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In view of the observation of the Hon'ble High Court, we condone the delay in presentation of the appeals before the Tribunal.

2. These appeals arise out of the orders of the Collector of Customs, Madras. Since these appeals involve common issue and common pleas have been made by both the sides, these are taken up for disposal together. After having both sides operative portion of the order was announced in the open court.

3. Shri Habibula Badsha, the learned Senior Advocate for the appellants pleaded that the short point that falls for decision in the appeals is whether the goods described by the appellants as handicrafts can be allowed export. He pleaded that the appellants have filed three shipping bills for export of handicrafts made of sandal wood declaring them as handicrafts. He pleaded that the lower authority has however held that the handicrafts sought to be exported had superficial engravings of sandal wood and were not permissible for export in terms of Item 33(i) of Part A to the Schedule of Import and Export Policy for AM 1985-88 Vol. E and has disallowed the export and after administering a warning has allowed the appellants to take back the goods to the town. He pleaded that the export policy governing the export of sandal wood at the relevant time envisages that the exporters shall be required to obtain a certificate from the Regional Officer of the All India handicrafts Board to the effect that the value addition of Handicrafts made of sandal wood is a minimum of 200 per cent of the average base price of sandal wood per M.T. announced by the Development Commissioner (Handicrafts) from time to time. He pleaded that the appellants had along with the shipping bills filed necessary certificate as required under the policy. This certificate, he pleaded has been signed by the Deputy Director (Handicrafts). He pleaded that this certificate clearly sets out that value addition in respect of handicrafts sought to be exported by the appellants is minimum of 200 per cent average based on the price of sandal wood per M.T. announced by the Development Commissioner handicrafts and that the certificate is issued in pursuance of Annexure II, para 3A of the licensing policy for export of wood and timber vide serial No. 33 of Part A, Vol. II of the policy 1985-88. He further pleaded that so far as the handicrafts are concerned, in the Import Export Policy 1985-88 in Appendix 17 provides that registered exporters can export handicrafts items as detailed under General Notes in Appendix 17 under heading "HANDICRAFTS" wherein the following is set out:

He pleaded that the question of export of the goods in question has been examined by the authority in the context of the provisions relating to handicrafts in the import and export policy. He pleaded that the authorities have not considered the pleas made and has stated that no definition of handicrafts is available in the policy book. He pleaded that the exports are covered by the required certificate as per para 3A of Appendix II of the relevant policy. This certificate has been signed by the Deputy Director of Handicrafts who is the competent authority to issue this certificate. He further pleaded that this certificate clearly sets out that the goods sought to be exported are handicrafts. He pleaded that the Customs authorities who entertained doubt in regard to whether the goods were handicrafts or not examined the goods along with the said Deputy Director who again certified the same as handicrafts as seen from the order of the lower authority that the goods were inspected by the Assistant Collector (Docs) that he found the sandal wood carvings as handicrafts and referred to Annexure II, para 3A, SI. No. 33 of the import and export policy AM 1985-88. It is not the case of the Department that the Deputy Director (Handicrafts) was not the competent officer for the purpose of certifying as to whether the goods were handicrafts or not and in fact the Department had been accepting the certificates issued by the said Deputy Director all along. He pleaded that in the proceedings drawn there is no allegation in regard to the genuineness of the certificates given by the Deputy Director and in fact the certificate regarding value addition by 200 per cent has not been questioned. He pleaded that the Regional Director of Handicrafts came to be consulted by the authorities since the authorities did not apparently find the opinion of the Deputy Director on their second examination acceptable. He pleaded that the Regional Director in his opinion given on the representative samples shown to him has not in any way commented adversely on the certificate issued by the Deputy Director or has controverted about the nature of the goods. In the original orders dated 4-2-1986 and 4-6-1986 it is not stated anywhere that the goods being exported were not handicrafts and in fact his opinion as given in the certificates issued after inspection of the handicrafts as referred above, is in favour of the appellants in as much as he has accepted the fact that the sandal wood logs have been given surface ornamentation all around and that this has been done by traditional carvers of Tirupathi of Kalahasti area and also stated that these are 'hand crafted' only. He has also stated that there has been some effort on the part of the exporters to minimise labour by covering large areas of the logs with simple floral lines. He has also stated that packing is very unconvincing and that the depth of the carvings also needs to be little deeper. He pleaded that the said Directors has stated that the goods had been handi-crafted and that there is design on the wood which can be recognised as by the carvers of certain areas only and an inference that can be drawn is that a design of specific type has been engraved on the wood and therefore the item has acquired character of handicraft and once the same has been described as handicrafts, there is no other way but to describe the item as handicraft. He pleaded that in the background of the definition of Handicrafts given in the policy book as referred to above, all that is required to be shown is that the handicraft has some artistic or decorative value. He pleaded that the Regional Director has not given his findings/opinion in the context of this definition of handicraft as given in Appendix 17 of the policy book. He pleaded that whether an article has artistic value or decorative value or not, it is a matter of subjective satisfaction and that one of the experts viz. the Deputy Director has called it as handicraft, the other expert i.e. the Regional Director while calling it as hand-crafted has merely made a remark in regard to the economy of the work to the effect that the depth of the carvings should have been little deeper. He pleaded that once the work of an article can be made out as belonging to a particular school, or having been done by an artist of a particular area, it can be said that the item had artistic value. The policy merely required that the article should have some artistic or decorative value. In the present case, an inference can be drawn from the Director's report that the article had acquired some artistic value. He pleaded that the appellants filed written submission as can be seen from the Order No. S16/5/85 SIB/SIB/115/85 dated 4-2-1986 and the appellants had asked for the opinion to be taken from the experts who are carvers and also National award winners. This prayer was not granted and the Collector has merely stated as under in this regard while refusing permission :-

