TaxTMI 
TaxTMI 
2003 (5) TMI 528
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....eration. The appellants have imported a quantity of 107 MTs of Non-Alloy Melting scrap for the value of Rs. 5,89,614/- and they have filed Bill of Entry No. 027835, dated 19-9-2002. Import of Non-Alloy Steel Melting Scrap is figuring in Group-1 in the said licence. But the licence restricts Group-1 value to US $ 96,142.44. In the said group-1, there are two Sensitive List-III items (items for which licence shall be issued with individual quantity and value limits) namely Low Silica Lime Stone (1c) and Cooking Coal (with ash content less than 1%) or Low Ash Metallurgical Coal with ash content below 15% (1d). Item No. (1c) namely Low Silica Lime stone is issued with quantity of 595.06 MTs with the individual value cap of US $ 8925.99 and item No. (1d) with quantity limit of 959.78 MT with individual value cap of 62,385.95 US $ . In the said licence, item Melting Scrap has already been imported for a value of US $ 39,509.50 vide Bill of Entry No. 013570, dated 22-6-2001. Condition No. 3 of the said licence and the Head Note to Sensitive List-III items at the relevant time placed a restriction that the individual CIF value earmarked for Sensitive List-III items shall not be utilized fo....
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.... has to be acted upon by the Customs authorities. (c) The lower appellate authority has not appreciated the fact that the Hon'ble Apex Court has laid down demarcation of the jurisdictional aspect of the Customs Authority and the Licensing authority as held in their judgment in the case of Union of India v. Tara Chand Bros. reported in 1983 (13) E.L.T. 1456 wherein it was held that the jurisdiction of the Customs Authorities starts only from the jurisdiction so exercised by the Licensing authority. (d) The circulars issued by the Licensing authority is binding on the Customs authorities. 3. Shri G.L. Rawal, learned Sr. Counsel for the appellants vehemently argued that both the lower authorities have not appreciated the case in the right perspective. He has pleaded that the appellants are operating under the DEEC scheme. In the Group-1 category there are items which are termed as sensitive and non-sensitive. In terms of the licence issued by the Licensing Authority, value of sensitive items can be exchanged for the value of non-sensitive items and the only condition is that there cannot be any interchange of items between one group and another gro....
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....ific items are indicated and import shall be restricted to that extent and the c.i.f. value shall not be utilized for import of other items. Flexibility will be available for import of one or more items within the value of a particular group. Interchangeability of value between groups of import will not be allowed. He has invited our attention to Para 48 of the Import & Export Policy for April, 1992 - March, 1997 (incorporating, amendments made up to 25th March, 1996) which reads as under : "Advance licence is granted for the import of inputs without payment of basic customs duty. Such licence shall be issued in accordance with the policy and procedure in force on the date of issue of licence and shall be subject to the fulfilment of a time-bound export obligation and value addition as may be specified. Advance licence may be either value based or quantity based." He also referred to para 110 of the Exim policy as on March, 1994 dealing with Value Based Advance Licence which reads as under : "Application for value based advance licence with complete details of quantities and value of items of import and export shall be considered only for such export products w....
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....ble for the values earmarked for sensitive List-II items and not for Sensitive List III items, because the policy itself says that the values earmarked for Sensitive List-III items cannot be used for importing other non-sensitive items, whereas no such condition is there for Sensitive List-II items. He has further submitted that the clarification no where mentions that the importer can use the values earmarked for sensitive List-III items for importing non-sensitive items. The learned DR invited our attention to the decision of the Tribunal in the case of General Traders v. CCE, Calcutta reported in 2000 (124) E.L.T. 971 (T), wherein it has been held that any clarification issued by the DGFT, when found by a Court or Tribunal to be in conflict with a clear provision of the Import & Export Policy, is not binding on that Court or Tribunal. It was further held therein that while clarification from DGFT that licence is not required was correct and acceptable, the rest of the clarification that import subject to input output norms of Advance licence was not acceptable as requirement of input output norms of Advance licence is not applicable to para 7.12 of Export-Import Policy. The Trib....
