Customs, Excise and Gold Tribunal - Delhi
Audo Viso Corporation vs Collector Of Customs on 14 September, 1990
Equivalent citations: 1991ECR23(TRI.-DELHI), 1991(53)ELT3(TRI-DEL)
ORDER S.K. Bhatnagar, Member (J)
1. This is an appeal against the order of the Additional Collector of Customs, New Delhi dated 22-9-1988.
2. The learned counsel submitted that the appellant is engaged in manufacturing micro-filming equipment and is an eligible Actual user (Industrial). It imported a consignment of Microfilm lenses of 50.3mm F4, 20mm F2.8, 25mm F2.8, 33mm F3 and 41mm F3.5. Bill of entry No. 209852 dated 8th October 1987 was filed for clearance of the goods in question under OGL App. 6(1) of ITC Policy, 1985-88, which related to raw materials, components and consumables (non-iron and steel items) other than those included in the appendices 2,3 part A 5 and 8. The appellants had imported FIVE consignments of similar lenses, spread over three preceding licensing periods (viz.1981-82), 1982-83 and 1983-84, and cleared them under OGL from the same Custom House. During the periods of the earlier clearances the OGL was covered under Appendix 6. Except for this minor change, there was no other change whatsoever in the respective licensing policies. However suddenly, without any prior notice and despite this clear position, the Asstt. Collector of Customs, Airport, Delhi felt that the goods appeared to fall under Appendix 3A, entry No. 549 of Import Policy 1985-88, which related to "Objectives upto magnification X-45" whose importation was required to be covered by an I.T.C. license.
3. No reason whatsoever was given as to why this sudden change in the classification was being made. Similarly no ground was cited in support of the classification of the goods under Appendix 3 A (entry 549). However, in reply to the show cause notice, the following points were inter alia urged :-
The goods imported were microfilm lenses used as components of Microfilm readers. These lenses yielded continuously variable magnification of the microfilms on the built-in screen of the microfilm reader and on an external screen.
4. It was clear that these lenses had continuously variable magnification and that the minimum longitudinal magnification of any of the lenses was more than 45X.
5. Therefore, the lenses imported by the appellants were eligible for import under OGL, Appendix 6, item 1 (viz. as components) or under item No. 46(3)(iii) of the Appendix.
6. The goods were examined by the Technical Appraiser of the Department, who held that the lenses were not objectives and hence did not fall under Appendix 3A, entry No. 549 of the Import Policy 1985-88. The appellants have repeatedly asked for a copy of the report of the Technical Appraiser vide their letters (i) dt. 15-2-1988, (ii) 7-3-1988, (iii) Telegram dt. 24-3-1988 and (iv) 31-10-1988 but the requests have been persistently ignored by the department.
7. The learned counsel stated that in view of the above position, the impugned order was required to be set aside.
8. The learned DR drew attention to the order in original and in particular to the discussions and findings portion of the order and emphasised that Sl. No. 46(3) (iii) refers to cinematograph equipments and the items imported cannot be considered as such. He also pointed out that in fact the offer was made to the importer to make reference to DGTD which is an expert body and one which could advise the department on such matters. The importer has however refused to cooperate and has insisted that he did not want any reference to be made. From this only an adverse inference could be drawn.
9. Furthermore the importation under previous policy periods were not relevant (as the present importation was covered by the period 1987-88).
He also reiterated that in the present matter the dispute was only on a particular issue namely the magnification of the lenses and therefore the point of various continual magnification of micro-film readers referred to by the appellant was not relevant.
He also stated that the learned Additional Collector has referred to the book by Shri Harnam Singh as it deals with the subject of magnification. He further stated that in view of the reasons given by the learned Additional Collector, the goods could not be allowed to be cleared under OGL. In the absence of specific license the goods were liable to confiscation. Hence the order may be upheld.
I find that the learned advocate's submissions have strong force.
First and foremost the show cause notice is vague. It does not give any reason for the department's proposal to consider the item as falling under Appendix 3A, entry No. 549 of the Import Policy 1985-88. Hence this notice dated 13-1-1988 does not constitute a proper show cause notice and the proceedings were liable to be struck down on this ground alone.
That apart the appellants had made detailed submissions. However the learned adjudicating officer has apparently not covered all the points urged therein.
Further if the goods were examined by the technical appraiser then a copy of the report was required to be given to the appellants. The learned Additional Collector is however silent on this point.
Moreover it is not clear as to why an offer was subsequently made to refer the matter to the DGTD.
In any eventuality it shows that the department itself was not sure and such an offer after the issue of show cause notice does not make any sense.
Again in so far as the previous importations were concerned, even if they were under the period of earlier import policies it was required to be seen as to whether there was any substantial change in the policy and the language or contents of the relevant appendices or not. If there was no substantial or significant change then the previous importation would constitute an appropriate precedent and would be relevant. Minor formal change as that in numbering of appendices is of no consequence.
In so far as the technical aspects are concerned it is seen that the learned Additional Collector has referred to a book by Shri Harnam Singh. However it has not been made clear whether it is an authoritative text and if so whether copies of the relevant portions were supplied to the other side. Furthermore the appellant had made detailed submissions regarding the technical parameters particularly on the point of magnification and variable magnifications in an attempt to distinguish between micro-film lenses used as components of micro-film readers and objectives upto the specified magnification and cited excerpts from the authoritative technical work such as Longman's Illustrated Scientific Dictionary.
Neither the Additional Collector nor the learned DR has squarely met this point. The appellants have also filed photo copies of the pamphlets of Metzer Optical Instrument Company and Towa Optics (India) Private Limited to show how the objectives are treated in commerce by the dealers of these goods. They have also produced the opinion of the "All India Instrument Manufacturers' & Dealers' Association" in this regard to show how the term "Objective" is understood in trade parlance.
These documents show that commercially it is the lenses used in telescopes and microscopes which are normally termed as 'objectives' whereas the lenses of micro-film readers are simply referred to as lenses (and not objectives). The department has not met this point (also). In the invoice produced along with the bills of entry the goods have been described as micro film readers - printer lenses and the same description has been given in the bill of entry. Other documents also refer the goods as lenses for micro-film equipment. The appellants have also produced certificates from some of the users to show that lenses of micro-film readers are called as such and not as objectives. Thus it is seen that the department has not contradicted or controverted or proved wrong the material placed before it during the adjudication and the learned Additional Collector has summarily dismissed the point as irrelevant without clearly specifying the reasons for treating it as such.
The learned DR has also merely reiterated the observations of the learned Additional Collector and has not been able to show any material evidence in support of department's contentions.
From the materials referred to above it is apparent that in common parlance, the word "Objective(s)" refers to the lenses normally used in microscope or telescope which generally have a specified magnification. On the other hand the lenses for microfilm readers are simply referred to as lenses. This is even otherwise quite understandable as in the case of microscope and telescope, etc. There are two sets of lenses one constituting eye piece and another constituting the objective and the objective is used in relation to (or rather in contrast to eye-piece) to indicate those lenses or set of lenses which are nearer to the object in contrast to the lenses of the eye-piece which is nearer to eye.
In view of the above position, I set aside the impugned order and accept the appeal as already announced in the open Court.