Customs, Excise and Gold Tribunal - Delhi
Ganesh Exports vs Collector Of Customs on 17 April, 1996
Equivalent citations: 1996(88)ELT134(TRI-DEL)
ORDER J.H. Joglekar, Member (T)
1 This appeal is against the Order-in-Appeal dated 17-6-1994 of the Collector (Appeals), Customs, New Delhi.
2. The issue involved in this case is whether the goods imported by the appellants claimed to be "artificial fur cloth", which were claimed to be "long pile fabrics" by the customs could be described as consumer goods, the import of which at the material time was restricted under the Import Control Policy then in force.
3. The appellants were represented by Shri G.L. Rawal, Advocate assisted by Ms. Sangeeta Jain, Advocate. The Revenue was duly represented by Shri Ram Sharan, JDR.
4. The ld. Advocate claimed that the impugned goods could not be brought under the description in entry at Sl. No. 172 of Appendix-2B. This entry covered consumer goods. Referring to the definition of consumer goods as given in Chapter-I of the Policy, he claimed that in order to fall in this category, the goods had to directly used without further processing. He said that appellants have imported these goods as raw materials for the manufacture of soft toys. Considerable processing was involved before such cloth could be converted into such toys. The goods were imported in rolls of about 50 mtrs each and were not capable of directly satisfying any human need. The ld. Advocate claimed that the definition of consumer goods had been discussed in a number of judgements. He cited the following judgments in support of his stand.
1.1986 (25) E.L.T. 114 (Tribunal) 2.1993 (66) E.L.T. 441 (Tribunal) 3.1988 (38) E.L.T. 679 (Tribunal) 4.1994 (71) E.L.T. 310 (Tribunal)
5. Arguing on the allegations, the importers had deliberately mis-declared the impugned goods, for seeking benefit under the policy, the ld. Advocate claimed that his clients had earlier imported several consignments of the same goods, which had been cleared by the Customs without such objection being raised. His clients for the impugned consignments had made the same declaration and had un-necessarily been penalized. Citing the following judgements, he claimed that the imposition of penalty was unwarranted :-1.1992 (62) E.L.T. 815 (Tribunal) 2.1994 (72) E.L.T. 620 (Tribunal)
6. As regards the classification also, the ld. Advocate claimed that in the earlier consignments as well as in the present consignment, the same classification has been suggested by his clients.
7. Arguing for the Revenue, the ld. JDR reiterated the remarks and the contentions of the ld. Collector (Appeals), Customs.
8. I have carefully considered the submissions made by both the sides and perused the relevant records and citations.
9. The main issue involved is the classification of the impugned goods for the purposes of the Import Control Policy as the then existed. At the material time, Appendix-2(B) listed those goods, import of which was prohibited or was restricted. There was an omnibus entry under SI. No. 172 which read as under :-
"172. All consumer goods, howsoever described, of industrial, agricultural or animal origin, not appearing individually in Appendices 3 Part A and 5 or specifically listed for import under Open General Licence."
10. The coverage of this term was defined in Chapter-I as follows :-
"18. "Consumer Goods" for the purpose of Import Policy, will mean consumption goods which can directly satisfy human beings without further processing ... ".
11. The impugned goods as per the Invoice accompanying the bill of entry were in rolls of about 50 Mtrs length and of width of 60". The show cause notice observed that long piles fabrics were consumer goods specifically covered under Appendix-2(B) Sl. No. 172. The appellants plead that the goods' coverage under the said entry was not substantiated either in the show cause notice or in the discussion of the Original Authority. The Original Authority has spent considerable energy in establishing that the impugned goods were not artificial fur cloth but were long piles fabric. Before the Collector (Appeals), the present appellants claimed that these two terms were similar. It was their claim that in the Trade Parlance, the two articles were inter-changeable. Both the Original Authority and Appellate Authority spent considerable time and energy in establishing that long piles cloth were different from artificial fur cloth. It was held that artificial fur cloth could fall under Appendix-3A but long piles cloth could not. It appears to me that neither the Original Authority nor the Appellate Authority examined the area and coverage of the relevant entry in Appendix-2(B) to satisfy themselves whether the impugned goods fell under its ambit or not. If artificial fur cloth fell under Appendix-3A and if long piles fabric did not, it would not automatically mean that latter fell under the description "consumer goods". The coverage of the terminology "consumer goods" has been very accurately described under the Policy. For any article to satisfy the Test, the articles could be such as would be directly used it by a person. The impugned goods on description alone are industrial inputs and would require a substantial amount of processing before converting into any goods thus not even remotely qualifying for the term, "consumer goods".
12. The judgments cited by the ld. Advocate are material. In their judgement in the case of Cloth Fabric - 1993 (66) E.L.T. 441 (Tribunal), the Tribunal had held that ABC in rolls were raw materials for the manufacture of by the process of cutting. The ratio of the judgement is squarely applicable to the present case. In their judgement in the case of Parekh & Co. v. Collector of Customs, Rajkot - 1994 (71) E.L.T. 310 (Tribunal), the Tribunal had held that locks could not be used before being effected to the and it will not fall under the "consumer goods". Respectfully, following the ratio of the judgements, I hold that impugned goods were not "consumer goods" as described in Entry No. 172 in Appendix No. 2(B).
13. I have also given considerable thought to the dispute on classification of the impugned goods. At all the times in the past also, the appellants had described the goods as artificial fur cloth and had classified the same under Heading No. 6001.10. The Original Authority as well as the Appellate Authority held that the impugned goods were not artificial fur cloth but long pile fabric. Their findings did not result in any change in the classification of the impugned goods. The Collector (Appeals) in Para 4 of his order suggested that the appellants should have sought classification of the impugned goods under Heading No. 4304.00 which attracted lesser rate of duty than for the present classification. To me, the entire discussion was without any point. All that was required to be examined very carefully were the parameters of the entry restricting the importation and to determine whether the goods fell under that description or not. Since the appellants had maintained consistency in their representation as to classification the belief of both the Authorities that the appellants deliberately misclassified the goods under the Heading 6001.10 as artificial fur cloth in order to fall under Appendix-3A seems to be based on wrong appreciation of facts. Since the culpability of the appellants had not been established, there was no cause for imposition of penalty.
14. In the result, the appeal succeeds. The orders of imposition of penalty are set aside. Directions are made for consequential relief.