COMMISSIONER OF CUSTOMS Vs. FORWARD LEATHER CO.

JUDGEMENT

(1.) This appeal filed by the Revenue is against an order passed by the Commissioner of Customs (Appeals) setting aside an order of the original authority confiscating certain quantity of 'Heelgrip Goat Suede Lining Leather' under Section 113 of the Customs Act with option for redemption thereof against payment of fine of Rs. 18,000/ - and imposing a penalty of Rs. 2,000/ - on the respondents under Section 114 of the Act. The original authority had taken the view that the respondents' export consignment of 'Heelgrip Goat Suede Lining Leather' required a specific licence in terms of Sl. No. 10(VII) (2) of Para 159 of the Export and Import Policy 1992 -97. As the export of the goods was attempted without licence, the said authority ordered confiscation of the goods and imposed penalty on the exporter as above. In the appeal filed by the party against the order of the original authority, the Commissioner (Appeals) took note of ITC (HS) Code 4102 and applied the same to the subject goods. As per this entry/code, 'finished leather, all kinds' were freely exportable subject to two conditions viz. (a) goods to be covered by the definition of "finished leather" notified by DGFT from time to time, and (b) exporter to be registered with the Council for Leather Exports. Ld. Commissioner (Appeals) found that the subject goods were covered by the description 'finished leather, all kinds' under ITC (HS) Code 4102. With reference to Para 159 of the EXIM Policy invoked by the original authority, Id. Commissioner (Appeals) observed that Sl. No. 10 (VII) (2) of said para was not relevant. These findings of the lower appellate authority are under challenge in the present appeal.

(2.) Elaborating the grounds of the appeal, Id. DR submits that, on the date (7 -12 -96) of export, Para 162 of the EXIM Policy 1992 -97 had stood deleted and consequently there were no items which could be "exported without licence subject to conditions" and ETC Public Notice No. 3/92 -97, dated 27 -5 -1992, issued by the Chief Controller of Imports and Exports, for purposes of the entry "finished leather, all kinds" under Para 162 ibid, was of no legal effect. According to the definition of "finished leather, all kinds" as given in the above Public Notice, 'Heelgrip Goat Suede Lining Leather' was also covered by the description "finished leathers, all kinds". In the absence of Para 162, the Public Notice issued for purposes of the said para was otiose and the definition of "finished leathers, all kinds" laid down in the said notice had no legal effect. Ld. DR, however, has no case that the goods in question is not finished leather. His argument is that the goods, at the material time, was covered by the specific entry ITC (HS) Code 4104, as per which lining leathers namely "lining suede from goat/kid/lamb/ sheep skins" were restricted items and any export thereof was permissible only under a licence. It is the DR's contention that, where the goods are covered apparently by two entries, one general and the other specific, the coverage under the specific entry should prevail. Ld. Counsel opposes these arguments and submits that, as per the EXIM Policy, those lining leathers which were processed in the manner laid down by the DGFT from time to time were to be included within the definition of "finished leathers". The lining leather sought to be exported by the respondents had undergone all the processes listed under Sl. No. 2(ii) under the sub -heading "Lining Leathers" in the Table annexed to ETC Public Notice No. 3/92 -97, dated 27 -5 -1992 and hence fell within the ambit of the definition of "finished leathers". The goods thus fell for the benefit of ITC (HS) Code 4102 and hence were freely exportable. Both the conditions stipulated for the purpose were satisfied. It is further pointed out by the Counsel that none of the authorities below has found that any of the conditions laid down under ITC (HS) Code 4102 was not fulfilled by the respondents. Referring to the DR's argument based on the deletion of Para 162 of the EXIM Policy, Id. Counsel submils that even after such deletion the Department and the DGFT have proceeded, in relation to similar exports, in the same manner and the definition of "finished leather" laid down by the DGFT from time to time has always been acted upon by Customs authorities, in the instant case, admittedly, the goods are covered by the description 'finished leather, all kinds' and the conditions attached thereto were satisfied. Ld. Counsel, therefore, prays for the benefit of ITC (HS) Code 4102 in respect of the subject goods.

(3.) We have considered the rival submissions. There is no dispute of the fact that the subject goods conformed to the description 'finished leather, all kinds'. The main argument advanced by the DR is based on the deletion of Para 162 of the EXIM Policy 1992 -97. He wants to have the goods placed under Para 159. Even if it be assumed that Para 159 is relevant, the appellant has to establish that this para, at the relevant time, provided an entry which exclusively covered finished leathers. The DR has sought to classify the goods under Sl. No. 10 (VII) (2) in the Table annexed to Para 159 ibid. Item No. 10 is captioned 'Hides and Skins'. Some of the sub -items are various animal skins and some others are various leathers. The scheme of Item No. 10 makes it clear that it encompasses both finished and raw/unfinished leathers. The specific item canvassed by the DR reads "lining leathers namely, lining suede from goat, kid, lamb and sheep skins". We are unable to read this entry to mean "finished leathers processed from goat skin, etc." inasmuch as there is a specific entry for "finished leathers, all kinds" vide Code 4102 ibid, in the instant case, the goods are, admittedly, finished leathers and there is no specific entry for such goods under Para 159. Hence, as rightly held by Id. Commissioner (Appeals), Para 159 is irrelevant to the subject goods. One has, then, to fall back on Para 162 and the Public Notice relevant thereto. There cannot be any void in the EXIM Policy. Counsel has claimed that the Customs authorities and the DGFT have acted in terms of Para 162 even after deletion thereof. This claim has not been dislodged before us.