ORDER
P.K. Kapoor, Member (T)
1. This is an appeal against the order passed by the Additional Collector of Customs, Kandla. The appellants imported two consignments of Rubber Tyres with tubes and flaps. They sought the clearance of the tyres under O.G.L. Sr. No. 46 of Appendix 6 of Import Export Policy 1990-93 and tubes and flaps under O.G.L. Sr. No. I(4) of Appendix 6 of the said, policy. The assessment of the tyres was claimed at the concessional rate of duty in terms of Notification No. 185/88. They also claimed that the imported tubes and flaps were of rim size 7.0″ and 7.5″ and attracted additional duty at the rate of Rs. 46/- per tube and flap in terms of Notification No. 35/90-C.E., dated 20-3-1990. In the impugned order the Additional Collector held that appellants not being Actual Users they were not entitled to import tubes and flaps under O.G.L. in terms of Sr. No. I(4) of Appendix 6 of the Import Policy 1990-93. He, therefore, held that the tubes and flaps in question had been imported in contravention of Section 3(2) of the Import and Export (Control) Act and ordered their confiscation under Section 111(d) of the Customs Act. The appellants were, however, given the option to redeem the confiscated tubes and flaps on payment of a fine of Rs. 1,00,000/-. The Additional Collector also rejected the appellants’ contention that the rim size of the imported tubes and flaps has to be taken as their widths i.e. 7.0″ and 7.5″ respectively and they were covered by Sr. No. 11(a)(ii) of the table annexed to the Notification No. 35/90-C.E., dated 20-3-1990 attracting additional duty @ Rs. 46/- per tube. He held that rim size of any tubes/flap being its diameter the tubes in question were chargeable to additional duty @ Rs. 115/- per tube in terms of Sr. No. 11(b) of the said notification.
2. Appearing on behalf of the appellants, Shri J.S. Sinha, Learned Advocate, stated that the Additional Collector had erred in holding that the appellants were not Actual Users (Non-Industrial) in term of Appendix 6, Sr. No. 1(4) of the Import and Export Policy, 1990-93 for the import of tubes and flaps. He submitted that the appellants being an apex body of bus and truck operators and associations of owners of vehicles, fleet operators and their cooperative societies were permitted to import tyres under O.G.L. in terms of Appendix 6, Sr. No. 46 and at concessional rate of duty under Notification No. 185/88-Cus. on the strength of Government of India letter No. 2(23) /88-LR, dated 24-4-1990. He contended that under these circumstances the Additional Collector’s order denying the clearance of spares of tyres viz., tubes and flaps under O.G.L. in terms of Appendix 6, Sr. No. 1(4) of the Import Policy 1990-93 was not justified. He submitted that the Additional Collector had also erred in holding that for the purposes of determining the additional duty leviable on the imported tubes and flaps in terms of Notification No. 35/90-C.E. dated 20-3-1990, the rim size of the tube has to be taken as its diameter. He referred to the copy of an extract from the catalogue of the Chinese Tyre Manufacturer and also the catalogue of M/s. Apollo Tyres and stated rim size in respect of the tyres of size 9.00-20 and 10.00-20 has to be treated as 7.0″ and 7.5″ respectively. He contended that under these circumstances the Additional Collector’s finding that the rim sizes of the tyres in question has to be deemed as 20″ and above. On these grounds, he pleaded that the impugned order may be set aside.
3. On behalf of the respondents, Shri Sharad Bhansali, the learned SDR stated that the appellants were correctly held as not being entitled to import tubes and flaps under O.G.L. in terms of Appendix 6, Sr. No. 1(4) since they did not fall in the category of ‘Actual User’. He contended that ‘rim size’ of tubes .and flaps for the purposes of Notification No. 35/90-C.E., dated 20-3-1990 has to be determined having regard to the contents of the said notification. He referred to Serial No. 11 of the Table annexed to the notification and pointed out that tubes of rim sizes exceeding 20″ were also specified therein. He contended that having regard to the rim sizes specified in the notification, it is evident that ‘rim size’ signifies the diameter of the tube and not its width. He stated that entries in the relevant column in the catalogues of the Chinese and the Indian Tyre Manufacturers show the ‘rim’ type or the code number of the rim and not its width as claimed by the appellants. On these grounds, he pleaded for the rejection of the appeal.
4. We have examined the records of the case and considered the submissions made on behalf of both sides. The first point to be considered is whether the appellants as the apex body representing bus and truck operators and associations of owners of vehicles, fleet operators and their cooperative societies were entitled to import the tubes and flaps in question under the Open General Licence in terms of the provisions of Para 83(3) and Sr. No. 1(4) of Appendix 6 of the Import Policy for the period 1990-93. In this regard it is seen that Sr. No. 1(4) of Appendix 6 of the Import Policy for the period 1990-93 permits the importation of permissible spares (i.e. items other than those included in Appendices 2, 3, Part A, 8 and 10) under the Open General Licence only by Actual Users (Industrial and Non-Industrial). We find that the appellants being the apex body of bus and truck operators, fleet owners and their associations, they could neither be deemed as “Actual User (Industrial)” nor as “Actual User (Non-Industrial)” in terms of the following definitions of these terms in Paras 7(1) and (4) respectively of the Import Policy for the period 1990-93 :
“7.(3) ‘Actual User (Industrial)’ shall mean an industrial undertaking, be it in the large scale, small scale or cottage industries sector, engaged in the manufacture of any goods for which it holds a valid licence or Registration Certificate from the appropriate Government authority, wherever applicable.
