Customs, Excise and Gold Tribunal - Mumbai
Autoalarm Industries vs Collector Of Customs on 22 March, 1994
Equivalent citations: 1994(46)ECC315, 1994ECR780(TRI.-MUMBAI), 1994(73)ELT204(TRI-MUMBAI)
ORDER P.K. Desai, Member (J)
1. The appeal is directed against the Order No S/10-2056/85ACC (IV), dt. 4-1-1986 of the Collector of Customs, Air Cargo Complex, Bombay, ordering confiscation vide Section 111(d) of the Customs Act, of the consignment declared to contain Ionisation Smoke Sensor for Detectors, with an option to pay fine of Rs 85,000/- in lieu of confiscation.
2. The consignment imported was found to contain smoke detectors valued at Rs. 1,63,996/- and sensor guns valued at Rs. 5194/- and clearance thereof was claimed vide Entry No. 529 of Appx. 6 List 8 Part I of the Import Policy AM 1985-88. The department however objected to it on the ground that the subject goods were complete instrument covered under Appx. 10, Serial No. 8 of the same Policy Book, and required a specific licence for the same. Show Cause Notice proposing confiscation vide Section 111(d) of the Customs Act, therefore, was contemplated, but the appellants expressly waived the same. Personal hearing was therefore granted, where they pleaded the subject goods as not the complete instruments, as they had no built in source of powers, and that they had to be connected to the Control panel by which the signals were transmitted for detecting the presence of smoke. According to the appellants, the subject goods were components of automatic fire detection system as defined in Para 7(10) of the Policy Book and were clearly recognisable as "Sensors" falling within the OGL list and the provision of Appx. 10 of the said policy would not stand applicable. The adjudicating proceedings were conducted and the Ld Adjudication authority, referring extensively to the technical literature supplied by the manufacturer, and extracting certain paragraphs therefrom, held that the subject goods were complete units each one having a smoke chamber, oscillator, two amplifiers and voltage regulation system. He also negatived the contention that item could not be a complete unit as it had no independent power source. For the purpose of rejection of the claim of the same being a sensor, and a component, permissible under OGL, the said authority referred to McGraw Hill Dictionary of Scientific and Technical Terms, and observed that "sensor" included the device that merely sensed either absolute value or change in physical quantity, whereas the imported item had much more than that and could be identified as instrument in itself. As regards the past practice pleaded, the said authority observed that stray clearances earlier could not be taken as precedent. He therefore passed the impugned order.
3. The appellants have before commencement of the hearing of the appeal, filed an application vide Rule 23 of the CEGAT (Procedure) Rules (not separately numbered) seeking permission to produce additional evidence. The documentary evidence sought to be produced comprises of the interdepartmental correspondence in relation to the applicant's application dated. 13-12-1986 (subsequent to the subject import) for grant of an import licence, and the reply dt. 29-4-1986 from the competent authority rejecting the same with an observation that they fall under OGL, as also, some leaflets pertaining to the goods imported.
4. Production of additional evidence at the appellate stage, could be allowed, only under exceptional circumstances, and that too, if the Tribunal is of the opinion that the same could provide assistance in arriving at a correct conclusion, and that no de novo or further factual enquiry may become essential. Here, what is produced is the correspondence with the competent authority for the purpose of issuance of licence for the goods of the type of subject goods for clearance of which, there existed an objection that a specific licence was called for and the item did not fall under OGL. The said correspondence, thus may have a direct bearing on the point at issue. The leaflets produced also further explain the characteristics of the subject goods, and that would facilitate in appreciating the nature of goods imported. The correspondence cannot be doubted as fabricated as they bear official seals. In the result, the production is allowed. (It may be noted that subject to the outcome of the application for production of additional evidence, the parties were permitted to refer to those documents, during the course of their respective submissions).
