Appeal allowed, goods confiscated and penalty set aside. Notification 159/90 benefit denied, duty payment required.

The appeal was allowed to the extent that the confiscation of the goods and the penalty imposed on the appellant were set aside. However, the Collector's order that the benefit of Notification 159/90 would not be available and that the goods must be cleared on payment of proper duty was confirmed.

---

---

Issues Involved:
1. Validity of the import license for the goods in question.
2. Applicability of Notification 159/90 for duty exemption.
3. Compliance with the Import (Control) Order, 1955.
4. Relevance of the DEEC Book and Notification 116/88.
5. Application of Section 15 of the Customs Act for the rate of duty.

Issue-Wise Detailed Analysis:

1. Validity of the Import License for the Goods in Question:
The appellant argued that the import license issued in August 1989, which was amended to permit the import of Polyester Filament Yarn from 40D to 350D, covered the imported 50D yarn. The Additional Collector's rejection was based on the requirement that the imported goods must have identical specifications and technical characteristics as those used in the manufacture of the exported product. The judgment clarified that the import license and duty exemption are distinct; the import license permits importation of goods, while the Customs notification provides duty exemption. Therefore, even if the goods were not entitled to duty exemption, it did not invalidate the import license.

2. Applicability of Notification 159/90 for Duty Exemption:
The imported goods needed to meet the specifications and technical characteristics identical to those used in the exported product to qualify for duty exemption under Notification 159/90. The judgment noted that the earlier Notification 116/88 allowed for replenishment of materials with identical specifications, but Notification 159/90 required stricter compliance. The DEEC Book's reference to Notification 116/88 did not incorporate it into the license, and since Notification 116/88 was rescinded, its benefits were not applicable.

3. Compliance with the Import (Control) Order, 1955:
The appellant contended that the conditions under Clause 5 of the Import (Control) Order, 1955, did not bar the import. The judgment agreed, stating that none of the conditions imposed by Clause 5 were contravened by the import in question. The licensing authority was aware of the quality and technical characteristics of the yarn used in the exported fabrics, and the amendments to the import license supported the legality of the import.

4. Relevance of the DEEC Book and Notification 116/88:
The DEEC Book is not an authority for granting exemption from Customs duty but serves as a record of import and export materials. The reference to Notification 116/88 in the DEEC Book did not incorporate it into the license. The judgment emphasized that legislation by incorporation applies when provisions of one statute are incorporated into another, which was not the case here. Therefore, the rescinded Notification 116/88 could not provide a legal right to claim duty exemption.

5. Application of Section 15 of the Customs Act for the Rate of Duty:
Section 15 of the Customs Act determines the rate of duty based on the date of filing the bill of entry or the entry inwards of the vessel. Since Notification 116/88 was rescinded and replaced by Notification 159/90 by the relevant date, the latter notification's duty rate applied. The judgment rejected the appellant's contention that the reference to Notification 116/88 in the DEEC Book should determine the duty rate, as it would render Section 15 redundant.

Conclusion:
The appeal was allowed to the extent that the confiscation of the goods and the penalty imposed on the appellant were set aside. However, the Collector's order that the benefit of Notification 159/90 would not be available and that the goods must be cleared on payment of proper duty was confirmed.

---