R.G. ENGINEERING INDUSTRIES Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THIS Appeal is directed against the Order -in -Appeal No. 2101/88 -BCH, dated 13 -5 -1988, confirming the Order -in -Original No. S/10 -202/87 -A dated 23 -12 -1987, passed by the Dy. Collector of Customs, Group A, Mumbai.

(2.) THE appellant are the L.A. Holders of the licence issued to one M/s. United Industries, Calcutta, issued under Para 111(1) of the Policy AM 85 -88. The licence, as per list attached, permitted import of various types of Ball Bearings and other items and the value limit was fixed at Rs. 1,00,000/ -. The appellants caused import of ball bearing No. 6204 to the extent of Rs. 87144/ - and sought clearance under the aforesaid Emergency Spares Licence. The same was objected to on the ground that there was a misuse of the licence, as the appellants had imported only one specific item as against several other items specified in the licence, as required for immediate replacement. The adjudication proceedings were conducted, and the clearance was refused and goods were confiscated under Section 111(d) of the Customs Act, with an option to pay a redemption fine of Rs. 1,30,000/ -. In the appeal before the Collector (Appeals), he has endorsed the view adopted by the Adjudicating Authority and has held that it was expected of the appellants to import only such of the quantity, which would be required as emergency spares, and import of one specified item virtually using the entire value limit of the licence, was not a bona fide act. He therefore felt that there did not appear to be any justification for the huge quantity import to be kept as "Emergency Spares" and the spirit and purpose of the policy has clearly been violated.

(3.) DR . N. Kantawala, the ld. Advocate, for the appellants submits that they have the licence which permits them to cause the import. There is no restriction imposed as to the quantity or value limit in relation to each of the items specified in the said licence, and therefore it is not open to the Customs Authorities to go beyond the licence and order confiscation. He has also submitted that Section 111(d) of the Customs Act, is not attracted inasmuch as the import is against the specific licence. The ld. Advocate has relied upon the decision of the Bombay High Court in the case of Lokash Chemicals v. Union of India reported in 1981 (8) E.L.T. 235, and has submitted that this remains the good law till today.