4A. Shri S.D. Nankani, the Ld. Advocate for the appellants has pleaded that the only ground on which the subject goods have been denied clearance under OGL, is that they were complete instruments and has referred to the definition of the word instrument as given in McGraw Hill Dictionary of Scientific and Technical Terms, where an instrument is specified as a device for measuring and sometimes also recording and controlling the value of a quantity under observations. He has also referred to the definition of Sensor given in the same dictionary indicating the same to be a generic name for a device that senses either absolute value or a change in a physical quantity such as temperature, pressure/low rates etc. Refering to the order-in-original, the Ld. Advocate has submitted that even the adjudicating authority has not disputed the existence of a device, in the goods imported, performing the function of a sensor, but according to him, the same are self-contained units, not falling within the category of components. Referring to the catalogue and the technical literature in relation to the goods imported, the Ld. Advocate has submitted that the essential characterstics of the item indicate that it is a passive unit which detects smoke, sends signals to the control panel where the data transmitted is analysed to ascertain whether the smoke emitted calls for raising a fire alarm or just be ignored. In his submission, thus, the subject goods do not have any built up contrivance to raise any alarm. Referring to the analogy given in the order-in-original, the Ld. Advocate has pleaded that the item imported has not only to be connected with power, but also with control panel. The Ld. Advocate has then urged that because the objection was raised that subject goods required specific licence, the appellants, as regular importers of the subject item, applied to the competent authority for issue of a licence but the said authority rejected the application observing that the item fell under OGL. For this purpose, he has referred to the letter from JCC & I, Bombay dated 29-4-1986 and the connecting correspondence. Without prejudice to the aforesaid contention the Ld. Advocate has pleaded that in the past said item is permitted to be imported under OGL, and has produced the copies of the Bills of Entry, for import of the same item by the appellants themselves, and has also cited several judicial pronouncements, where no redemption fine is imposed, as in the past, such imports were being permitted. The Ld. Advocate has then pleaded that if the past practice was to be discontinued, public notice ought to have been issued to put the importers on an alert.
4B. Shri Ravinder Jain, the Ld. JDR, has, however, supported the order and has submitted that, the basic issue for consideration here, is, what is the exact nature of the item imported, and whether it remains under the category of sensor or that it is an instrument. Referring to the Bill of Entry filed for the subject import as also for the past imports, the Ld. JDR has submitted that the appellants themselves have classified the item under Customs Tariff Heading 90.24(1), and the shipment of the subject goods being made on 28-11-1985, Customs Tariff applicable would be of 1985-86, where, the said heading pertains to instrument. In his submission, if the item was taken as a component, correct classification given would have been 85.17 and when the appellants themselves classify the item under the Tariff Heading 92.24(1), there could be no scope for them to plead the item as a component for ETC provisions. He has further pleaded that description as given in the Bill of Entry is, sensors for detectors, and not the detectors. He has pleaded that the relevant OGL entry permits import of sensors/transdeucers, and not the detectors. Referring to the operational manual for the subject item, he has submitted that the item performs functions not only of sensing the smoke, but giving appropriate signals, and the contrivance of lighting a bulb in the unit clearly shows that this unit itself provides smoke signals, even without the assistance of any external control panel, and as such, the unit is a self-contained instrument. He has emphasised that, the appellants have, even in the Bill of Entry, not mentioned the item as detector, but merely a sensor, as they were aware that, but for description of the nature, the import under OGL would not have been allowed. He has pleaded that apt analogy has been given by the adjudicating authority in holding the item imported as an instrument. Referring to Para 7(10) of the Policy Book, he has pleaded that the item would not fall within the word "component". In his submission, even during the alleged previous imports, the appellants had been changing stands, as to the correct Customs Tariff Entry. The Ld. JDR has also pleaded that the correspondence with JCCI & E, subsequent to the objection raised by the Department and the reply received after the Order-in-original, may not be relevant, as it is not clear whether the said authority was made aware of the stand taken by the Customs Authority. As to the past precedence, he pleads that they relate to import by the appellant alone, and refers to Tribunal Special Bench decision reported in 1993 (64) E.L.T. 100, to plead that erroneous earlier clearances would not provide justification for the clearance of the subject goods, without any objection.
5. Shri Nankani, the Ld. Advocate, in reply, has pleaded that there is no distinction between "sensors" and "detector". He has also submitted that all the earlier clearances have been permitted under Customs Tariff Heading 85.17 by making appropriate corrections in the Bills of Entry by the Customs Authorities themselves.
6. Considering the submissions and going through the records, there does not appear any objection from the department that, the item imported performs the function of "sensors", and the only objection raised is that the same can not be taken as a component, but is an instrument by itself, and that what is permitted vide entry Sr. No 572 of Appx. 6 List 8 Part I of the Policy AM 1985-88 is only "sensors/transducers" as component by the Actual User (Industrial).
7. There is also no challange to the plea that the appellants are the Actual Users (Industrial) and even otherwise, they have produced SSI Registration Certificate, indicating their industrial activity of manufacturing Fire Alarm System.
