OGL clearance for filter cloth import sustained where prevailing practice continued before non-public departmental clarification.

Filter cloth imported for fitment in a belt filter was treated as fabric for countervailing duty purposes and, because Appendix 2B, Serial No. 44 covered man-made fabrics subject only to a limited exclusion, mere cutting to size for fitment did not take it outside the entry. The commentary also notes that OGL clearance could be supported where an established departmental practice existed and the clarificatory view was not publicly notified before the letter of credit was opened, so imports made on the then-prevailing practice were entitled to relief.

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Issues: (i) Whether filter cloth imported for fitment in a belt filter escaped Appendix 2B, Serial No. 44 on the ground that it was a component part of machinery. (ii) Whether the appellants were entitled to clearance under OGL in view of the existing practice and the fact that the departmental clarification was not publicly notified before the letter of credit was opened.

Issue (i): Whether filter cloth imported for fitment in a belt filter escaped Appendix 2B, Serial No. 44 on the ground that it was a component part of machinery.

Analysis: The item was treated as fabric for purposes of countervailing duty and had been classified under the Central Excise Tariff as fabric. The entry in Appendix 2B, Serial No. 44 covered all fabrics made from man-made fibres or yarn, save for the limited exclusion stated in the entry. Merely cutting the fabric to size and shape for ready fitment did not take it outside the scope of that entry.

Conclusion: The claim that the goods were outside Appendix 2B, Serial No. 44 was rejected and this issue was decided against the appellants.

Issue (ii): Whether the appellants were entitled to clearance under OGL in view of the existing practice and the fact that the departmental clarification was not publicly notified before the letter of credit was opened.

Analysis: The record showed an established practice of allowing such filter cloth under OGL. The clarification relied upon by the department was obtained later and had not been made public by trade notice or circular. The letter of credit had been opened before that clarification, so the import was undertaken on the footing of the then-prevailing practice.

Conclusion: The appellants were entitled to relief on this ground and this issue was decided in their favour.

Final Conclusion: Although the goods were held to fall within Appendix 2B, Serial No. 44, the appeal succeeded because the import had been made before the non-public clarification and on the basis of the prevailing OGL practice.

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