ORDER
P.K. Desai, Member (J)
1. This appeal is directed against the Order-in-Original No. S/10-155/89-II dated 22-9-1989 of the Additional Collector of Customs, Bombay, ordering confiscation of the consignment of 5030 kgs. of non-alloy steel based nickel cludded plates, vide Section 111(d) of the Customs Act, but granting option to pay fine of Rs. 50,000/- in lieu of confiscation.
2. The appellants imported the subject consignment and sought clearance for home consumption, claiming the items as importable under Open General Licence, vide Entry No. 851 of List 8 Part I of Appendix 6 of ITC Policy 1988-91. The item was importable by Actual User (Industrial). The appellants were holding provisional industrial licence for manufacture of ethyl cellulose, and the item imported was claimed to have been required for the purpose of manufacture of reactor vessel. The departmental authorities therefore felt that the item was meant for manufacture of chemical machinery, and the appellants did not possess the licence in relation thereto. On objection being raised, the appellants approached the concerned authority and obtained necessary endorsement. However, Show Cause Notice dated 29-8-1989 was served, and after receipt of reply and grant of personal hearing, the impugned order was passed, holding that the consignment was shipped on 8-6-1989, and Bill of Entry for home consumption was filed on 4-7-1989, whereas, the relevant endorsement making the appellants eligible for import, was obtained only on 10-7-1989, and as such, on the date of import, the appellants were not eligible to import the same.
3. Mr. D.H. Shah, the Ld. Advocate for the appellant contended that, reactor vessel was one of the essentials for manufacture of ethyl cellulose and that the appellants did possess licence for manufacture of the ethyl cellulose, and as the actual user, the appellants could import the subject goods. He referred to the CEGAT NRB decision in Plastics and Metals (P) Ltd. v. Collector of Customs, 1990 (47) E.L.T. 424 (Tribunal) and pleaded that, the ratio of the said decision could more forcefully stand applicable here. Mr. Shah, further stated that even otherwise, condition No. 1 of the OGL conditions, in Appx. 6 of the ITC Policy, 1988-91 required production of valid industrial licence of registration as an actual user, at the time of clearance of the goods, and submitted that Bill of Entry was filed on 4-7-1989, with a requisite industrial licence, but as some technical flaw was noticed, necessary endorsement was obtained immediately and as such, when the clearance was sought, all the required formalities had been undergone. Referring to the findings of the adjudicating authority, he submitted that even the said authority was satisfied that “the importer had broadly met the condition for OGL clearance”. In his submission, the adjudicating authority having convinced of due compliance, instead of releasing the goods, contradicting his own views, ordered confiscation. Mr. Shah also pleaded that the authority had even otherwise, made certain self-contradictory observations, indicative of non-application of mind, in due adjudication of the matter.
4. Mr. K.M. Mondal, the Ld. SDR, while supporting the order, conceded that but for the alleged non-compliance of holding requisite industrial licence, to indicate the status of actual user and manufacturer of the product, for which the subject goods were the inputs, OGL was available to them. He also admitted that the subsequent endorsement dated 10-7-1989, in the Industrial licence, even removed the obstacle which was otherwise existing. He however pleaded that the appellants, ought to have got the said endorsement made, prior to placement of order, or in any case, before the goods were shipped, whereas here, even till the goods landed and Bill of Entry for home consumption was filed, no such endorsement existed and it was only on the objection being raised, that the endorsement was got done. In his submission, condition No. 1 contemplated fulfilment of actual user condition and availability of documents in relation thereto, before the import is effected, and undisputedly the appellants did not fulfil the same at that material time. He however agreed that no imputation of mala fide could be made and as such, no penalty is also imposed. According to him, however, in strict sense of the terms, the import was unauthorised.
