ORDER
K. Gopal Hegde, Member (J)
1. All these appeals arise out of and is directed against the common order bearing No. S/10-176,213,212, and 211 /86F dated 30-12-1986 passed by the Collector of Customs, Bombay.
2. As the parties to these appeals are the same and as the appeals involve common questions of law and facts, they are clubbed together, heard together and hence this common order.
3. The facts necessary for the disposal of these appeals are :-
The appellants are a Company incorporated under the Companies Act and carry on business of manufacturing among other things metal containers. For the purposes of manufacturing tin containers, the appellants have been Importing various types of tin plates from the various countries including U.K., Spain and Brazil. There are different types of tin plates known in the international and local market. According to the appellants, the internationally known types are Type L, MR, CP, N and MC. The above type of tin plates are used in packaging industry.
4. The appellants imported TO consignments of tin plates of Prime OTS quality described in the invoices and declared in the Bs/Es as CP type. They sought clearance of the said consignments against REP licences transferred in their names in terms of Para 225 and 226 of Import Policy of 1985-88.
5. The Customs objected to the clearances on the ground that tin plates imported are MR type and that the licences were already utilised for the import of said MR type and as such the imports were unauthorised.
6. The Collector of Customs, Bombay who held the inquiry after affording personal hearing to the appellants rejected the contention of the appellants that the goods imported were CP type. He held them to be MR type. Having regard to his finding, the Collector ordered confiscation of all the 10 consignments but however allowed redemption on payment of fine of Rs. 1,90,000/-; Rs. 1,90,000/-; Rs. 57,000/-; Rs. 4,42,000/-; Rs. 70,000/-; Rs. 1,63,000/-; Rs. 1,18,000/-; and in respect of three Bs/Es which covered goods valued at Rs. 5,95,908/-; Rs. 10,42,896/-; and Rs. 12,48,537/-, the Collector directed that the said amounts should be debited in the balance available for MR type in the licences.
7. Feeling aggrieved by the order of the Collector as stated earlier, the appellants M/s. Metal Box India Ltd. have filed the above mentioned four appeals.
8. For the appellants, the learned advocate Shri R.G. Sheth made the following submissions :-
(i) The imports in question were effected on the basis of the representations made out by the Respondent Collector persuant to a Joint Weekly Meeting held on 28th June 1985 wherein it was concluded that the REP licences transferred in favour of the appellants were eligible for Import of tin plates Prime OTS quality of type other than MR type. It was also held in that Joint Weekly Meeting the value restriction of 50% is applicable only to tin plates of MR type. It was therefore submitted that having regard to the representation made on behalf of the respondent and having regard to the fact that the appellants have acted on the said representation and placed orders, the respondent Collector is estopped from objecting to the clearance. In support of this contention, reliance was placed on the decision of the Supreme Court reported in AIR 1986 Suypreme Court 806. (Popularly known as Godfrey Philips case).
(ii) The learned Collector committed an error in holding that the tin plates imported are of MR type. The learned Collector had not taken into consideration the following documentary evidence of unimpeachable character.
(a) The orders placed by the appellants with the foreign suppliers for the supply of Prime OTS quality Type “CP’
(b) The supplier’s letter dated 2nd December 1986 wherein they have stated that they have supplied tin plate Prime OTS quality Type CP.
(c) Specification sheet of British Steel Corpn. showing chemical composition of ‘Type “CP” along with other types.
(d) Chemical composition of various types of tin plates specified by Metal Box U.K.
(e) Indian Standard Specification IS 9396-1979.
(f) Draft ISI specification mentioning that CP type is different from MR type.
(iii) The learned Collector ought to have respected the Technical export evidence of Mr. K.R. Narasimhan, Head of Research Department of the Appellants Company who was associated with IST Sub-Committee on Tin plates.
(iv) The Collector was not justified in relying only on the Mill Test Certificate, Inspection Labels found on packages, ignoring the subsequent clarification given by the foreign supplier who is no other than Brazil Govt. which cannot be expected to supply false or incorrect statement to suit a Private Company in India. Shri Sheth urged that the learned Collector was unjustified in making the observation that the correction of the certificate and the amendments letter from the foreign suppliers were only to accommodate the importers. Shri Sheth urged that a foreign Govt. would not venture to correct its earlier certificate or make amendment as to the other particulars just to suit a Private , Company in India. Shri Sheth submitted that the learned Collector ought to have accepted (he subsequent certificate issued by the foreign supplier and ought to have accepted the explanation of foreign supplier.
