Customs, Excise and Gold Tribunal - Delhi
Shree Bankey Behari Lal Board Mills vs Collector Of Customs on 25 August, 1989
Equivalent citations: 1989(24)ECC102, 1990ECR532(TRI.-DELHI), 1990(47)ELT266(TRI-DEL)
ORDER G.P. Agarwal, Member (J)
1. This appeal is directed against the impugned Order-in-Appeal passed by the Collector of Customs (Appeals), Calcutta.
2. Brief facts leading to the present appeal are that the appellants M/s. Shree Bankey Behari Lai Board Mills, New Delhi imported a consignment of Compressed Air Breathing Apparatus sets, consisting of 22 sets in all (two sets out of which were invoiced as 'Samples' having no commercial value). The appellants, Importer sought the clearance of the said consignment under Open General Licence vide Appendix 6, List 2, Serial No. 11 of Import & Export Policy for the year April, 1984 - March, 1985. They also claimed duty free clearance of the imported goods under Notification No. 208/81, dated 22-9-1981. However, it appeared to the authorities concerned from the perusal of the documents that the imported goods may not be eligible either for clearance under OGL or for duty free clearance as claimed by the appellants. It also further appeared to the authorities concerned that it was not clear as to how and under what circumstances the two sets said to be free of charge samples could be sent by the suppliers. The appellants were, therefore, asked vide Query Slip to submit full correspondence with the supplier and catalogue as also to explain O.G.L. coverage and the circumstances under which two sets could be supplied free of charge etc. In reply the appellants' Clearing Agents submitted two letters dated 22-5-1985 and the 6.6.85 stating that no other correspondence was available. It was also stated that no catalogue was available with them. In the said letter dated 6-6-85 New Delhi Liaison Office of M/s. Mitsubishi Corporation certified that their manufacturer M/s. Shown Koatsu Kogyo Co. Ltd. had supplied two pieces of Compressed Air Breathing Apparatus as samples free of charge for getting approval from the buyer. In their letter dated 22-5-1985 M/s. Shown Koatsu Kogyo Co. gave a technical write-up on the Compressed Air Breathing Apparatus. The goods were also examined in original. After examination it was felt by the authorities concerned that the goods imported were not eligible either for clearance under O.G.L. or for duty free clearance and further that the same could not be released without suitability certificate to be obtained by the appellants from the Director of Explosives, Nagpur in terms of Para 169 of ITC Handbook, AM's 1985. Since the requirement of the Show Cause Notice was waived by the appellants' Clearing Agents by making endorsement on the reverse of the Query Slip stating that appellants would not like to have Show Cause Notice but would like to be heard in person, no Show Cause Notice was issued. Personal hearing was granted during which a catalogue was produced regarding the use of the imported Apparatus. Various pleas such as the importation was covered under O.G.L. that they were entitled for duty free clearance under Notification No. 208/81-Cus. and that the necessary permission from the Chief Controller of Explosives has been obtained, were raised in defence. Negativing all these pleas the Deputy Collector of Customs who adjudicated the case, ordered for the confiscation of the imported goods absolutely. Aggrieved, the appellants chased the matter in appeal before the Collector of Customs (Appeals), Calcutta but without success. Hence, the present appeal.
3. Shri N.C. Sogani, learned Consultant for the appellants raised the following three contentions --
(i) The imported goods were eligible for clearance under Open General Licence vide Appendix 6, List 2, Serial No. 11 of the Import & Export Policy for April, 1984 - March, 1985;
(ii) that the appellants did obtain the certificate from the Director of Explosives, Nagpur and produced the same before the authorities below as required under Para 116 of AM '85; and
(iii) that the appellants were entitled for duty free clearance of the imported goods under Notification No. 208/81-Cus.
4. Countering the contentions raised by the learned Consultant, Shri C.V. Durghyaya, learned JDR while supporting the impugned order placed on record (Order No. 247/88-B2, dated 19th April, 1988 passed by this Tribunal in the case of Kooverji Devshi & Co. (P) Ltd. v. Collector of Customs, Bombay (A. No. C/2595/83-B2) wherein Notification No. 208/81-Cus. was interpreted and benefit under it was denied with respect to the imported "Intermittent Pressure Breathing Apparatus".
