ORIENT LITHO PRESS Vs. COLLECTOR OF CUSTOMS MADRAS

JUDGEMENT

(1.) THE Order of the Court is as follows :- This Writ Petition coming on for hearing on Monday the 29th and Tuesday the 30th days of November 1993 upon perusing the petition and the affidavit filed in support thereof the order of the High Court dated 29-7-1988 and made herein and the counter and reply affidavits filed herein and the records relating to the order in C-3/1128/85 in Appeal M. Cus. 42/86 dated 9-1-1986 on the file of the first respondent comprised in the return of the respondents to the writ made by the High Court, and upon hearing the arguments of Mr. S. Ramasubramaniam Advocate for the petitioner, and of Mr. K. Illias Ali additional Central Government Standing Counsel on behalf of the respondents and having stood over for consideration till this day the court made the following order :- THE petitioner is a partnership firm carrying on business in printing and publishing. As part of its extension programme, it intended to import colour offset printing machine with pre-press register system and other such technically advanced accessories and the Import Export Policy. THE above proposal for a new project was submitted to the third respondent so that the machinery can be imported under the scheme "project Import". If the proposal is approved the petitioner can avail of concessional rate of Customs duty under the Customs Tariff Act, 1975. THE relevant entry is Tariff Item 84. 66. THE third respondent had recommended the import of the said machinery alongwith a small quantity of graphic art films in various sizes, the graphic art films were required to test the machinery to see whether they were in order. Under the policy the importer is to register the contract of the import with the appropriate Customs House. THE Petitioner approached the second respondent for such registration. Since the graphic art film had reached India earlier, the petitioner requested the second respondent to register the contract with reference to the graphic art films to the value of Rs. 1, 02, 612. 40. However, by an order dated 23-12-1985 the second respondent rejected the request, since, according to him the graphic art films were not raw materials or consumable stores, essential for the maintenance of the project material. THEreafter all the goods had arrived at the Madras Port and the petitioner contended that graphic art films formed part of machinery. However, by an order dated 9-1-1986 , the first respondent had also rejected the appeal. THE Writ Petition is for the issue of a writ of mandamus to quash the order of the first respondent dated 9-1-1986 and to direct the second respondent to register the contract with reference to the import of the graphic art films. THE goods were permitted to be imported by an interim order of this court dated 3-3-1989 on furnishing of the Bank Guarantee for 50% of the disputed amount.

(2.) IN the counter affidavit filed by the respondents 1 and 2 it is pointed out that the petitioner wanted registration in respect of five items of machinery and the fifth item related only to graphic art films in various sizes. The dispute in this case relates only to the graphic art films. It is admitted that the third respondent had issued a certificate on 1-11-1985 recommending the benefit of "project Import" for all the above items. Respondents 1 and 2 have rejected the claim of the petitioner for registration of the graphic art film under the "project Import" Scheme on the ground that the Tariff Heading 84. 66 (i) (d) permits raw-materials for manufacture of items mentioned therein whereas graphic art films are meant for the end-products. Similarly, Tariff Heading 84. 66 (ii) also will not apply because this heading permits all spare parts and other raw materials or consumable stores imported as a part of the contract subject to 10% of the total value. The emphasis is laid by the respondents in respect of Tariff heading 84. 66 (ii) by stating that only if the spare parts and consumable stores are recommended for the maintenance of the Plant/project such goods are permitted to be imported under the heading. The contention is that graphic art films is actually used for the purpose of manufacturing final products and not for the maintenance of the plant. IN other words, the respondents contend that the impugned orders are perfectly legal and valid.