8. The word Instrument as defined in the McGraw Hill Dictionary of Scientific and Technical Terms, in relation to Engineering Industry, reads "A device for measuring and sometimes also recording and controlling the value of quantity under observation". In the same dictionary, the term sensor has been defined as having a generic name for a device that senses either the absolute value or a change in a physical quantity such as temperature, pressure, flow rate or PH etc. and has illustrated the television cameras as also falling within the category of sensor. The said dictionary also mentions that the sensors is also known as primary detectors or sensing element.
9. The item imported is "lonization Smoke Detector". The Technical write-up produced, under the heading 'Operating Principle' (P. 118 of the Paper Book) reads thus:
"Smoke detectors utilizing the ionization principle are usually of the spot-type. An ionization smoke detector has small amount of radio-active material which ionizes the air in the sensing chambers, thus rendering it conductive and permitting a current flow through the air between two charged electrodes. This gives the sensing chamber an effective electrical conductance. When smoke particles enter the ionization area they decrease the conductance of the air by attaching themselves to the ions, causing a reduction in mobility. When the conductance is less than a predetermined level, the detector responds."
In the catalogue for the instrument under the heading "Operation" it is mentioned thus :
"The SIF-E Ionization Smoke Detector has two sampling chambers, an outer ionization chamber and an inner ionization chamber. Smoke or invisible combustion gases can freely penetrate the outer chamber, but the inner chamber is virtually closed to prevent easy entry. With both chambers ionized by radioactive source (Am 241), very small current flows in the circuit. The presence of visible smoke or invisible gases have a great influence upon the current flow in the outer chamber and will cause a change in the voltage ratio between chambers. This difference is then amplified inside the detector and transmitted to the fire alarm control unit to which it is connected.
Under the heading "Applications" in the same catalogue, it is mentioned that "The units can be connected to firm fire alarm control panel using a 2 wire loop circuit with end of line resistors or using a 4 wire loop circuit.
10. From the literature produced, which Is specific for the subject item, it is clear that the same acts merely as smoke detector and could fall within the category of sensor, permissible for import under OGL during the relevant policy period. It is however argued by the Ld. JDR that, there exists a bulb which gets activated, providing danger signal. He has thus attempted to emphasise that the unit itself is a self-contained alarm signal. It would have been possible to agree with Ld. JDR, but for the fact that, there is no indication available from the entire investigation as to whether the units imported are Model YBA-R/3 which are without lamps or Model YBC-RL/4 Hs (which are with lamps). The submission made could have been considered in details, if the specific allegations were available on record that the units were of the model with the lamp.
11. Together with this, it is also on record, that having faced an objection from the department as to validity of import under OGL, the appellant applied for grant of a licence, for import, amongst others, of this very detectors and they have been denied the licence, with an observation that items listed at Sr. Nos. 1 to 5 and 7 were under OGL. In the application for the licence, the smoke detectors - lonisation figure at Sr. No. 1 and the licence was applied for by mentioning them as falling under Entry 8 of Appx. 10 of the Policy Book 1985-88. This is evident from the correspondence produced as additional evidence, and which has been allowed to be taken on record. The objection from the department is also to the effect that the unit being an instrument, is hit by Entry Sr. No. 8 of Appx. 10 of the said policy book. When now, even the licensing authority opines the item as falling within the OGL entry, there could be no scope for taking different view. It is true that this evidence was not available before the adjudicating authority, but the same has now been accepted in evidence and can be referred to and relied upon to base the conclusion.
12. The appellants have also successfully established that these items have been cleared as OGL item in the past. With the findings as above, this aspect need not be examined in details for the purpose of alternative submission made, but the same can be looked into to ascertain that besides the characteristics indicated above, and also the view expressed by the licensing authority, even the Customs Authorities have treated the same as sensors, for the purpose of allowing them for import under OGL, in relation to at least four previous consignments.
13. The appellants' classification under TI 90.24 in the Bill of Entry, could not operate as estoppel against them, as the department have not accepted the same and have assessed them under TI 85.17.
14. When the literature produced in relation to the specific unit leads to show that they are no more than the sensors, the reasonings adopted by the Ld Adjudicating authority cannot be endorsed to hold that the units are self-contained instruments.
15. In the result, the appeal is allowed. The goods are held importable under OGL. Consequential reliefs to follow.