5. As regards eligibility for clearance under OGL;
Before we proceed with regard to the claim of the appellants that the imported goods were eligible for clearance under Open General Licence vide Appendix 6, List 2, Serial No. 11 of Import & Export Policy April 1984 - March 1985, it would be useful to reproduce the said entry which runs thus -
"APPENDIX 6 LIST 2 List of Life Saving Equipment allowed for Import under the Open General Licence I. to 10. xx xx xx xx II. Portable Intermittent positive pressure breathing apparatus with accessories/compressed air breathing apparatus sets and other breathing protection equipment used by the fire services, filter self rescuer for mines.
12. to 47. xx xx xx xx"
6. It was contended by Shri N.C. Sogani, learned Consultant that the said entry speaks of three Life Saving Equipment namely (i) Portable intermittent positive pressure breathing apparatus with accessories; (ii) compressed air breathing apparatus sets and other breathing protection equipment used by the fire services; and (iii) filter self-rescuer for mines, and since the appellant imported compressed air breathing apparatus sets, the same were covered under the said entry No. 11. In other words his submission was that the term "Portable" is applicable only to "intermittent positive pressure breathing apparatus with accessories" and not to "compressed air breathing apparatus sets". On a careful reading of the said entry as extracted above it is clear that between the two equipment "intermittent positive pressure breathing apparatus with accessories" and "compressed air breathing apparatus sets" "sign oblique" i.e. to say stroke appears. Thus, to accept the contention of the learned Consultant that the term portable is not applicable to compressed air breathing apparatus sets would amounts to the ignoring of the said stroke, which is not permissible in law. For, he has to interpret the entry as it exists. Both the authorities below h'ave also held that the imported compressed air breathing apparatus sets were not portable. We agree with these findings. At one stage it was also urged by the learned Consultant that the imported compressed air breathing apparatus sets was also portable because it could be moved from place to place with easy, if necessary by mounting on a small trolley. To support his contention he drew our attention to the Manufacturers Literature wherein he stated that the trolley can also be provided to carry the Cylinders from one place to another place. We do not agree with this contention. From the Manufacturers Literature which is on record it is clear that the subject imported apparatus consisting steel cylinders complete with valve and cap regulator, flow meter, humidifier, vinyal mask and tube were assigned to the isolation of respiratory organs, eyes and face skin in contaminated areas with an inadequate oxygen content. In the said Literature it is further mentioned that the advantage of this apparatus was user has not to carry the cylinder on his back which enables him to enter even into narrow spaces and to carry out work with a duration even upto 3-4 hours. From the adjudication order we find that the subject apparatus were examined in original and on examination the cylinders were found to be big oxygen gas cylinders and generally seen in hospital for supply of oxygen gas. The Collector (Appeals) in his impugned order has stated that as per the documentary evidence on record the net weight of the subject apparatus sets was more than 61 kgs per set of which the weight of the mask and the tubing was of nominal weight. On these observations the Collector (Appeals) had recorded a finding that the cylinders in question cannot be carried on person, easily lifted or carried from one place to another. The Adjudicating Authority has also recorded a finding that the cylinders in question was quite heavy and about six feet high (almost like an industrial gas cylinder). We agree with this finding and reject the contention of the learned Consultant that the subject cylinders were portable because it could be moved from place to place by mounting on a small trolley.
7. Attacking on the findings recorded by both the authorities below that the subject cylinders were not needed for fire services or Filter Self Rescuer for mine Shri Sogani, learned Consultant submitted that the words "use by Fire Services or Filter Self Rescuer for mines" qualify only "other breathing protection equipment" and therefore for compressed air breathing apparatus sets it is not necessary that this should be used by the Fire Services or filter self rescuer for mines.
8. We have considered the submissions and find force in it but it does not change the complex of the case because the subject apparatus sets were not portable as held by us earlier.
