ORDER
K. Gopal Hegde, Member (J)
1. The revision application filed before the Government of India against the order-in-appeal bearing No. S/49-699/79-Air, dated 28th January, 1980, passed” by the . Appellate Collector of Customs, Bombay statutorily stood transferred to the Tribunal for being heard as an appeal.
2. The appellants M/s. Mangalore Chemicals & Fertilizers Ltd. imported one package containing Cumbria Kit, Peripheral Seal Kit and Valve Gland Kit and sought clearance under OGL under App. 10(4) of the Import Policy AM 79 as spare parts of machinery. The customs after examination objected to the clearance on the ground that the goods imported are not spares and, therefore, not permissible to import under OGL. The Asstt. Collector of Customs who adjudged the confiscation after affording personal hearing ordered confiscation but allowed redemption on payment of fine of Rs. 12,000/-.
3. Feeling aggrieved by the order, the appellants herein preferred an appeal before the Collector (Appeals) unsuccessfully. Hence this appeal.
4. During the hearing of this appeal Shri Gandhi vehementally urged that the Asstt. Collector and the Appellate Collector committed an error in holding that the goods imported are not spares. He urged the goods imported were required for the maintenance of the capital assets. Therefore, they have to be treated as spares. In this connection Shri Gandhi referred to para 204 of the Handbook of Import and Export Procedures 1978-79 (for short Hand Book). He referred to sub-para (3) of para 204 which reads “Actual Users (Industrial) would require spares for operating and maintaining their production assets, i.e., their “captive needs”. The remaining part of the sub-para is not relevant for our purpose. Shri Gandhi submitted that the goods imported are not raw materials, components, consumables. Therefore, on the basis of process of elimination same has to be treated as spares. Shri Gandhi then referred to sub-para (5) of para 204 of the Hand Book. This sub-para reads “Appendices 3 and 5 do not refer to spares anywhere; but, some entries therein refer to components, consumable, sub-assemblies or modules, however, described. Where an item does not appear individually (elsewhere) in these appendices i.e., in its own name, it could be imported as a permissible spare (under Chapter 9 of the Policy Book) by the eligible Actual User”. Shri Gandhi then referred to Chapter 6 wherein the policy is laid with regard to import of raw materials, components, consumables and spares by Actual User (Industrial). Para 22 on which Shri Gandhi relied reads “the requirements of Actual Users (Industrial) in the matter of raw materials, components, consumables and spares (other than those for computer systems) will be met through the system of (i) Open General Licences, (ii) automatic and supplementary Licensing set down in this Chapter, and (iii) allotment through canalising agencies as provided in Chapter 10”. Shri Gandhi urged that if one reads between lines it will be clear that the policy intended to permit import of goods like the goods imported by the appellants and as such, the authorities below are unjustified in ordering confiscation and imposing fine in lieu of confiscation. It was also urged by Shri Gandhi during the adjudication proceedings, licence was also produced but then the adjudicating authority held that that licence was not valid for the goods imported. But all the same licence was debited for the value of the goods. When questioned by Bench as to whether the appellants had taken any plea either before the Appellate Collector or in their revision application that the adjudicating authority was not correct in holding that the licence was not valid or that having held that the licence was not valid, it was not justified in debiting the value. Shri Gandhi conceded that no such contention had been taken.
5. Shri Pal appearing for the Collector submitted that expression ‘spares’ is defined in the Policy. It means a part for substitution, i.e., ready to replace an identical part if it becomes faulty or worn out. Admittedly the goods imported would not satisfy this definition. It is not a part at all. Shri Pal then referred to the averment contained in the revision application wherein the appellants have stated that the goods imported contained consumables and small tiny tools. Shri Pal submitted that having regard to the clear admission that the goods imported are consumables, it is not open to the appellants to turn round and contend that what they have imported are spares. Shri Pal further submitted that the clearance was sought under OGL Appendix 10(4). But then Appendix 10(4) does not permit import of consumables. As per the policy consumables can be imported only by research and development units and other institutions mentioned against Appendix 10(5). Shri Pal then referred to conditions (1) and (2) governing the import under OGL. Shri Pal particularly referred to conditions (1) and (2) and condition (2) was specific that consumables cannot be imported under OGL. Shri Pal, therefore, submitted that there is no merit in the appeal and the same may be rejected.
6. In reply, Shri Gandhi submitted that though the appellants have used the expression ‘consumables’ in their appeal, it was used in a loose sense and not in the sense that expression was defined in the policy. Shri Gandhi submitted that the goods imported do not participate or is required in the manufacturing process and it does not form part of the end product and, therefore, it cannot be treated as consumables within the meaning of that expression given in the policy.
7. I have carefully considered the submissions made on both the sides and perused the records of the case. The short question for consideration in this appeal is whether the goods imported by the appellants are spares permissible for import under OGL Appendix 10(4). Under Appendix 10(4) of the Policy AM 79 Actual Users (Industrial and Non-Industrial) are eligible to import permissible spares (i.e. spares other than those included in Appendices 3 and 5).
8. The expression ‘spare’ is defined in the policy. It means a part for substitution, i.e. ready to replace an identical part if it becomes faulty or worn out. Shri Gandhi conceded that the goods imported by the appellants would not satisfy this definition. Shri Gandhi requires that the wider meaning should be given to the expression ‘spares’. His contention was anything which is useful for maintenance of the plant should be treated as a spare. It is rather difficult to accept this contention of Shri Gandhi. When a statute defines an expression unless the context otherwise requires that definition has to be applied in construing the other provisions of the statute where that expression appears. The expression ‘spare’ is defined in the policy. Normally that definition governs in the interpretation of the other provisions of the policy. It is not merely the definition that was given in the policy, but the policy with regard to the spares is also laid down in Chapter 9. Para 54 enumerates the spares which are permitted to be imported by Atual Users both Industrial and Non-Industrial. As per the said para they will be permitted to import under OGL permissible spares, i.e. all those parts required as spares, other than the items appearing in the banned list or the restricted list and which are required by them for maintenance of all capital goods including accessories, ancilliary equipments, control and laboratory equipments and safety appliances, installed or in use by them as on 1.4.1978. This Chapter 9 also provides for grant of licence for import of spares even non-permissible spares. The elucidation of the policy is given in Chapter 9 of the Hand Book. Para 204(1) allows import of a part as a component, spare or an accessory depends upon the nature of use/ requirement. In the said paragraph it is stated ‘this word appears accordingly in the connected definition of components, spares and accessories”. The sub-para (3) of this para on which Shri Gandhi relied makes it clear that the spare should be a part. What has been imported cannot be considered as a part of the plant or machinery and, therefore, the contention of Shri Gandhi that the imported goods are required for maintenance and, therefore, they should be treated as spares is rather difficult to accept. Reference to sub-para (5) of para 204 of the Hand Book by Shri Gandhi has no relevance at all. That sub-para only provides if spares are not specifically included in Appendices 3 and 5, it could be imported as a permissible spare. The import is not a pursuance of any licence granted. Therefore, there is no scope to invoke Appendices 3 and 5. Though I accept Shri Gandhi’s contention that the goods imported could not be “consumables” within the meaning of that expression given in the policy. I am unable to accept his contention that the goods qualify as spares within the meaning of that expression or the spare permitted to be imported under OGL. I, therefore, see no merit in this appeal and accordingly 1 reject the same.