(v) It was next contended by Shri Sheth that the Collector had relied on an importation made by Kaira Can Co. and Poysha Industrial Co. Ltd. without affording an opportunity to the appellants as to why those imports should not have been relied upon and therefore the Collector’s order is violative of the principles of natural justice.
(vi) Shri Sheth also urged that the chemical composition of MR type and CP type are different and the copper contents allowable in MR type was upto 0.20% whereas in the case of CP type it was upto 0.08%. The analysis showed that the imported goods had copper contents of 0.01 % which is a clear indication that what was imported was CP type and not MR type.
9. It was further urged by Shri Sheth that initially the Collector proceeded on the footing that there is no tin plate Prime/quality CP type or that there is no difference between CP type and MR type but contradicted himself at the end by observing that the difference between MR and CP types and marginal. Shri Sheth submitted that even on the finding of the Collector that the difference between MR and CP types being marginal, the learned Collector was not justified in imposing fine.
10. Shri Sheth also urged that by P.N. Notice dated 28-1 -1987 Appendix 17 of the policy 1985-88 was amended by substituting the words Tin plate Prime OTS quality for the words Tin plate Prime OTS Quaiity/MR type appearing in various places in the said Appendix. Shri Sheth submitted that having regard to the subsequent amendment which was only to clarify the existing position, the imposition of fine was not justified. Finally, Shri Sheth urged even if there is any ambiguity or a doubt as to the type of tin plate imported, the benefit should have been gone to the importers. He, therefore, prayed that the fines imposed may be set aside.
11. Shri Pal appearing for the Collector while supporting the order of the Collector submitted that the Interdepartmental Minutes of the Meetings are confidential in nature and they cannot be made use of. Shri Pal however submitted that there was no representation which was acted upon by the appellants and therefore there is no scope to invoke the doctrine of promissory estoppel.
12. Shri Pal further submitted the value restriction is not applied by the Customs in respect of tin plates of the types other than MR type.
13. Shri Pal further contended that the finding of the Collector that the goods imported are MR type is based on the evidence produced by the appellants, namely, M.T. certificate and the Inspection labels found on each package. Shri Pal contended that if there was to be a mistake on the specification label, that could occur only in one or two places and cannot occur uniformly. The appellants are only trying to take advantage of the subsequent letters written by the suppliers which were practically procured by the appellants. To support their contention, Shri Pal submitted that the documents of the suppliers which are admittedly after the arrival of the goods cannot be relied upon and the Learned Collector was justified in observing that those documents were furnished to accommodate the Importers.
14. It was urged by Shri Pal that there is no tin plate Prime Quality OTS/CP type. It is a fiction invented by the importers to circumvent the ITC policy. In support of his contention Shri Pal relied on the imports made from Spain.
15. Shri Pal also submitted that the contents of copper is not an determinative factor. It is the contents of the tin cutting that is relevant and the price is also determined on the basis of the tin coating. Shri Pal submitted the American Society for testing recognises only three types, namely, Type D’, Type ‘L’ and type ‘MR’. It was also the contention of Shri Pal that British Steel Corporation also recognises only three types, namely, Type ‘MR’, ‘D’ and ‘L’.
16. Shri Pal contended no other importer had at any time imported “CP” type. Even the present appellants had not earlier imported CP type. Shri Pal urged that the appellants have waived the written show cause notice and therefore they cannot be heard to say that there was denial of principles of natural justice. Even otherwise, there was no denial of principles of natural justice. The reliance of the invoices imported by other importers only lend assurance to the Collector’s finding and finding is not based on those imports.
17. Shri Pal finally submitted that Collector had taken a very lenient view and the fine imposed works out only to 10% and therefore the order of the Collector does not require any interference.
18. In reply, Shri Sheth contended that the contention of the learned SDR that the British Steel Corpn. recognises only theree types and does not recognise CP type is incorrect. He also urged that the copper contents is a determinating factor in distinguishing one type from the other.
19. We have carefully considered the submissions made on both sides. The one and the only question that arises for consideration in these appeals is whether the goods imported are of CP type as contended by the appellants or MR type as held by the Collector.
