AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
1984 (4) TMI 294
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....ld that at the relevant time such goods were canalised and should have been imported through the concerned canalising agency, viz. SAIL and not directly by the importers as they had done. 2. Appearing before us for the appellants, Shri D.N. Mehta submitted that the appellants were manufacturers of engine valves from about 1965 onwards. For this purpose, they had to import alloy steel of a particular composition. They were regularly issued import licences for this purpose. The steel which they imported had chromium content of about 20.6%. According to the IS1 Specification for steel for valves for Internal Combustion Engines (IS : 7494: 1981) the steel to be used had to contain 20 to 20% chromium. 3. Action has been taken aga....
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....ot to be treated as canalised. 4. The present case related to an importation made in August, 1982 against two import licences issued for periods prior to 1982-83 and subsequently revalidated. At the time of revalidation an endorsement had been added that import of banned and canalised items would not be allowed during the revalidated period. Appendix 8 of the ITC policy for 1982-83 contained a list, of canalised goods, one of which was bars etc. of stainless/heat resisting steel. This was not a new provision and there was a similar provision in the ITC policy relating to previous licensing periods. However, the ITC policy for 1982-83 for the first time incorporated a specific definition of stainless steel. This was in para 219(v), w....
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.... of the exemption notification it was inconsistent on their part to hold that it was not alloy steel for the purpose of the import licence. 6. Finally, Shri Mehta submitted that even if the Customs authorities found that the goods had to be considered as stainless steel in terms of the ITC policy for 1982-83 and therefore as a canalised item, the confiscation of the goods with a fine of Rs. 1,00,000/-was not justified. He submitted that since the goods were required for an essential purpose (according to him this particular steel was needed for the manufacture of engine valves for supply to the Indian Railways and the appellants had been regularly receiving licences for the import of such steel, there was no question of their not be....
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....ic condition that import of canalised items would not be allowed during the revalidated period. The imports had actually been made during 1982-83 and were accordingly governed by the ITC policy then in force. In Appendix 8 of that policy, Item 63 laid down that among other things, bars and rods of stainless/heat resisting steels of all grades were canalised through SAIL. Further, para 219(v) in chapter 21, ' Clarification and interpretation of the policy, it was specifically stated that any steel containing 12% or more chromium with or without other alloying elements would be covered under the description Stainless/heat resisting steel. In view of this specific provision in the relevant ITC policy, the goods imported by the appellants were ....
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....en importing all along was stainless steel. It is also not disputed that even during the previous licensing periods, the import of stainless steel bars was canalised but import had nevertheless been allowed by the Customs authorities. In fact an objection on this ground was raised in 1981 but subsequently withdrawn. Again, it is not denied that the Customs authorities had allowed even in this very case the benefit of exemption Notification No. 153/82, dated 18-5-1982, for alloy steels used in the manufacture of engine valves. In other words, despite the well-known definition of stainless steel which was clearly applicable to goods such as those imported on this occasion, the Customs authorities had been treating them as alloy steel. 11.&....