1999 (1) TMI 139 - AT - Customs

Imported Goods Classification Upheld; Customs Penalties Overturned

The Tribunal determined that the imported goods were metallised polyester films, not requiring an import license under the Open General License. The ... Import - OGL Issues Involved:1. Classification of imported goods.2. Requirement of an import license.3. Confiscation and imposition of penalty.4. Applicability of Open General License (OGL).5. Finalization of Bill of Entry.Detailed Analysis:1. Classification of Imported Goods:The primary issue was whether the imported consignment of 325 cartons of Polyester Film coated with Ferric Oxide should be classified as 'Audio Magnetic tapes in Jumbo rolls' or 'Metallised Polyester Film.' The Customs authorities initially classified the goods as Audio Magnetic tapes under Sl. No. 607(4), Appendix 3, Part A, requiring a specific import license. However, the importers claimed the goods fell under Sl. No. 565(48) of Appendix 6, List 8, Part I, which did not require a license and were eligible for clearance under OGL.The Tribunal, in a prior period case involving the same importers, had classified similar goods as 'Metallised Polyester Film' under Heading 39.01/06 of the Customs Tariff, eligible for OGL and not as Audio Magnetic tapes. The Supreme Court, in its order dated 12-2-1997, remanded the case to the Tribunal, emphasizing the need to determine whether the goods were 'audio magnetic tape in jumbo rolls' or 'metallised polyester film' requiring further processing to become audio magnetic tape.2. Requirement of an Import License:The Customs authorities argued that the goods required an import license as they were classified as Audio Magnetic tapes, which appeared under restricted items. The importers contended that the goods were metallised polyester films, which did not require a license under OGL. The Tribunal, following the Supreme Court's directive, concluded that the goods were indeed metallised polyester films and thus did not require an import license.3. Confiscation and Imposition of Penalty:The Collector of Customs had confiscated the goods under Section 111(d) and (m) for contravention of Section 3(2) of the Import and Export (Control) Act, 1947, read with Section 11 of the Customs Act, 1962, and imposed a fine of Rs. 2 lakhs in lieu of confiscation and a penalty of Rs. 50,000/- under Section 112 of the Customs Act, 1962. However, the Tribunal, upon re-evaluation, set aside the confiscation and penalty, aligning with the Supreme Court's observation that the goods were metallised polyester films.4. Applicability of Open General License (OGL):The importers sought clearance under OGL, arguing that the goods fell under Sl. No. 565(48) of Appendix 6, List 8, Part I, which did not require a license. The Tribunal upheld this claim, referencing its earlier decision and the Supreme Court's directive, confirming that the goods were appropriately classified under OGL and did not necessitate a specific import license.5. Finalization of Bill of Entry:The Bill of Entry for the imported goods had not been finalized. The Tribunal noted that its mandate was confined to deciding the ITC classification of the goods, as per the Supreme Court's order, and did not extend to the classification for customs purposes. The Tribunal directed that the finalization of the Bill of Entry should be done by the Customs authorities in light of the finding that the goods were 'polyester films metallised' and not Audio Magnetic tapes in jumbo rolls.Conclusion:The Tribunal concluded that the imported goods were metallised polyester films, falling under Sl. No. 565(48) of Appendix 6, List 8, Part I, of the Import Policy for April 1985 - March 1988, and thus did not require an import license. The confiscation and penalty imposed by the Collector of Customs were set aside. The Tribunal's decision was guided by the Supreme Court's directive and its prior ruling in a similar case involving the same importers. The finalization of the Bill of Entry was left to the Customs authorities, with the Tribunal's findings serving as the basis for classification.