ORDER
P.K. Desai, Member
1. This appeal is directed against the order-in-Appeal No. 382/86 BCH dated 18.8.1986 of the Collector of Customs (Appeals), Bombay, confirming the Order-in-Original No. S/10-100/83 13 dated 20.10.1983 of the Dv. Collector of Customs, Bombay ordering, vide Section 111(d) of the Customs Act, 1962, confiscation of a consignment of Italian marble, but granting option to the appellants to pay fine of Rs.78,000/- in lieu of confiscation.
2. The appellant imported the items referred to above, of c.i.f. value of Rs.78,296, and sought clearance thereof under OGL as per Appendix 10(1) of the Policy Book AM 83-84. At the time of seeking clearance, they also produced a copy of Provisional SSI Registration Certificate, dated 1.8.1984 showing their proposed manufacturing activity as processing and finishing of marble. The letter of credit for the said import was opened on 28.2.1984. However as neither on 28.2.1984 nor on 29.6.1984, when the shipment was effected, [did] the appellants possess any registration certificate, it was felt that benefit of Para 20 of Appendix 10 of Policy Book AM 84 was not available to the appellants. It was also felt that since marble was placed in Appendix 3, Part A, at Sr.No. 225 in the Policy Book AM 1984-85, and since the appellants did not possess any valid licence for the import, the import was unauthorised. On issue of show cause notice dated 12.9.1984, the appellants pleaded that facility under Para 20 of the App.10 of AM 84 Policy Book, was available to all the persons, who were the actual users and that vide para 21 of the said Appendix, they were required to produce industrial licence only at the time of clearance, which they had already done. On adjudication, however, the plea raised by the appellants was not accepted and the impugned order was passed, which stood confirmed in appeal before the Collector (Appeals).
3. Mr. Shyam Divan, the Id. Advocate for the appellants has pleaded that with opening of letter of credit on 28.2.1984 the appellants would stand covered by the Policy provisions of AM 83-84. He has also submitted that the registration certificate has already been-obtained before the clearance of the goods, and referring to para 21 of the Appx.10 in the Policy Book AM 83-84, he pleads that the policy provisions require production of such certificate only at the time of clearance and not earlier, and has referred to the order of the South Regional Bench of this Tribunal in Jain Silk Traders v. Collector of Customs, (wrongly “printed as 1987 (31) ELT 937 in the Journal). The Id. Advocate has then referred to para 5(3) of the Policy Book AM 83-84, and has pleaded that the appellants fall within the category of Actual Users–Industrial, and that the shipment of the consignment having taken place before 30.6.1984, the import is fairly protected vide para 20 of App.10 of the concerned Policy Book. The Id. Advocate has also pleaded that though the registration certificate has been endorsed as provisional, the same could not affect the import, and has referred to the provisions relating to “Proposed Unit” contained in Para 45 of the relevant Policy Book. In his submissions, OGL provisions are beneficial provision, and they ought to be rationally construed to the advantage of the genuine importers and the appellants having duly established their genuineness by using the imported item for their own manufacturing purpose, the order passed ought to be set aside, and in any case, redemption fine of 100% c.i.f. value is unwarranted.
4. Mr. R. Jain, the Id. JDR has, however emphasized that marble has been placed in Appx.3, Part A of Policy Book AM 84-85, and has been thus put in the category of restricted items, and as such, on the date of import, it was not an OGL item. He has further pleaded that the appellants had not even applied for registration certificate at the time of opening the letter of credit and as such, they were not the actual users at that time. In his submission, para 45 of the Policy Book AM 84 does contemplate existence of the status of Actual user–Industrial, at the time of placement of the order. Drawing attention to the registration certificate, the Id. JDR has pleaded that besides that being a provisional one, it even does not specify the site for the factory to be established, and that even the appellants were for quite some time, uncertain about the site. In his submission:, when the shipment was effected, even that registration certificate was not issued and as such, at the time of shipment also the appellants were not the actual Users
— Industrial. In his submissions, therefore, the import was unauthorised.
5. Mr. Shyam Divan, the Id. Advocate has, in reply, stated that at no stage genuineness of the registration certificate has been doubted.
6. Before considering the submissions, certain relevant dates may be identified. The letter of credit is opened on 28.2.1984. Shipment of the goods is effected on 29.6.1984. The date of landing is not available, but the bill of entry for home consumption is submitted on 3.8.1984, and it is stated that the goods had arrived before that date. The appellants initially applied on 19.6.1984, for issue of SSI Registration certificate for a premises in Bombay. However, they submitted another application on 10.7.1984 for issue of SSI registration certificate for the premises at Paithan in Aurangabad, and the certificate for that premises was issued on 1.8.1984.
7. At no time prior to this, the appellants held any SSI Registration certificate for their manufacturing activity in relation to marble.
