Customs, Excise and Gold Tribunal - Mumbai
Century Enka Ltd vs Commissioner Of Customs, Nhava Sheva on 28 March, 2001
Equivalent citations: 2001(132)ELT494(TRI-MUMBAI)
ORDER
Gowri Shankar, Member (Technical)
1. The appellant imported a consignment of plastic pallets, claiming clearance without producing a licence. The department was of the view that these plastic pallets were consumer goods and hence required an import licence. The importer having waived written notice was heard by the Assistant Commissioner, who passed orders holding the goods to be consumer goods which required an import licence. This order having been confirmed by the Commissioner (Appeals), the appellant is before this Tribunal.
2. The pallets in question are of types used to convey the goods. They have slots in them to accommodate the prongs of a forklift to facilitate easy and convenient lifting and transport of packages loaded on them. The import policy was recast in 1.4.1996 so as to align it to the Customs tariff which is in turn aligned with the Harmonised System of Nomenclature of the Customs Corporation Counsel, now known as the World Customs Organisation. The ITC HS Classification published by the licensing authority attempts to show against each sub heading such a classification the import policy for the goods covered by that sub heading i.e. free, restricted, prohibited etc. The goods under consideration would be classifiable under heading 39.23 of the Customs tariff under subheading 90, which includes "articles for the conveyance or packing of goods, of plastic; stoppers, lids, caps and other closures, of plastics." The licensing classification breaks up subheading into two further sub headings. Sub heading 39239000.10 is for "Other plastic articles for conveyance and packing of goods, of a kind classified as consumer goods." Import of goods in the category is restricted and requires a licence or a specific exemption. The other sub heading 39239000.10 is for "Other" and the policy permits free importation. The question therefore is whether these goods are of a kind classified as consumer goods.
3. "Consumer goods" are defined in the policy as meaning "any consumption goods which can directly satisfy human needs without further processing and include consumer durables and accessories thereof." For anything to be considered to be consumer goods, therefore, it must satisfy three requirements-it must be consumption goods, it should directly satisfy the human needs and it does not need further processing. This definition gives rise to innumerable of difficulties. What, to start with, is the meaning of the term "consumption goods?" Are goods which are not consumed in their utilisation, such as garments, covered by this term or not? If the term "consumption" is to be considered as meaning, in its larger sense, use, they would be covered. But then, virtually everything would be consumer goods. It is difficult to think of any article, other than works of art, curios and suchlike, which provide pleasure or satisfaction by their mere presence, which are not designed to be put to use. The scope of the term "direct satisfaction of the human needs" is again equally unclear. By strictly construing this term, fabric in running length would not be consumer goods. It cannot, in such length, satisfy and need. It has first to be cut and fabricated into a garment. The third clause, relating to further processing, reinforces this view. But this, too, poses difficulties. Does the "processing" refer to any and every kind of processing. Would it include simple operation such as boiling, cleaning etc or more complex operation requiring machinery and skill? Would it mean that a potato which needs to be cooked before it can be eaten would not be consumer goods, whereas a carrot which can be consumed without cooking is consumer goods. The scope is also not explained. The Assistant Commissioner has said that the pallets satisfy the human needs for storing the materials. But this is a simplistic statement. One may as well say that a nuclear reactor is consumer goods because it satisfies the human needs for endangering nuclear fission, or a bull dozer because it satisfies the human need for demolishing structures. It would be reasonable to say that consumption directly that is without there being any intermediate steps recognise human needs such as a need for food, clothing, shelter, etc. That no doubt is the object of the policy to restrict or prohibit import of goods which are so used as distinct from other goods which are used in any industrial processors so as to bring into existence of such consumer goods.
4. It is not denied that virtually exclusive use of these goods is for storage and removal of goods such establishment as a factory and warehouse. The Assistant Collector has tried to get around this by referring to judgement of the Bombay High Court in United Breweries Ltd vs Union of India 1994 (53) ECR 13. In that judgement the High Court has not accepted the contention that sodium vapour lamps are not consumer goods because they did not use to light for illumination and domestic purpose. The judgement, in my view, is irrelevant to the facts before me. The purpose of illumination is to directly satisfy the human needs to see therefore as a lamp if wherever it is fitted is to provide light for this purpose is human needs, thus directly satisfy the human needs. There is no such direct satisfaction with the use of these pallets in industrial or commercial establishments.
5. The distinction that is made in the policy sub heading reproduced above, obviously 3923 is to prohibit or to restrict import of such articles for conveyance and packings as are used to pack or to carry goods which are clearly identifiable as consumer goods, thus bottles, jars etc used to pack and convey such items shampoos, food products etc would be consumer goods those used not for this purpose but any industrial or commercial processings would not be. On this reasoning, I am satisfied that it was incorrect to hold the goods to be consumer goods. Therefore, import was not prohibited.
6. The appeal is accordingly allowed and the impugned order set aside.