4. The learned DR pleaded that the opinion of the Regional Director should be preferred over that of the Deputy Director. He pleaded that the opinion of the Deputy Director should be discarded and he adopted the reasoning of the learned lower authority.

5. We observe that the question to be decided in the appeals is whether in the context of the provisions of the import and export policy in regard to handicrafts and the specific provisions in regard to export of handicrafts made of sandal wood, the appellant's prayer for setting aside the orders of the lower authority should be allowed. We observe that the policy for export of handicrafts made of sandal wood is given in Annexure II of import and export policy AM 1985-88 under heading policy for export of Wood and Timber. In this what is envisaged is that in case of export of Handicrafts made of sandal wood the exporters shall be required to obtain a certificate from the Regional Officer of the All India Handicrafts Board to the effect that the value addition of handicrafts made of sandal wood is a minimum of 200 per cent of the average base price of sandal wood per MT announced by the Development Commissioner (Handicrafts) from time to time. There is no dispute mat such a certificate signed by the Deputy Director in terms of this para has been produced. This certificate has not been questioned by the lower authority. The appellants filed shipping bills accompanied by this certificate as envisaged above. The authorities, after the goods have been entered for export conducted examination of the goods sought to be exported along with the Deputy Director, handicrafts and the examination report as set out in the order in Original dated 4-2-1986 is as under:

From the above it clearly shows that the pieces which are sought to be exported had carvings and from the carvings the Regional Director could clearly say as to the artists of which area would have done the job. Further he had gone on to say that the pieces can be said to be handicrafted. We observe that the authorities have gone to the Regional Director to get a categorical opinion from him as to whether the item can be considered as Handicrafts as envisaged in the import policy. The said Regional Director has not recorded his opinion based on parameters envisaged in the policy. He however, has entered his criticism of the nature of the work done recognising artists who might have done this work as belonging to Triupathi and Kalahsti and merely stated that the depth of the carving could have been little deeper. In this opinion nowhere he has stated that the items sought to be exported did not have any artistic or decorative value as evisaged in the definition of Handicraft as set out in the policy under the general note referred to above and based on which the lower authority had proceeded in the matter. It goes without saying that intricacy of the work done on a piece of log of sandal wood would depend upon what has been ordered for and the price it is going to fetch for the exporter. If less work is done, the exporter will get a less price and if the work done is more intricate the exporter will get higher price. But this is not to say that any body can get away with export of wood in the garb of handicrafts. To guard against such contingency, the framers of the policy have provided another parameters and i.e. the value addition. In the present case, the value addition as certified by the Director of Handicrafts as required in terms of para 3A Annexure II as referred to above is not less than 200 per cent of the value of sandal wood as fixed by the Director from time to time. There is no adverse comments in this regard either by the Regional Director or by the Ld. lower authority. This condition of value addition therefore has to be taken to have been fulfilled. The only other condition which is required to be satisfied relates to whether the item could be considered as handicraft for the purpose of export. In the show cause notice issued by the lower authority, it has been alleged as under: