TaxTMI 
TaxTMI 
1995 (6) TMI 110
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....confiscated the same and permitted redemption of the goods on payment of fine of Rs. 2 lakhs. On appeal the learned Collector (Appeals) set aside the order of the original authority and allowed the appeal holding that identical goods imported by the respondent were cleared by the Air Cargo unit and the goods are not specifically listed in the negative list in the Policy AM 1992-97 and the clarification given in ITC Public Notice No. 32, dated 17-7-1992 would be applicable. It was urged that the findings in the impugned order are not sustainable in law. The learned SDR contended that the goods are consumer items and consumer goods even though do not specifically find a place in the negative list, they were never permitted for import under any Policy and as such they would not be permissible for clearance without a valid licence. The goods being consumer goods would be covered by Negative List Sl. No. 156(A) of Policy AM 1992-97. The goods were also imported for trade purposes. 2. Shri Kumaraswamy, the learned Consultant for the Respondent submitted that the Respondent is a small scale unit registered with the Director of Industries and Commerce, engaged in the manufacture of....
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....arts and spares of Consumer Durables : Attention is invited to Ministry of Commerce Notification No. 22(N-3), dated 30-6-1992 amending, inter alia, the definition of "Consumer goods" to include "accessories, components, parts and spares of consumer durables". 2. "Consumer goods" appear in Part II (Restricted items) of the Negative List of Imports. Consequent to amendment in the definition of consumer goods as mentioned above, accessories, components, parts and spares of consumer durables fall in the Negative List of Imports. 3. In terms of the provision contained in Paragraph 156 of the Export and Import Policy, 1992-97, consumer goods are not permitted to be imported except against a licence or in accordance with a Public Notice issued in this behalf. 4. It is hereby notified that accessories, components, parts and spares of consumer durables, except those which are specifically included in the Negative list of Imports, may be imported by a manufacturer of the consumer durables without a licence. Such imports shall be subject to the Actual User condition and no transfer of the imported goods shall be made without the permission of the Chief Controller of Impo....
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.... letter No. VIII/48/1/93 BACC/6229, dated 30-9-1993. This Custom House has not come across any import of the subject goods in the recent past. As such no values are available. The subject goods was covered under Sl. No. 564 of App. 3A of the erstwhile Import-Export Policy. After the advent of the new liberalised Import-Export Policy, the CCI & E had given a clarification vide letter No. 48(20)/92-97/IPL, dated 15-5-1992 (copy enclosed) stating that "items not included in the negative list of imports may be permitted freely without a licence" However, in June '92, accessories, components, parts and spares of consumer durables were brought under licening category vide ITC P.N. 22/92, dated 30-6-92 (copy enclosed). In July '92, the licensing authorities issued P. No. 32/92, dated 17-7-1992 (copy enclosed) permitting `Actual User' alone for import of accessories, components, parts and spares of consumer durables under OGL. So, as per the existing licensing provisions, the subject goods can be permitted under OGL only when imported by an Actual User." We also note that 10,000 units of the same goods imported by the Respondent were permitted clearance by the Air Cargo Customs....
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....ing : The respondents before the learned lower authority waived the right of the issue of show cause notice and were represented before the lower authority by their Finance Director and also the Managing Director. The only plea taken before the original authority was that they are the actual users and had imported the goods for further processing in their factory and there were no mala fide involved in the importation and due to oversight in not understanding the import policy they had effected the import. There were no specific pleas made by them as to the usage of the batteries imported and also they did not plead on as to under which provision in the Import Policy the import could be allowed. At the appeal stage, however, they took fresh pleas and in their appeal before the Collector (Appeals) which is impugned before us for the first time the following pleas were taken : (i) The Nickel cadmium rechargeable batteries are not covered by the Negative List of Import Policy and that they cannot be equated with ordinary dry cell batteries which are primary cells, wherein the impugned goods are secondary cells. (ii) The goods could not be considered as consumer good....
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....umer goods, how the goods in question by virtue of ITC Public Notice 32/92-97 as referred to in the impugned order could be salvaged out of the banned category of the goods as set out in para 156-A of the Policy AM 1992-97. The learned lower authority's order for this reason alone cannot be considered as a proper order and therefore requires to be set aside on this short point. I observe that the fresh pleas taken and the facts urged before the learned lower authority have also been urged before us and in the order recorded by my learned Brother he has dealt with the same. I would like to record certain facts before proceeding to consider the issue on merits regarding their eligibility to import. The plea taken before the learned lower authority was that the goods were meant for emergency lights and during the hearing before us it was clarified by Shri S.K. Natarajan, Chairman of the company who was present, that the battery cells imported were intended for use in the torch lights, and not in emergency lights, in place of the normal dry cells. It was also clarified by him that the cells imported were being formed into power packs for sale as such for use in the torch lights. The ab....
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....aircraft systems, emergency no-fail and standby power sources, and hybrid applications. in Table 11-19. Major Characteristics and Applications of Secondary TABLE 11-19. Batteries. System Characteristics Application .............. ............. Nikel-cadmium : Vented Good high-rate, low-temperature capability; flat voltage, excellent cycle life. Aircraft batteries, industrial and emergency - power applications, communication equipment Sealed Good high-rate, low-temperature performance, excellent cycle life, maintenance free. Photography, portable tools, appliances, standby power. Further, regarding construction of the same batteries under heading "Sealed Nickel-Cadmium Batteries" under para 146 the following is set out : "Sealed nickel-cadmium cells are available in several constructions. Rectangular cells ranging in capacity from 1 to 25 Ah. The construction of these cells is almost identical to the vented cell except for the features noted above. Cylindrical cells ranging in capacity from 0.1 ....
