Customs, Excise and Gold Tribunal - Mumbai
Garware Wall Ropes Ltd. vs Commissioner Of Customs on 28 January, 1997
Equivalent citations: 1998(102)ELT504(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. M/s. Castlerock Fisheries Ltd., Mumbai, was granted an advance licence and DEEC certificate. The licence was initially for import of specified quantities of cardboard and kraft paper (other than ivory board) and high density polyethylene/polypropylene granules. The licencee was required to export a specified quantity of processed/preserved and frozen fish products, packed in packing materials made of these goods. The licence was subsequently allowed to be transferred on the ground that licencee had fulfilled its export obligation and was purchased by M/s. Garware Wall Ropes Ltd., the appellant. The licence was subsequently amended to include some other items, among them fishing nets/raw material. The value was also enhanced.
2. The appellant imported a consignment of polypropylene and claimed clearance against this licence and certificate. Notice was issued on two grounds. The first was that the goods exported were not marine products. The second was on the basis that the amendments to the licence made in 1995 were in terms of the import-export norms introduced on 1-4-1995, which permitted import of fishing nets or HDPE/polypropylene moulding powder/granules fibre grade. As the polypropylene was declared by its manufacturer to be tape grade, the goods did not tally with the licence and the certificate. The notice also proposed to deny the benefit of Notification 204/92-Cus., dated 19-5-1995. After considering the cause shown and hearing the appellant, the Commissioner passed his order. In that order, he dropped the first charge, but found against the appellant on the second holding that the benefit of Notification 204/92-Cus. was not available. Hence this appeal.
3. The reasoning in the Commissioner's order is that the grade of polypropylene imported LY 6100 can, according to its manufacturer be used to produce carpet backing tape and hence it cannot be used to manufacture fishing nets. Entry 21 of the import export norms in the policy permitted import of fibre grade of polypropylene. The goods are not fibre grade. Therefore condition (i) of Notification 204/92 requiring that the material imported are to be covered by the DEEC certificate issued by the licensing authority in respect of the value, quantity, description, quality and technical characteristic is not satisfied. Hence the benefit of the notification will not be applicable. In the reply to the notice, the importer had relied upon a certificate of the manufacturer and supplier of that the polypropylene can be used to manufacture fishing nets also, and a certificate from the Indian Institute of Technology, Mumbai to the same effect. This certificate issued by the Head of the Department of Chemical Engineering first describes the technical values of the polypropylene LY 6100; it then says "The above values tally with the designation BP-HY-95 030 of the Indian Standard No. 10951 - 1984, which is used for films. However, this material can be used for manufacture of fibres/yarn/filament etc. which can be used for fishing nets."
4. The Departmental Representative's contention that the certificates should not be relied upon because they have been given by interested parties, [citing the decision of the Supreme Court in Novopan India v. CCE -1994 (73) E.L.T. 769 in support], may, if at all, apply to the certificate issued by the manufacturer. We do not see, however, that the Indian Institute of Technology is an interested party. It is an academic institution of high repute, and a certificate issued by a head of a department of that institution would have to be considered as an impartial and expert expression of view, in the absence of any evidence to show that it has been biased, or that the signatory is not sufficiently qualified. The Departmental Representative relied upon the extracts from the book Plastic Materials edited by J.A. Brydson, published by Butterworth Heinemann. We are, however, not able to find in this book anything to support the contention that the imported material cannot be used to make fishing nets. In the portion dealing with the application of polypropylene pages 256-258 and 872-873 there is no material to show that the polypropylene of grade LY 6100 which is described by the manufacturer as a medium flow homopolymer with a conventional molecular weight distribution and is formulated with a general purpose additive package cannot be used to make nets. We are, therefore satisfied that there is no material to show that it cannot be used to make nets.
5. There is another aspect. The licence was issued in 1993 and amended incorporating the new products and enhanced value in 1995. The licence was also revalidated. The other conditions remained unchanged. One of the conditions in the licence is that it shall be subject to the conditions in force, as described in the relevant Import Trade Control Policy Book or any amendment upto and including the date of the licence. On the date of issue of the licence, the import-export norms prevailing did not mention polypropylene of fibre grade. In the absence of anything to this effect, the view of the Commissioner and the contention of the Departmental Representative, that the norms specified in the policy in force in 1995 must be applied cannot be accepted. It would have been a different matter if the amended licence had incorporated such a condition. It did not do so and we cannot presume that this condition was intended to be incorporated. On the contrary, the fact that the licence was changed in some respects by the amendment but the policy applicable was not changed would show that it was the intention not to apply the amended policy to this licence.
6. There is yet another aspect of the matter. The licence itself did not specify any particular grade of polypropylene. The Director General of Foreign Trade has full discretion to issue licences which are not in conformity with the policy and thus not to apply the norms prescribed in the import-export output norms prescribed in the original norms. It is not therefore mandatory at every licence be strictly in accordance with the norms or other terms of the policy. As has been held in Lokash Chemicals v. Collector 1991 (8) E.L.T. 235 it is not permissible for the Customs to go beyond the terms of the licence. In such a situation, the licence cannot be considered invalid because it did not follow the norms. This view has been reiterated by this Tribunal in its decisions [see Collector of Customs v. Carpet House -1996 (88) E.L.T. 433].
7. The licence therefore was valid for import. The DEEC certificate and the advance licence cannot contain different specifications for a commodity import of which would governed by both these documents. The two go hand in hand and the scheme would not be workable if different criteria are applied to the licence and the certificate. It is to be noted that both are issued by the licensing authority. Since the licence was valid to cover the import of the goods, the DEEC certificate which contains the identical specifications, quantity etc. as in the licence, would be equally valid, and would cover the goods for the purposes of exemption.
8. Appeal allowed. Impugned order set aside.