8. The main thrust of the submission of the Id. Advocate for the appellants is that on the date they filed the bill of entry, they did possess valid SSI Registration, which though issued as provisional, was available to legalise the import, in his submission, because of opening of letter of credit on 28.2.1984, and shipment having been effected on 24.6.1984, they stood governed by the provisions of AM 83-84 policy, as laid down in Para 20 of App.10 of the concerned Policy Book and para 21 of the said Appendix required production of such certificate at the time of clearance only. Reliance is placed on the Tribunal judgment in Jain Silk Mills v. Collector (supra).
9. The issue to be determined is whether the provisions of para 21 of App.10 of the Policy Book AM 83-84 would stand attracted at all. The decision cited as also three other decisions of the Tribunal in
Quz Forwarding v. Collector 1983 ELT 2019 (Tri), Birla Institute of Technology v. Collector, and M/s. India Infusion Ltd. v. Collector 1994 (1) ELT 231 (Tri) relate to grant of exemption from duty under specific notification issued, requiring compliance with certain procedural’ formalities before a vailment of benefit of duty exemption. Here however, as is discussed hereinafter, the issue is, whether the import itself is legal and valid.
10. The appellants have sought clearance of the imported goods, as raw material for their manufacturing activity, vide App.10(l) of the Policy Book, AM 83-84 which permits under Open General Licence, import of raw material, components and consumables other than those appearing in Appendices 3, 4, 5, 8,9 and 15 of the said Policy Book and the parties made eligible for such imports are shown as Actual Users–Industrial. Para 5(3) of the said Policy Book defines Actual User–Industrial, as such undertaking engaged in the manufacture of goods, “for which it holds a licence or registration certificate from the appropriate authority whenever applicable”.
11. Para 20 of the conditions governing import under Open General Licence incorporated in App.10 of the Policy Book reads thus:
In the case of raw materials, components, consumables permissible for import under OGL by Actual Users (Industrial) vide items 1 and 2 above, the eligible Actual Users may be allowed to effect shipment upto 30th June, 1984 against firm orders for which irrevocable letters of credit are opened and established on or before 29.2.1984. This facility will also be available in the case of raw materials allowed for import under OGL by all persons, where the importer is Actual User (Industrial) and imports the goods for use in his factory with ‘Actual User’ condition.
Reading of the said condition clearly indicates that the facility is extended to the Actual User (Industrial) who has opened the letter of credit before the specified date.
12. Considering the factual position here, the Registration certificate has been issued only on 1.8.1984 and the same is issued in pursuance of an application made on 10.7.1984. Even the earlier application for issue of such certificate for a premises in Bombay is dated 19.6.1984. Thus on the date of placement . of the order or opening of the letter of credit, the appellants were not falling within the category of Actual users (Industrial). They had also not acquired the said status even at the time of shipment of goods which took place on 29.6.1984. Thus, the placement of an order and opening of the letter of credit was by the party who at that relevant time were not the Actual Users (Industrial), and the shipment of the goods was also for the persons who were at that time, not the Actual Users (Industrial), and with this being the position the benefit of Para 21 of the conditions in App.10, would not stand attracted.
13. The appellants attempted to invoke the provisions of Para 45 of the Policy Book AM 83-84 by pleading that they were the proposed unit. Notwithstanding anything else, for being a proposed unit, as contemplated under the said provisions, they ought to have the registration certificate or licence, and also the certificate from the Sponsoring Authority. The appellants did not have anything of that, during the said policy period and if they have acquired the same during the subsequent policy period, the provisions of that policy period and not of the earlier one would stand applicable.
14. During the subsequent policy period, namely April-March, 1984-85, the item marble figured at Sr.No. 225 of App.3, Part A of the Policy Book AM 84-85 and was not eligible for import under Open General Licence.
15. The appellants thus, being not the Actual Users (Industrial) during the Policy period, 1983-84 were not eligible to cause the import of marble as raw material vide App.10(1) of the Policy Book AM 84 and were also not eligible to protection vide para 20 of the conditions for import incorporated in App.10. The import of marble under OGL was not permissible under Policy AM 84-85.
16. The authority below was under the circumstances, correct in not permitting the clearance under OGL, and order confiscating the goods vide Section 111(d) of the Customs Act, is justified and calls for no interference.
17. All the same, the appellants have subsequently procurred the requisite registration certificate, and have produced the same at the time of clearance. Though para 21 of the conditions for import laid down in App.10 of the Policy Book AM 84 may not stand attracted, the procurement and production of such Registration certificate indicate bona fide on their part and as such, even the adjudicating authority has not imposed any personal penalty. The authority below has however put 100% fine in lieu of confiscation, which however, appears excessive, in view of the fact, that but for the circumstances, they would have been able to import legitimately. In that view of the matter, the fine in lieu of confiscation is reduced from Rs.78,000/- to Rs.39,000/-.
18. In the result, the appeal is partly allowed, and order of the authority below is modified to the extent of reducing the fine in lieu of confiscation of Rs.39,000/-. Consequent reliefs to follow.