20. The appellants in all imported ten consignments. Out of 10 conisgnments, 4 consignments were imported from Brazil and 6 consignments were imported from Spain. According to the appellants, all the 10 consignments imported by them are tin plates Prime OTS quality/CP type. The finding of the Collector however was that they are “MR” type. There is no dispute between the parties that 50% value restrictions is applicable to “MR” type only. As per the statements contained in Paragraph 2 of the Collector’s order, that on examination of the goods imported from Brazil, the goods were found to be of MR type as indicated in the inspection labels found in the examined packages. No indication of type was shown in the inspection labels found in the packages of the goods imported from Spain.
21. In Paragraph 3 or the Order it was stated :
“Mill Test Certificates furnished by the party for the goods imported from Brazil indicate M.R. Type and this description shown in M.T. Certificate for the goods covered by the B/E No. 2167/46 as Tin plate Prime OTS Quality Type CP. (Original description MR. Type amended).”
22. In Paragraph 3.2 or the Order it is stated :
“M.T. Certificates for the goods imported from Spain in some certificates the goods are described as CP. Type, however, M.T. Certificate for the consignment covered vide B/E No. 2044/34 does not indicate that goods are of CP. type.
23. The other factors relied in the Collector’s order are:
(a) There is no such C.P. Type Tin Plate as per international standards and JIS Specification.
(b) The Chemical composition indicated against CP. Type compares in all respect with M.R. Type except Copper content which is 0.010% as against 0.20% in case of M.R. Type. Even in the case of M.R. Type Copper content is 0.20% maximum and since in C.P. Type is 0.010% it Is well within the prescribed parameters of M.R. Type.
(c) Goods imported from Spain, the copper content not shown at all.
(d) With the same composition and supplied by the same shippers, and imported by M/s. Metal Box India Ltd., vide B/E 2044/39 and B/E 2744/25 the goods were earlier described as M.R. Type.
(e) Same manufacturer has supplied the similar goods with same composition to M/s Kaira Can Co. and M/s Poysha Industrial Co. Ltd. as M.R. Type.
24. On the above grounds the clearance was objected as the licences are not valid to cover the value which exceeds 50% of the value of the licences.
25. The Learned Collector after referring to the submissions made during the personal hearing observed:
‘The question for consideration here is whether the goods which have been imported by M/s Metal Box are of MR. type or not. If they are MR. type, they are confiscate because there is ‘Nil’ item balance of M.R. type. The manufacturer’s original Mill Test Certificate say that the goods are MR. type. At the same time the labels which were found from the goods at the time of examination also say that the goods are M.R. type. The importers have produced an amended certificate. The letter from the suppliers say that though the goods are not M.R. type by mistake it has been shown as M.R. type but the goods are C.P. type only i.e. other than M.R. type. The question is whether the letter of the supplier can be accepted after the goods have arrived.”
The learned Collector after referring to the Mill Test Certificate and specification label found on the packages rejected the subsequent document which sought to amend the quality certificate as well as specification.
26. The above finding of the Collector would apply to the goods imported from Brazil. Those factors are not present in the goods imported from Spain. The specification labels and the quality certificate relating to the goods imported from Spain did not describe the goods as MR type. On the other hand, excepting in respect of the goods covered by B/E No. 2044734, the certificates show that they are CP type. In so far as the goods covered by B/E 2044/34, the quality certificate was silent as to the type.
27. The other reasons given by the Collector for ordering confiscation are that there is no type such as CP type. In-this connection, the learned Collector had relied on the JIS Handbook 1983 Ferrous Materials and Metallurgy Page G 3303 and also ASTM A 623-77. The Collector then relied upon the imports made by M/s. Kaira Can Co. Ltd. and M/s. Poysha Industrial Co. Ltd. and thereafter observed :
‘Therefore, I find that the original certificate given by the manufacturers is correct and the amendment which has been given later on has been only to ac-comodate the importers. I understand that there is no difference so far as value is concerned and, therefore, that cannot be taken as a distinguishing fact. However, with the difference between M.R. and C.R. types is marginal, I do not propose to take a very strict view. The fact, however, remains that the goods are not covered by the licence.”