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....le. Before adverting to the scope of the Public Notice No. 32 (PN)/92-97, dated 17th July, 1992, it is relevant to mention as brought out earlier, that the goods imported are secondary batteries of a type which are used in torch lights. These are sealed type and are usable in appliances. Even button cells of Nickel Cadmium configurations are also manufactured for use in consumer articles. Coming to Public Notice No. 32(PN)/92-97, dated 17-7-1992 it is observed that it relates to import of accessories, components, parts and spares of consumer durables. The Public Notice is reproduced below for convenience of reference :       "PUBLIC NOTICE NO. 32-(PN)/92-97, dated 17th July, 1992. Importers of accessories, components, parts and spares of Consumer Durables. Attention is invited to Ministry of Commerce Notification No. 22(N-3) dated 30th June, 1992 amending, inter alia, the definition of "Consumer goods" to include "accessories, components, parts and spares of consumer durables". 2. "Consumer goods" appear in Part II (Restricted items) of the Negative List of Imports. Consequent to amendment in the definition of consumer goods as mentioned ab....
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....onsumed or destroyed in single usage." The consumer durables even going by the Trade parlance test are in the nature of household appliances like refrigerators, mixers, electric pressure cookers, washing machines, etc. and the torch lights are not sold by the dealers who deal in consumer durables which are in the nature of household appliances. In the same dictionary the term "appliance" in the context of household or office is described as under: "appliance ........... d : a household or office utensil, apparatus, instrument, or machine that utilizes a power supply, especially electric current (as a vacuum cleaner, a refrigerator, a toaster, an air conditioner)." The torch lights are sold generally at the shop which deal in consumer goods and not by the dealers of appliances and even in the Departmental stores the same are available at counters dealing in consumer goods for household uses. The goods imported, therefore, cannot be taken to be as intended for consumer durables and for this reason, therefore, it cannot be covered by the provisions of Public Notice 32-(PN)/92-97 referred to above. Further, I observe that the respondents cannot be considered as Actual Users in....
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....r release of the same goods by the Airport Customs authorities, as held by Member (Judicial) or the respondents' goods have been rightly held by the learned original authority as not covered by the OGL for the reason that these are consumer goods as the same are intended for use in torch lights and are sold as power packs which are not consumer durables and also that the respondents cannot be considered as Actual Users and, therefore, not eligible for importation of the goods under Public Notice 32(PN)/92-97 and that the goods are liable for confiscation and the redemption fine fixed by the original authority is not excessive and, therefore, the impugned order has to be set aside and also for the reason that it is a cryptic order without setting out the reasons for allowing the respondents' plea, as held by Member (Technical). Sd/- (S. Kalyanam) Vice President 12-4-1994 Sd/- (V.P. Gulati) Member (T) 7. [Order per : T.P. Nambiar, Member (J)]. - This appeal was filed by the department against the order passed by the Collector of Customs (Appeals) under Order No. C3/Addl 3/93, dated 31-3-1993. After the appeal was taken up by the Hon'ble Member....
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....dents and their manufacturing activity is only for a 10,000 numbers of re-chargeable and emergency lamps per annum. He stated that the imported batteries are consumer goods and thus cannot be equated with re-chargeable batteries and the respondents are not the actual users and the actual user condition cannot be accepted. He also referred to the Public Notice 32(PN)/92-97, dated 17-7-1992 wherefrom it is seen that the goods should be used for actual manufacturing activity whereas according to the Gentleman's agreement and the catalogue produced, it is seen that the respondents are engaged in trading activities and the respondents' claim is therefore not acceptable. 10. In reply to the above points, Shri Kumaraswamy, the learned Consultant appearing for the respondents in the first instance drew my attention to the findings of the adjudicating authority wherein he has stated as follows : "However, as the importer is the actual user I take a lenient view". The learned Consultant contended that the adjudicating authority has come to the conclusion that the Respondents are the actual users and has given a finding in favour of the respondents. He also pointed out that the ....
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....cussed in detail by learned Member (T). He further pointed out there were several cases of allowing clearances of identical goods in Hyderabad, and also in Madras. He also conceded that these are later releases. He further pointed out that in terms of the order of the Collector (Appeals), the High Court has also ordered for the release of the goods and the respondents also took release of the goods. He also pointed out that consumer goods are relatable only to consumer durables and accessories including consumer goods which satisfy directly human needs. Therefore, he pointed out that actual users who were importing consumer goods and component parts and who are manufacturing consumer goods can import the same, after ITC Public Notice No. 32 is withdrawn. 12. Shri R. Victor Thyagaraj the learned SDR reiterated the reasonings of Hon'ble Member (T) as well as the grounds of appeal. 13. I have considered the submissions made by both the sides. In the first instance the learned Member (Technical) has held that used secondary batteries are usable for consumer applications and since it has been admitted that the same are used for torch lights, it is a consumer article and ....
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....e has held as follows :- "However as the importer is the actual user, I take a lenient view". 15. Again in the order portion he stated as follows : "Being actual user and no mala fides are proved I refrain from imposing any personal penalty". It is thus seen that the learned adjudicating authority has come to the conclusion that the respondents are the actual user. It is on this finding that he did not impose any penalty on the respondents. Therefore the department not having filed any appeal against this non-imposition of penalty on the appellant, it is clear that the department also has admitted this position. This is further strengthened by the letter issued by the Industries Department dated 27-12-1993 addressed to the Collector of Customs. In that letter also they certified that the respondents are the actual user. These facts were not taken into consideration in the order passed by the learned Member (T) in coming to the conclusion that the respondents are not the actual user. It is thus seen that this position was accepted by the Department as there was no appeal filed by the Department about the non-imposition of penalty on the respondents by the Additional Coll....