9. Thus we hold that the appellants were not eligible to clear the subject goods under OGL vide Appendix 6, List 2, Serial No. 11 of Import & Export Policy for the year April, 1984 - March, 1985.
10. As regards Para 116(6) of AM '1985 :
The Deputy Collector of Customs, who adjudicated the case has held that the subject goods cannot be released as the importer has failed to produce the requisite permission from the Chief Controller of Explosives as required under the gas cylinder Rules, 1981 in terms of para 116(6) (iii) of the AM '1985. The Collector (Appeals) has also held accordingly in his impugned order.
11. Attacking on these findings Shri Sogani, learned Consultant for the appellants submitted that the appellants did produce the certificate dated 18-5-85 issued by the Chief Controller of Explosives as required under para 116(6) of AM '1985. Elaborating on his arguments Shri Sogani, learned Consultant submitted that vide letter dated 18-5-85 permission to import 20 cylinders was granted to the appellants whereas the appellants had imported 22 cylinders. Therefore, the appellants vide their letter dated 21-8-85 applied for the amendment of the original licence dated 18-5-85 allowing the appellants to import 22 cylinders and the same was amended vide Chief Controller of Explosive's letter dated 26-8-85. From the impugned order we find that the Collector (Appeals) had rejected the said amendment by observing that the quantity and the description given in the said permission did not tally with the subject goods inasmuch as a valid certificate must specifically cover the quantity and description of the goods with reference to a particular invoice and should also indicate the particulars of the consignment such as vessel's name, Rot No. Line, manufacturer's name, cylinder Serial No. etc. so that the cylinders can be subsequently identified in case of any eventuality. From the appellant's letter dated 21-8-85 we find that the appellants did apply for amendment by stating that they by mistake wrote 20 cylinders but in fact suppliers had supplied 22 cylinders and therefore the letter dated 18-8-85 be amended accordingly. With reference to this letter of the appellants dated 21-8-85 the Chief Controller of Explosives amended the licence, as desired. The relevant portion of the said permission of the Chief Controller of Explosives vide his letter dated 26-8-85 reads as follows -
"G. 3(4) 52/SK/84 Government of India Department of Explosives Nagpur, Dated the 26th Aug., 85.
To Shri Bankey Behari Lai Board Mills, 45, Lekh Ram Road, Darya Ganj, NEW DELHI-110 002.
Sub: Import of 22 nos. medical Oxygen cylinders conforming to JIS:B:8241 specification, bearing Sr. Nos. SBBBM 00001 to SBBBM 00020 & Sample 18 and Sample 19 manufactured by M/s. Shown Koatsu Kogyo Ltd., Japan - inspected and certified by Bureau Veritas - Permission for filling.
Dear Sir, Reference your letter dated 21-8-85.
Licence No. G. 3(4) 52/SK/S4, dated 18-5-85 is returned herewith duly amended, as desired.
Yours faithfully, Sd/- (S.K. Bhardwaj) Controller of Explosives for Chief-Con-
troller of Explosives.
Copy forwarded to :-
1. The Collector of Customs, Calcutta There is no objection to the release to the subject cylinders."
2. The Traffic Manager, Commissioners for the Port of Calcutta, Calcutta
12. From the above it is clear that the permission to import 22 cylinders was accorded to the appellants and the findings of the Collector (Appeals) that the subject goods do not tally with the quantity and the description is not correct.
13. As regards benefit under Notification No. 208/81-Cus.
Both the authorities had denied the benefit of the said exemption Notification No. 208/81-Cus., dated 22-9-81. The Deputy Collector of Customs while denying the benefit observed as follows -
"...Lastly, the point considered is whether the equipment is entitled for exemption from Customs duty as compressed air breathing apparatus and other breathing equipments. I find from the sample that the air breathing apparatus as such forms only an insignificant part of the importation and the main item is the pressure valve attached to the cylinder. The pressure valve and the cylinder can have general purpose application and it does not appear from description in the catalogue that it is specifically designed for the particular end-use. Hence the exemption from Customs duty cannot be extended to the cylinder and pressure valve although the air breathing part of the equipment may be entitled for exemption. However, there is no break-up invoice to indicate the value of the air breathing apparatus as against the valve of cylinder and the pressure valve. On these considerations, I do not find that it is possible to extend the benefit of exemption notification to the imported equipment."
