TaxTMI 
TaxTMI 
TaxTMI 
1991 (6) TMI 155
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....rected the appellant to pay up the balance of Rs. 34 lakhs. The present appeal is against the aforesaid order. 2. After hearing the elaborate arguments of Shri Habbu the learned advocate for the appellants and Shri Mondal for the Department, the following undisputed factual position is evident : (i) The consignment of 53 Homodialysing machines with spare parts exported to U.S.S.R. under different S/Bs all dated 2-12-1988, were imported against B/E. No. 6078 dated 14-10-1988 filed for clearance of the goods for home consumption; (ii) The goods were imported under OGL - Sr. No. 27 of list 2 of Appx. 6 of AM 88-91 and also allowed clearance free of duty for home consumption under Notification No. 208/81 dated 22-9-1981. Only certain consumables were charged to duty on import; (iii) On examination of the goods at the time of export, they were found to be in original packing. These goods on clearance for home consumption were claimed to have been taken to the appellant's factory at Ankeleswar for repacking and they were presented for re-export on 2-12-1988 by filing S/Bs at Kandla Customs House; (iv) The date of import as per B/E being 19-10-1988 the date of filing S/Bs for re-expo....
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.... it is not permissible to interpret the term 'sale' as only within the country and not extending to sale to a foreign buyer. (v) The Delhi High Court in the case Janak Photo Enterprises [1990 (49) E.L.T. 339] have held the view on a prima facie consideration that C.C.I. & E.'s clarification is not correct and there is no provision of law stating that the goods, which have been imported could be sold only within the country. The Sale of Goods Act does not give such a restricted meaning to the term 'sale' as sale within the country. Hence, the term 'sale' appearing in Notification No. 15/88 - where it is prescribed that the goods can be imported 'for stock and sale', cannot be restricted to sale within the country. (vi) It is not relevant to go into the question whether the goods, having been imported by spending hard currency, had been exported against rupee payment by U.S.S.R. The Government does not make any distinction between export to U.S.S.R. or to other countries. Even export to U.S.S.R. bring us back goods in return like crude oil, armaments etc. Hence, such a view taken sniffing at the export to U.S.S.R. in terms of rupee payment, is not a sound one; (vii) By importing t....
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....ith some condition, it can be done with the permission of C.C.I. & E. In fact in this case, the appellants were agreeable for such a reference to C.C.I. & E. and cleared the goods for export on furnishing a bond. Having agreed to this position, it is not now open for them to condemn the clarification from C.C.I. & E. and try to wriggle out of the bond by saying that C.C.I. & E.'s clarification is not legal and is not binding on them. He referred to the judgment of the Delhi High Court in Jain Exports' case [1987 (29) E.L.T. 753 - paras 28 & 29]; (iii) The citation made by Shri Habbu - namely Janak Photo Enterprises -1990 (49) E.L.T. 339 is not a case law. That High Court have clearly indicated that it is their prima facie view. They are yet to go into all the aspects of I.T.C. Order as also E.T.C. order and the clarification issued by C.C.I. & E. was not accepted only, on a prima facie consideration of the arguments on hearing stay petition. The Hon'ble High Court is yet to take a final decision. Hence this is not a case law, which can bind the Tribunal to follow the same. Now the Bench is deciding on the appeal and hence all aspects of the issue including the points of law canvas....
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....luded in the schedule to Export Control Order are under control. Since this item is not covered in the schedule, it is freely exportable; (iii) There is no provision of law cited that goods imported into the country can only be sold in the country itself and C.C.I. & E. does not appear to have clarified the position correctly; (iv) There is no dearth of photographic films in the country requiring to be conserved and export of the goods to Singapore would result in earning of foreign exchange for the country. 6. Though in the present appeal before us, somewhat similar arguments are advanced, there are some subtle differences noticed. In that case, the good were bonded on import and it appears that the saving clause 11(d) of I.T.C. order was not amended to confine the re-export of bonded goods only to export as shipstores (This appears to be the position because if it is otherwise, this would have been brought to the notice of the Hon'ble High Court by either side). In the present case before us, amended saving clause 11(d) restricting re-export of bonded goods only for re-export as ship stores has come into play, but these goods have been cleared on a declaration on B/E as for ho....