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....s against a licence issued on 7-12-1993. In terms of the EXIM policy 1992-97 licences in respect of items listed in Sensitive List-III shall be issued with both the value and the quantity as limiting factors. We observe that in the subject licence there is a condition at Serial No. 3 which reads as under : "Where the individual quantity and values of specific items are indicated, import shall be restricted to that extent and the CIF value shall not be utilized for import of other items. Flexibility will be available for import of one or more items within the value of a particular group. Interchangeability of value between groups of import items will not be allowed". On a reading of the above condition in the licence with which we are concerned in the present case, it is clear that where the quantity and value of specific items are indicated, CIF value cannot be utilized for import of other items. Further in terms of para 110 of the policy dealing with Value Based Advance Licence, applicable at the relevant time, i.e. as on March, 1994, which we have extracted above," the licence holder shall have the flexibility to import any one ore more item(s) within the overall valu....
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.... Shakun & Company (Services) Private Ltd. B-10, Gagan Deep, 12, Rajendra Place, New Delhi - 110 008, PH : 5716945, 572 2081, Grams Pub Notices ALC CIRCULAR No. 20/95, Dated 4th October, 1995 Utilisation of balance value of sensitive items not imported under Advance Licences for importing non-sensitive items - regarding. Attention is invited to paragraph 49 of Export Import Policy 1992-1997 as amended up to 31st March, 1995 and paragraph 110 of Handbook of Procedures (Vol. 1) as amended up to 30th April, 1995 relating to utilisation of value earmarked for sensitive items for importing non-sensitive items under Duty Exemption Scheme. A doubt had been raised whether this locality is available even if part of the value earmarked for sensitive item has been utilised for import of such items. It is hereby clarified that even if part value earmarked for sensitive items have been so utilised balance value available in respect of sensitive items can be utilised for import of non sensitive items. Sd/- (L.B. Singhal) Dy. Director General of Foreign Trade ....
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....ot been made in accordance with the condition laid down in the licence granted by the licensing authority and in terms of the policy as amended as on March, 1994. It was also held in the cited judgment that "Function of the Tribunal is to see whether the impugned order is valid or not, keeping in view the Statutory Provisions (emphasis supplied by us). The General Circulars and communications cited by the learned Counsel for the appellants do not have any statutory force. The learned Counsel for the appellants has also cited the judgment of the Hon'ble Apex Court in the case of East India Commercial Co, ltd. v. Collector Customs, Calcutta reported in SC Reports 1963, page 338. This judgment has no relevance to the present case as the facts and circumstances in that case was not similar to the present one before us. That was a case where certain raw materials were imported into the country for consumption as raw material in the licence holder's factory but instead of using the raw material as such by the factory concerned, the goods were sold in open market and the Custom department issued notice alleging breach of condition of licence and for confiscation of the goods. On a....
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....ired to specify the quantity or CIF value or both each of the said sensitive items. It was argued that it is the prerogative of the licensing authority to issue any licence and conditions lay thereupon but it is not within the jurisdiction of the customs authorities to go at the back of the licence. The jurisdiction of the customs authorities commences from the point where Licensing Authority exhausts/applies its jurisdiction. He also pointed out that Condition 3 of the licence gives right of flexibility to the appellant in the group itself could have been applied but though interchangeable from one group to the other is not permissible. He submitted that the appellant was entitled to take benefit of flexibility from one item to the other item in the same group i.e. Group No. 1 and it is also open to take benefit of flexibility even of value of sensitive goods in the same group. He submitted that flexibility will be available for import of one or more items giving value of a particular group. He stated that appellants were taking the benefit of flexibility in the same group viz. Group 1 as it doesn't restrict to take benefit of the unutilized value of the item, may be sensitive....
