Customs, Excise and Gold Tribunal - Mumbai
Chirag International vs Collector Of Customs And C. Ex. on 14 January, 1988
Equivalent citations: 1988(38)ELT339(TRI-MUMBAI)
ORDER K.L. Rekhi, Member (T)
1. This appeal arises out of and is directed against Order-in-Original bearing No.F.VIII/10-14/CUS/Tech/87 dated 23.9.1987 passed by the Collector of Customs & Central Excise, Rajkot.
2. The appellants imported 12.600 M.T.(252 drums) of Potassium Cyanide and sought its clearance against three REP import licences issued under the Registered Exporters Policy against Export product group A 82(i). Their licences included "electroplating salts and brighteners" as one of the specific items of import. The appellants sought clearance of Potassium Cyanide against this entry. The Collector has held that this entry did not cover the goods and that, therefore, the licences were not valid for the following two reasons:-
(1) The generic description "electroplating salts and brighteners" could cover such items as found widespread and general use in electroplating. Potassium Cyanide had a rare or scant application in electroplating. It could not, therefore, come under the generic entry in the import licences. This had been clarified in the Public Notice under No. 26/86 dated 10.2.1986 of the Bombay Custom House. Yet, the appellant went ahead to import a large quantity of Potassium Cyanide against the entry "electroplating salts and brighteners" which showed malafides" on the part of the appellant.
(2) Even if covered by the generic entry, import of Potassium Cyanide was not permissible since paragraph 21 (c) of the Import Policy read with the specific entry in Serial No. 355(10) of Appendix 3 thereof prevailed and an item specifically named in the restricted list of Appendix 3 could not be imported against a generic description.
The Collector ordered confiscation of the goods and adjudged the fine for their redemption at Rs. 11,84,500.00. He also imposed a penalty of Rs. 50,000/- on the appellants. The appellants are in appeal against this order.
3. We have heard both sides and carefully considered the matter. The appellants have laid before us photocopies of scientific and technical literature to show that Potassium Cyanide is one of the chemicals used in electroplating. It has, no doubt, other uses also, such as for extraction of gold and silver from ores; reagent in analytical chemistry, insecticide; fumigant. The fact that it does find use in electroplating is born out by the Bombay Custom House Public Notice No. 26/86 dated 10.2.1986 itself, which admits its use in electroplating in scant quantities. The extent of use of Potassium Cyanide in electroplating is not discussed in the Technical Literature placed before us by the appellants. But since the Bombay Custom House Public Notice is based on the technical advice of an ex-pert chemist, we take it that the use of Potassium Cyanide in electroplating would be rare or scant. Yet, we have not been shown anything in the Import Policy for the period (AM 85-88) which says that a salt finding a minor application in electroplating is not be considered an electroplating salt. On the contrary, the Bombay Custom House mentioned by name five different chemicals, including Potassium Cyanide and Sodium Cyanide which found, according to the said Public Notice, scant use in electroplating. Some eight months later, the licencing authority issued a Public Notice to amend the Import Policy showing that import of Sodium Cyanide will not be allowed against entry "electroplating salts and brighteners". We take it that the position stated and the view taken in the Bombay Custom House Public Notice dated 10.2.1986 was within the knowledge of the licencing authority. The said authority too had technical experts to guide it. Yet, the said authority chose to disallow import of only Sodium Cyanide and not that of Potassium Cyanide or any other chemical as electroplating salts. Impliedly, therefore, the said authority took the view that Potassium Cyanide could come in against the entry electroplating salts. Once the use, whether scanty or general, is accepted, the extent of use is hardly relevant. The licencing authority had the chance to disallow the import of Potassium Cyanide also if it wanted to. But it did not choose to do so. We, therefore, agree with the appellant that the generic entry "electroplating salts and brighteners" covered Potassium Cyanide.
4. As regards paragraph 21 (c) of the Policy, we find that this paragraph reads as under:-
"21 (c) an item with a specific description in Appendix-2, Part-B or 3 Part-A, will prevail over an item with a generic description in any of these appendices."
5. It would be seen that this paragraph specifically mentions two Appendices-2 and 3. The latter words in the paragraph "in any of these Appendices", therefore, can refer to only these two Appendices named in the para viz. Appendices 2 and 3, and not to all the Appendices in the Policy. If the intention were to give an overriding force to paragraph 21 (c) over all other Appendices in the Policy the concluding words would have been "in any of the Appendices" and not "in any of these Appendices. The items permissible to the Registered Exporters are contained in Appendix 17 of the Policy. This Appendix is more or less a self-contained one and it contains its own conditions and limitations. The only condition in this Appendix, which is relevant for the discussion before us, is condition No. 5 which reads as under:-
"5. No import of an item appearing in Appendix 2 shall be allowed against REP licences, except if an item appearing in Appendix 2 Part B is specifically described for import either under Col. 4 or under Col. 5 or against an Advance/Imprest Licence issued under this Policy."
We find that only Appendix 2 has been given over-riding force over Appendix 17. Appendix 3 has not been any such over-riding force. Appendix 3, in which entry Serial No."355(10) - Potassium Cyanide" occurs is the list of limited permissible items. The Entry 355(10) is a very specific one, no doubt. But it having not been given an over-riding force over Appendix 17, it could not exclude Potassium Cyanide from the generic entry "electroplating salts and brighteners". We are fortified in our conclusion by the Division Bench Judgment of the Hon'ble Andhra Pradesh High Court at Hyderabad in Hyderabad Engineering Industries v. Chief Controller of Imports & Exports, New Delhi -1987 (32) ELT 620 (AP) in which it has been held that Appendix 17 was not subject to Appendix 3. This judgment was in the context of AM 80-81 Policy in which, in paragraph 197(b) which corresponded to paragraph 21 (c) of AM 85-88 Policy, the words used were "in either of these Appendices". Though, in paragraph 21 (c) the word "either" was replaced by the word "any", its use in juxtaposition with "these appendices", meant the samething. We, therefore, hold that the restrictions of paragraph 21 (c) read with the specific Entry 355(10) of Appendix 3 could not come in the way of Potassium Cyanide being imported against the REP licences issued under Appendix 17.
6. We, therefore, find neither of the Collector's objections sustainable. All the same, we have before us the view of a technical expert to the effect that Potassium Cyanide finds only scant use in electroplating. On the other hand, we find that the appellant has imported as much as 12.600 M.T. of it. Potassium Cyarnide. as is well known, is a lethal poison. It is not within our jurisdiction to look into post-importation utilisation of the imported material. We are concerned only with the validity of the importation itself. While, therefore, going strictly by the Policy, we hold that the importation was valid, we deem it necessary to bring the fact of importation to the notice of the Chief Controller of Imports and Exports, for such action as he may consider appropriate. With this observation, we set aside the impugned order and allow this appeal with consequential relief to the appellants.
7. A copy of this order shall be sent to the Chief Controller of Imports and Exports, Udyog Bhavan, New Delhi, also.