On appeal the Collector (Appeals) while confirming the order of the Deputy Collector of Customs observed as follows -
"With regard to the last point namely the question of eligibility for benefits under Notification 208-Cus., dated 22-9-81, it is seen from the submissions of the appellant that the impugned goods are actually meant for use in industry and not for medical use as implied under the said Notification. It is important to note that for purpose of deciding any medicine, drug and equipment not specifically covered by any serial number in the Table A, B & C of the Notification the competent authority to decide the question for facility of clearance without payment of duty is the Director General or Dy. Director General or Assistant Director General of Health Services. But the impugned goods are not covered by any such certificate nor imported under the sponsorship of the Ministry of Health and are intended for use in industry as a safeguard to an able-bodied person in rescue work. Hence the impugned goods are not strictly covered by Notification 208/81-Cus. for facility of clearance without payment of duty".
14. Attacking on the said findings Shri Sogani, learned Consultant submitted that the said Notification does not restrict the scope of the goods for use only in Hospital and as long as the goods are covered by the description "compressed air breathing apparatus sets" mentioned in the Notification as amended they would be eligible for the benefit under the said Notification. As regards the need of recommendation/certificate of the competent authority i.e. to say Director General of Health Services, Shri Sogani, learned Consultant submitted that when the goods imported are specifically covered by Sr. No. 5, Part-B of the said Notification there was no question of approaching the Director General of Health Services on a specific recommendation.
15. We have considered the submissions and find no force in it in view of the ratio of the judgment delivered by this Tribunal in the case of Kooverji Devshi & Co. (P) Ltd. v. Collector of Customs, Bombay (Appeal No. C-2595/83-B2) delivered on 19th April 1988 (Order No. 247/88-B2). In that case intermittent pressure breathing apparatus were imported, benefit of the Notification under reference i.e. to say Notification No. 208/81-Cus. as amended by Notification No. 262/82-Cus. was claimed. Negativing the contention it was observed that "the notification concerns itself with treatment of diseases and the facilitation of cures, for which drugs, medicines, and equipments are necessary aid and adjuncts. It is not for knowing (nothing) that both sections 'A' and 'B' of the schedule to this notification list drugs, injections, capsules and other medicinal preparations that would be commonly used in hospital for diagnosis of illnesses and treatment of patients. In schedule 'B', we can find things like cardiac catheters, cardio vascular sutures, coronary perfusion cannulae, vascular tissue forceps, heart valve prosthesis and many others. It would be an anachronism for one to suddenly come upon a fire fighters' breathing mask in this company. The learned counsel for the importers say that the words "other breathing equipments" will fully account for the goods under dispute; but I disagree. The equipment may be other breathing equipment, but it must be of the kind used by the medical profession, or in hospitals, in the treatment and healing of people in need of medical care, not of a healthy person who goes into a burning building to douse the fire, and who is equipped for the task he has to perform not only with fire fighting gear, but is also provided with suitable protective outfit. I am, therefore, not able to accept that the imported intermittent pressure air breathing apparatus can be passed under Item 5 of Section 'B' of the schedule to Notification No. 208/81-Cus". We respectfully follow the ratio and disallow the claim of the appellants.
16. From the record we find that the request of the appellants to redeem the subject goods on payment of a suitable redemption fine in lieu of confiscation was not accepted by both the authorities below. Since we have held as aforesaid that the permission to import the subject goods was accorded to the appellants by the competent authority namely Chief Controller of Explosives, we think it expedient in the interest of justice that the appellants may be given an option to pay the fine in lieu of confiscation. We order accordingly and taking into consideration the value of the goods we give an option to the appellants to redeem the goods on payment of a redemption fine of Rs. 15,000.00 within three months from the receipt of this order.
17. In the result subject to the modification as aforesaid the appeal is otherwise rejected.