Appendix 17, containing conditions for Registered Exporters, was not subject to Appendix 3 restrictions. Therefore, the restrictions of paragraph 21 (c) in conjunction with the specific entry in Appendix 3 did not prevent the importation of Potassium Cyanide against the REP licences issued under Appendix 17.In the final decision, the Tribunal found the Collector's objections unsustainable and set aside the impugned order. While acknowledging the validity of the importation of Potassium Cyanide based on the Policy, the Tribunal highlighted the need to inform the Chief Controller of Imports and Exports about the importation for appropriate action. The appeal was allowed with consequential relief to the appellants, and a copy of the order was directed to be sent to the Chief Controller of Imports and Exports, Udyog Bhavan, New Delhi.