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....onded goods cleared for export without payment of duty, bar is applicable for re-export except as ships stores. If the proposition that clause 11(d) cannot be invoked in this case is accepted, because the goods have been cleared for home consumption, then in every import of goods bonded initially without payment of duty, clause 11(d) can be easily circumvented by first clearing the goods for home consumption and then file S I Bs for their export. Hence, when goods imported are cleared under declaration for home consumption for stock and sale, can such a sale be construed as meaning sale anywhere in the world? Declaration on the B/E has a considerable significance and only on the basis of such declaration and statements made on the B/E, concessions and relaxations are given. If a person having filed a B/E for home consumption and claimed OGL benefit for stock and sate, can the authorities at the time of import, imagine that the goods are cleared by the appellant for re-export? The answer can only be in the negative. Hence in the context of their clearance for home consumption straightaway without bonding, no one can even visualise that the importers have brought the goods only for r....
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....rmits imports for stock and sale including sale abroad and sub-clause (4B) was inserted only subsequently, we are now to consider whether even without such an insertion, goods imported under OGL for stock and sale can be re-exported without permission from C.C.I. & E., as per the I.T.C. order, prior to insertion of sub-clause (4B) to clause 5 of I.T.C. order. That is what we propose to do now. On going through the I.T.C. order as prevalent during the period of import and export of the impugned goods. (reproduced as Appx. 1-B of the Handbook of Procedures AM 88-91), we observe a particular clause - namely clause 10C of I.T.C. order, which is reproduced below: "10C. Power to make directions for the sale of imported goods in certain cases - (1) Where, on the importation of any goods or at any time thereafter, the Chief Controller of Imports and Exports or an authorised officer is satisfied after giving a reasonable opportunity to the licensee of being heard in the matter, that such goods cannot or should not be utilised for the purpose for which they were imported he may by order direct the importer of the goods in case the goods were imported under Open General Licence or Special Ge....
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....pplicable only to any particular class of goods, to which cl. 10C can be applied. The wording of clause 10C does not suggest that this power is applicable only to certain goods. It applies to all imported goods covered by O.G.L. or Special General Licence. With this enabling power in the hands of the C.C.I. & E., can we view that C.C.I. & E's clarification is wholly redundant or illegal. This power is conferred by a statutory order. With this power available in the hands of C.C.I. & E., when a reference is made to them that goods cleared for home consumption for stock and sale (in the home state obviously home consumption goes with consumption or utilisation in the home state) are sought for export, it falls within his discretion to allow the goods for sale even to a foreign buyer subject to such condition as laid down in clause 10C. If, in the interest of maintaining cordial relationship with an earthquake affected country, export is to be allowed, he would have allowed it at the price as fixed by him in accordance with the provisions of clause 10C. If by exporting to Russia, we can meet the immediate requirement for our country, he would have passed an order of sale to a buyer in....
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....ey are to be diverted for export, they should have taken the precaution of getting the order from C.C.I. & E., for which legal provisions exist already. Since they have not chosen to do it, they were required to clear the goods on a bond agreeing to abide by the clarification from C.C.I. & E. In the circumstances, the binding nature of the clarification also can not be underestimated. If the goods have been exported purely out of humanitarian ground on a no profit-no loss basis, it is quite likely that C.C.I. & E. would have approved of such an export. When it is clearly discernable that export is only for the appellants' own profit, it is only expected of C.C.I. & E., who is vested with powers under cl. 11(C) of I.T.C. order, to refuse to give permission for diversion for exports, on profit motive, in a case, when the goods were cleared under O.G.L. for home consumption into India. Viewed from this angle also, the appeal is liable to be dismissed. 10. Though no alternative plea for reduction in penalty was made, we looked into the question on our own. It is an undisputed position that the appellants have earned a margin of profit to the extent of Rs. 94.00 lakhs in the export dea....
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....cted meaning, the "sale" included "sale to a foreign country" and to substantiate his said plea, placed reliance on the decision of the Delhi High Court in Janak Photo Enterprises (P) Ltd. v. Union of India -1990 (49) E.L.T. 339 (Del.) He also pleaded that grant of exemption from duty vide Notn. No. 208/81, with no reservations or restrictions imposed, did not anyway come in the way of the appellants exporting the said goods. 14. Brother Jayaraman, Member (Tech.), has examined the issue from various angles and has negatived the contentions raised by the ld. Counsel for the appellants, and it is not necessary to re-exercise on the same grounds, to which I concur. 15. I would however like to add that even the prima facie views expressed by the Delhi High Court in Re : Janak Photo Enterprises (supra) are however in relation to the provisions of O.G.L. simpliciter, i.e. where the items imported though under O.G.L., are cleared on payment of requisite duty. Here, however, the facts are slightly different, inasmuch as, the items imported not only fall within the O.G.L. entry, but are further granted exemption from duty and are imported by availment of such exemption benefit, and it is ....