28. From a careful scrutiny of the Collector’s order, it is clear that all his reasonings to hold the goods are MR type would apply only to the goods imported from Brazil and they have no application for the goods imported from Spain. Excepting of course that according to the Collector there is no type as CP type and also for the goods covered by B/E 2044/34, the quality certificate was silent. The Collector though initially observed that there is no such type as CP type and also of the view that CP type and MR type are the same. At the end of his order he did state that there is marginal difference between MR and CP type. The view taken by the Collector that there is no CP type though based on JIS Handbook and ASTM at the documentary evidence produced by the importers clearly shows that there is tin plate Prime OTS qualtty/CP TYPE. In the Draft Minutes of the Meeting held on 10th November 1986, a Committee of Indian Standards |nstltution desired to include the following specification :
“Base Steel Composition – The base steel shall be either MR’ or ‘CP’ or L’ Grade. The grade shall conform to the following specifications in terms of chemical composition.”
After setting out the chemical composition it was stated :
“For non-thermally processed foods MR’ type may be used and for thermally processed food ‘CP’ or ‘L’ type grade shall be used.”
The appellants have also produced photostat copy of the British Steel Corporation, while giving different types, the specification refers to Types ‘L’, ‘MR’, ‘CP’, ‘D’, ‘I-N’, ‘NR-N’ and ‘CP-N’. Having regard to the above, it is difficult to accept the view taken by the Collector and canvassed by Shri Pal that there is no tin plate Prime OTS quality of type CP. It may be that in Japan and America, CP type may not be manufactured. The goods imported by the appellants are not from America or Japan and therefore much reliance cannot be placed on the, JIS or ASTM.
29. The documentary evidence such as invoices, B/L, Quality test certificates pertaining to the goods imported from Spain all describe the goods as CP type. Just because one of the quality certificates relating to the goods covered by B/E 2044/34 does not … the type it would not be reasonable to conclude that all the consignments imported from Spain are of MR type.
30. Though the Collector may be justified in coming to the conclusion that goods imported from Brazil are MR type, he was not justified in arriving at the finding that the goods imported from Spain are also MR type. As the value restriction applies only to MR type and not to any other type and that the goods imported from Spain are not shown to be MR type by satisfactory evidence we set aside the orders of confiscation as well as fine in lieu of confiscation levied in respect of Bs/E 2044/37A, 2044/37 and 2044/34.
31. As regards the goods imported from Brazil, the Collector in our opinion was correct in holding that they are of MR type and he was also justified in not relying on the subsequent clarification given by the suppliers. If the goods were not MR type, the suppliers would not have stated the type as MR in the quality certificate and also would not have mentioned as MR type in the packing labels. It may be pointed out here that from the various documents produced by the appellants they had placed orders both for CP type as well as MR type. This is clear from the marks and numbers on packages mentioned in the invoices, B/L As a matter of fact, the order for supply of CP type bore the No. 3215, dated 23-12-1985. The appellant did not choose to produce the order bearing No. 2315A which probably related to MR type. Under Order 2315, the quantity mentioned was 1000 M.T. The proforma invoice and confirmation were for 3000 M.T. The remaining 2000 M.T. apparently related to the order 2315 A and they are for MR type.
32. The contention of Shri Sheth that the doctrine of promissory estoppel is attracted to the facts of the case is not sound. Even according to the appellants in the Jt. Weekly Meeting it was stated that value restriction is applicable to MR type. The Collector’s finding also is that value restriction is applicable to MR type. Therefore, the question of invoking the doctrine of promissory estoppel did not arise. If the Collector had held that value restriction is applicable to other types also then only there would have been some merit in the contention of Shri Sheth. There is also no merit in the contention of Shri Sheth that the foreign Govt. would not have obliged the Private Co. It is not a question of Foreign Govt. obliging. The question was to what extent the subsequent document could be relied upon. We have pointed out earlier that the appellants did place order for the supply of MR type and it is possible that the goods supplied might relate to that order. In any case we find no justifiable reason to interfere with that part of the order by which the Collector ordered confiscation of the goods imported from Brazil. We find that the fine is nominal and does not call for any further interference.
33. In the result these appeals are allowed in part. The confiscation as well as fine in lieu of confiscation ordered in respect of Bs/E 37 A, 37 and 34 are set aside. The appellants be granted consequential relief. In other respects, the Collector’s order is confirmed.