7.(4) ‘Actual User (Non-industrial)’ means —
(a) any commercial establishment which has been registered or holds a certificate for at least 3 years under the local law applicable to Shops and Establishments generally and which carries on any business, trade or profession, whether for the purpose of gain or not, but does not include a shop, factory, residential hotel, restaurant or eating house; or
(b) any establishment holding a licence for at least 3 years under the local law relating to the exhibition of cinematographic films to the public at the authorised premises; or
(c) any person who, not being an employee or wage earner, is himself engaged in any profession or calling and has been assessed to income-tax as such; or
(d) any laboratory, scientific or research and development institution, university or other educational institution or hospital; or
(e) any service industry in existence and holds a licence for the purpose under the local law for at least three years; or
(f) public sector (non-industrial) undertaking and run departmentally; this will not include a residential hotel, restaurant or eating house;
(g) any local authority.”
We are, therefore, inclined to agree with the Additional Collector that the appellants were not permitted to import the tubes and flaps in question under O.G.L. in terms of Sr. No. 1(4) of the Appendix of the Import Policy 1990-93. Since the appellants are not fleet operators we find that there is no infirmity in the Additional Collector’s finding that the appellants were also not entitled to import the tubes and flaps in terms of 83(2) of the said Import Policy which permitted the import of permissible spares not appearing in Appendices 2, 3, 8 and 10 of the Policy only by fleet operators owning a fleet of at least 25 vehicles. Since the goods were not covered by any other valid import licence, we confirm the Additional Collector’s finding that the tubes and flaps in question having been imported in contravention of Section 3(2) of the Import and Export (Control) Act, became liable to confiscation under Section 111(d) of the Customs Act, 1962.
5. The second point that arises for considerations whether for the purposes of detrmining the effective rate of additional duty leviable on the imported tubes and flaps in terms of Notification No. 41/89-C.E., dated 1-3-1989 the “rim size” for any tube/flap would signify the width of the ‘rim’ on which the tyre of the corresponding size is to be fitted or it would represent the diameter of such rim. For proper appreciation of the rival contentions in this regard, we refer to the Notification No. 41/89-C.E., dated 1-3-1989, which is reproduced below :–
* * * * *
6. It is seen that in the extract from the catalogue of the Chinese manufacturer, the figure in the relevant column represents ‘Rim Type’ and not the size of the rim in inches. Even though in certain tables in the catalogue of M/s. Apollo Tyres the heading of the relevant column reads as “Rim size (inches)”, in some of the tables in this catalogue the figure indicating the rim size is either prefixed or suffixed by a letter such as “W-11” or “6.00G” etc. Similarly the heading in the relevant I.S.I. specification reads as “Rim size code”. It is evident from the relevant columns in the catalogue of the Chinese manufacturer and the relevant Indian Standard Specification that the manufacturers of tyres generally indicate in their catalogues the sizes of various types of tyres manufactured by them and against each tyre what is specified is the code of the corresponding rim size and not the size of the rim in inches. Hence we are not inclined to accept that the figures 7.0 and 7.5 in the relevant column against tyres of sizes “9.00-20” and “10.00-20” respectively in the catalogue of the concerned Chinese manufacturer represents the width of the corresponding rim in inches.
7. The fact that the manufacturers of automotive tyres, specify only the code of the type of rim required for any particular tyre and the rim code and rim diameter are not one and the same also follows from the following table in respect of certain rims from the Indian Standard Specification IS : 10694 (Part 3): 1991 for Automotive Vehicles – Rims – General Requirements :
Nominal Specified Taping Taping Taping 'Tape Tape' Diameter Rim Rim Diameter Circum- Position Mandrel Mandrel of Ball Diameter Diameter Ference Diameter Circum- Tape for Rim Code ference Measurement 13 329.4 328.1 1030.8 7.3 323.5 1031.9 16.0 15 330.2 378.9 1132.4 7.3 373.3 1191.4 16.0 16 405.6 404.3 1770.2 7.3 494.7 1271.2 16.0
8. It is also seen that Sr. No. 11 of the Table annexed to the Notification No. 41/89-C.E. dated 1-3-1989 refers to tubes for tyres of Rim Sizes below 20 inches, 20 inches and above 20 inches. Similarly Serial No. 12 of the Table relates to ‘Rim Sizes’ not exceeding 25 inches. Having regard to the ‘Rim Sizes’ referred to in the Table annexed to the Notification, we are inclined to agree with the learned SDR that for the purposes of the Notification the ‘Rim Size’ has to be taken as representing the diameter of the Rim and not its width since the rim sizes of exceeding even 20 and 25 inches have been specified in the notification and rims of such large widths for automotive tyres are not used.
9. In view of the above discussion, we do not find any reason to interfere with the order passed by the Additional Collector. The appeal is therefore rejected.