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....submissions raised in the order noted by the authorities. 13. On my careful consideration of the submissions, I am agreeable with the pleas raised by the appellants in the matter. The circular issued by the licencing authority has a clear binding force as has been held in the judgments cited by ld. Sr. Counsel in the matter. The circular clearly grants flexibility and the appellants in terms of the said clarification have imported the items and those items fell within the same Group 1 which is not in dispute. It is not the case of the department that appellants are trying to seek benefit of the item which is not in the same Group. Therefore, learned Counsel clearly demonstrated that the benefit was being obtained only against the items falling in the same group irrespective of item being sensitive or non-sensitive. Therefore, in view of the clarification issued by the DGFT which had binding effect, the appellants are entitled to seek benefit of notification and hence non-grant of the same is not correct and appeal is required to be allowed by setting aside the impugned order. Ordered accordingly. Sd/- (S.L. Peeran) Member (J) POINTS OF DIFFERE....
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....cleared duty-free under the licence in June, 2001. Learned Member (Technical) has upheld the Revenue's stand that the total value limit for import of NASM Scrap by the appellants under the licence was US $ 24/800 and odd only, i.e., 96/142.44 minus 71/311.94, and the said limit had already been exceeded (with the earlier importation of NASM Scrap of value US $ 39509.50) and therefore the 100 MTs of NASM Scrap in question should be assessed to duty at Tariff rate applicable. Learned Member (Judicial) has, on the other hand, taken the view that, in the absence of importation of the Group-1 (c) and (d) goods, the value limit of US $ 71/311.94 prescribed for such goods was available for utilization in duty-free clearance of the 100 MTs of NASM Scrap in question under the DEEC Scheme under Notification No. 203/92. 15. Learned Sr. Advocate mainly banked on the following licence condition : "Where the individual quantity and values of specific item are indicated import shall be restricted to that extent and the CIF values shall not be utilised for import of other items. Flexibility will be available for import of one or more items within the value of a particular group. In....
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....sitive items was not to be utilized for duty-free import of other items as per Paragraph 110 of the Handbook of Procedures (Vol. I) for 1992-97 as amended up to 31-3-1994. The licence condition cited by the learned counsel should be construed only in the light of this provision as the licence had been issued during 1993-94. It was only after 31-3-94 that para 110 ibid was amended so as to permit Value Based Advance Licence holders to use the value of sensitive items for importing non-sensitive items. What the DGFT circular dated 4-10-95 relied on by the counsel clarified was the entitlement of such licence-holders under the amended provisions of the EXIM Policy. No clarification of the DGFT on a licence-holder's right of duty-free imports under the DEEC Scheme as on 31-3-1994 was brought on record by the appellants. Ld. DR thus argued that the DGFT circular dated 4-10-95 and the case law cited by the counsel in the context were not applicable to the instant case. Extracting from the Handbook of Procedures 1992-97 (as amended up to 31-3-94), learned DR submitted that both Limestone and Cooking Coal/Metallurgical Coke figured in List III of SENSITIVE ITEMS, for which it was stipu....
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....values so mentioned were not to be utilized for import of the Scrap. This condition is quite compatible with para 110 of the Handbook of Procedures for the period of issue of the licence. 18. Coming to the second part of the above licence condition, which is in the centre of dispute in this case, I am of the considered view that the same cannot be construed in a manner repugnant to the first part. It has to be construed harmoniously with the rest of the condition so as to advance the object of the Policy provisions. I think, in this context, I am supported by relevant rulings of the Apex Court vide British Airways v. UOI [2001 (139) E.L.T. 6 (S.C.) - 2001 (47) RLT 264 (S.C.)]. The second part of the licence condition says that flexibility will be available for import of one or more items within the value of a particular group. It further says that interchangeability of value between groups of import items will not be allowed. It is apparent that the second part of the licence condition provides for intra-group flexibility and rules out inter-group flexibility. The intra-group flexibility for utilization of the value of one item in a given group for importing another item in the ....