5. Considering the submissions made, as also the facts, which are not in dispute, the only issue for consideration is whether in the given set of circumstances, the import could be held as unauthorised. To recapitulate the facts, for better appreciation of the point discussed hereafter, the appellants are the actual user (Industrial), and at the relevant period, i.e. on the day when the subject consignment was landed on Indian shore, they held the Industrial Licence, for manufacture of Ethyl Cellulose, and the subject item was the input for reactor vessel, which was essential for manufacture of ethyl cellulose, but the industrial licence did not contain the endorsement to the effect that the appellants had also to manufacture the reactor vessel, and an objection being raised, the due endorsement thereof was obtained within a couple of days, before clearance of the imported goods.
6. The decision of the CEGAT NRB in Plastics and Metals Pvt. Ltd. v. Collector of Customs, 1990 (47) E.L.T. 424 (Tribunal) has been referred to and strongly relied upon by the appellants. In the said decision, the Tribunal examined the provisions of AM 1985-88 Policy, and observed that very narrow construction was not called for, in the beneficial provisions like OGL. In the matter under consideration by the said Bench, the appellants were SSI Unit but their certificate did not mention manufacture of dash board, and as such import of consignment of moulds for dash board was held as unauthorised, as the appellants were, by virtue of no mention in the certificate, were held as not the “Actual Users”. The Tribunal, while setting aside the said finding compared the phraseology used in entry at Serial No. 6 of Appendix 6 in the Policy Book, with those in entries at Sr. No. 16 to 18, and held that wherever the requirement for industrial licence was considered necessary, specific mention thereof was made, and as entry Sr. No. 6 (which was at issue before the Tribunal) did not specifically contain any such qualifying provisions and going by the definition of Actual User, as given in Para 7(1) of the Policy Book, they held that the item imported was meant for the importer’s own use and as such they were eligible to import as actual users, though their industrial licence did not specifically contain endorsement to that effect.
7. Usually the decision given by another Bench would be binding, more particularly when the said Bench comprised of two Members, whereas the Bench, here, as constituted, is of single member, and even otherwise, there could be no serious difference, over the ratio laid down. Here, however, the present import is during the Policy Period AM 1988-91, and there are some changes in the relevant provisions, which make the aforesaid decision as not applicable on all fours to the present case. The conditions governing imports under open general licence, are given in Appendix 6, in both the Policy Books and reading condition No. 1, in both the appendices, it appears that requirement of production of industrial licence, for the goods imported, is laid down as the condition, whereas corresponding condition in the Policy 1985-88 does not contain the same. The CEGAT NRB thus, had no occasion to consider the condition No. 1, as worded in Appx. 6, of Policy Book 1988-91.
8. It is also not possible to approve the submission that Clause 1 of the condition required production of the registration certificate or licence, at the time of clearance, and that procuring the requisite licence, within a couple of days, and before the clearance was obtained, could be taken as due compliance of the OGL condition. The words “at the time of clearance of goods”, has to be read as the stage when the Bill of Entry for home consumption is filed. Subsequent compliance, may have other favourable repercussions for the importer, cannot, as a matter of course, be read as the one, duly complying with the requirement under Policy provisions.
9. All the same, in implementing the Policy, a rational approach is always expected from the officials in charge. Section 111 of the Customs Act, while providing as to under what circumstances, the imported goods could be confiscated, invests in the authority implementing the said provision, discretion as to whether order for confiscation should or should not be passed. The discretionary powers so invested are meant to be exercised by the authority, in most judicious way, and if the authority himself is satisfied about substantial compliance, as is the case here, he ought to have exercised his discretion not to order confiscation under Section 111(d) of the Customs Act. Going by the first paragraph under the heading “finding” in the order in original, the adjudicating authority appears to have been completely satisfied with compliance of OGL conditions, but has been motivated to order confiscation, as technically the import was unauthorised. This could be the just case, where discretion statutorily given, ought to have been exercised, and confiscation need not have been ordered.
11. Thus, though not disturbing the finding that on the day the import was effected, there was non-compliance of OGL conditions, considering the surrounding circumstances, absence of mala fides, compliance of requirement immediately, as also satisfaction thereof by the adjudicating authority, I hold that the order for confiscation and consequential order to pay fine in lieu of confiscation, was not justified, and is hereby set aside.
12. The appeal is allowed in the above terms. Consequential relief to follow.