Strict construction of customs exemption and DGTD certificate effect: duty concession failed, but Open General Licence import was upheld.

A concessional customs duty claim failed because the imported machine was shown to be a general-purpose tool grinding machine and not one that strictly answered the notification description; the DGTD certificate was not conclusive where the notification did not make it a condition, so customs could independently assess eligibility. On licensing, the DGTD certificate expressly covered the machine under the relevant Import Policy entry, so the objection that it could not be imported under Open General Licence was unsustainable. As the import was treated as permissible under the policy, confiscation and redemption fine lacked foundation and were set aside.

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Issues: (i) Whether the imported machine was entitled to concessional rate of customs duty under Notification No. 40/78-Cus. dated 1-3-1978; (ii) Whether the machine could be imported under Open General Licence and, if not, whether confiscation and redemption fine were sustainable.

Issue (i): Whether the imported machine was entitled to concessional rate of customs duty under Notification No. 40/78-Cus. dated 1-3-1978.

Analysis: The machine was shown by the manufacturer's catalogue to be a general-purpose tool grinding machine capable of uses beyond hob-cutting or hob-grinding, including angular cutters, thread mills and taps. The benefit of the notification depended on the machine fitting the described entry itself, and the appellants had the burden to establish that it fully answered that description. The DGTD certificate was not treated as conclusive for the notification because the notification did not make the benefit dependent on such a certificate, and independent assessment by the customs authorities remained permissible.

Conclusion: The claim for concessional rate of customs duty was rejected and the order of assessment on the normal tariff basis was sustained.

Issue (ii): Whether the machine could be imported under Open General Licence and, if not, whether confiscation and redemption fine were sustainable.

Analysis: For licensing purposes, the DGTD certificate expressly covered the machine under Serial No. 24 of Appendix I, Part B of the Import Policy for AM 1984-85. In the face of that certificate, the view that the machine could not be imported under OGL was not sustainable. Once the import was treated as permissible under the policy, the foundation for confiscation and the redemption fine disappeared.

Conclusion: The confiscation of the machine and the redemption fine were set aside, and the import under OGL was upheld.

Final Conclusion: The appeal succeeded in part: the import was held permissible under the Import Policy and the confiscation consequences were annulled, but the claim to concessional customs duty failed.

Ratio Decidendi: A machine must strictly answer the description in a concessional customs notification before the benefit can be claimed, and a DGTD certificate is not conclusive for duty exemption where the notification itself does not make it a condition; however, where the import policy is framed in consultation with the DGTD and the certificate positively covers the goods, the licensing objection cannot be sustained.

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