JUDGMENT
V.P. Gulati, Member (T)
1. This appeal is against the order of the Collector of Customs, Madras. The point that falls for consideration in the appeal is whether Hypodermic Syringes imported by the appellants were allowed for import against Serial No. 48(b) of List 6 of Appendix 6, Import-Export Policy, 1985-88. The lower authority has held that as these Syringes are Hypodermic which fall under Serial No. 521 of Appendix 3, Part A of Import-Export Policy, 1985-88, the import cannot be made without a valid import licence. The Collector in his order has referred to his earlier adjudication order in respect of the very same party under which the goods had been confiscated and taking into consideration that decision, he confiscated the disposable syringes imported by the appellants valued at Rs. 2,15,623/- and allowed the goods to be redeemed on payment of fine of Rs. 2,00,000/-. A penalty of Rs. 10,000/- was also levied.
2. Shri Patel, the learned Advocate appearing for the appellants pleaded that he is aware that in similar case this Bench of the Tribunal in Order No. 554/1989 in the case of M/s. Ishwamurti and M/s. Equipment Sales Corporation v. Collector of Customs, Madras has held against the appellants and the matter is covered by this order. He has pleaded that there is a clarification from the Central Board of Excise and Customs, New Delhi which has been sent to all the Collectorates, under which disposable Syringes imported and pending clearances were allowed to be cleared under OGL, vide Boards letter F. No. 478/63/87-Cus-VII dated 02 December, 1987 and their clarification was not brought to the notice of the Tribunal. The Board has stated in the said letter as under:
“I am directed to enclose herewith a copy of letter No. DO 48/1503/85-86/IPC/4277 dated 29th October, 1987 received from the Office of the Chief Controller of Imports and Exports, on the above subject for your information and necessary action.
You may allow clearance of pending consignments of disposable syringes under OGL.”
The Clarification of the JCCI & E, New Delhi referred to above is reproduced below:
“It was clarified at the meeting that disposable syringes for dental application can also be used for other medical purpose.
In the light of above, the question of transferring all types of disposable syringes to OGL is under consideration.”
The learned Counsel pleaded that in view of the instructions inasmuch as the imports were made before 15-1-1987, it should be taken to be covered by this instructions and the order of confiscation should be set aside. He has pleaded that the Single Member Bench of the West Regional Bench of the Tribunal in the case of Trident Agencies v. Collector of Customs reported in 1989 (45) ELT 116 (Tribunal) held as under:-
“Above all, the subsequent conduct of the Customs House clearing identical goods without raising any objection, again support the importer’s contention that the goods imported are not drugs and were not canalised during the Policy A.M. 83. Having regard to the course of conduct of the customs, even if the goods are treated as canalised there was no justification to impose any fine.”
He has pleaded that the Special Bench of the Tribunal in the case of Navinchandra Premji & Company v. Collector of Customs reported in 1989 (43) ELT 644 (Tribunal) took note of the fact that the goods were subsequently allowed for import under OGL and reduced the redemption fine. The said findings of the Special Bench is reproduced below:
However, after taking all the facts and circumstances into account as the imported goods are nothing but needles used for the purpose of injecting drugs and subsequently these very items are specifically inserted under Serial No. 50, List VI, Appendix VI of OGL, under ITC Policy 1988-91, we strongly feel that this is a case where lenient view has to be taken regarding redemption fine. Accordingly, we reduce the redemption fine to Rs. 1,00,000/- as against Rs. 1,50,000/-.
He has pleaded that a lenient view is called for in the case of the appellants in view of the evidence in the case of WRB decision referred to supra and also because of the fact that these Syringes are used for injecting medicines for local anesthesia in Dental application, and also in view of the clarifications of various authorities including that of the decision of the Borad ordering release of the goods, dated 2-12-1987.
3. Shri K.K. Bhatia, the learned SDR for the Department pleaded that this Bench of the Tribunal as also the Special Bench in their order reported in 1989 (43) ELT 644 have held that Syringes imported were not covered by Entry No. 48(b) of List 6 of Appendix 6, and therefore the question of setting aside the order of confiscation does not arise. He has pleaded that the ITC policy, as held by this Bench, does not permit import of hypodermic disposable syringes. He has pleaded that this Bench of the Tribunal examined as to the scope of the two conflicting Serial Numbers as mentioned above and clearly held that import of hypodermic disposable syringes would require a licence.
4. We observe that this Bench of the Tribunal had examined at length the question of importation of hypodermic disposable syringes under OGL and taken note of the clarification issued by the Director General Health Services and other authorities and after taking all these factors into consideration came to the conclusion that hypodermic disposable syringes imported by the appellants should be covered by Serial No. 521 of Appendix 3, Part A of the list of Limited Permissible items and require an ITC licence for importation. The OGL which was for Dental equipment would not cover these syringes. The finding portion of the order of this Bench of the Tribunal is reproduced below for convenience of reference:
“The point that falls for our consideration is whether the hypodermic disposable syringes imported by the appellants could be taken to be covered by OGL entry as referred to supra or the same are covered by description of the item at Serial No. 521 of Appendix 3, Part A, of the list of Limited Permissible items requiring a ITC licence for the import thereof. It is seen that entry at Serial No. 521 covers all hypodermic syringes and needles other than those which are for dental/special medical application. The point to be considered, therefore is whether the hypodermic syringes and needles imported can be taken to be for dental application covered by this exception. The appellants have pleaded that these are used for dental purposes for injecting anesthesia and, therefore, the same should be taken to be for dental application. In other words, the appellants’ interpretation of the entry is that any syringe which finds use for dental work should be taken to be for dental application and should be taken to all within the broad heading of List 6 of Appendix 6, which is as under:-
“Dental Equipment, Dental Instruments and Appliances”.
and specific Entry 48 under that viz. at Sl. No. 48 of List 6, Appendix 6. No evidence however, has been produced before us that the syringes of the type imported are known as dental syringes or marketed as syringes for dental application. No product-literature of the appellants product has also been produced to show that the syringes imported are such and by virtue of shape, size, design that these are marketed as for dental application. We observe that once a particular category of syringes, which is in the present case are hypodermic syringes, is placed on a restricted list, then any exception thereto has to be read in a manner that the restriction placed does not become redundant. The interpretation has to be such that it advances the purposes of the policy. In the present case as pleaded by the appellants, if the hypodermic syringes imported by them, which admittedly are of general use, are taken to be covered by the exception in the Entry 521 itself, the Entry 521 will become redundant as there would be hardly any hypodermic syringe which cannot be used for limited dentistry work of injecting anesthesia and hence covered by the exception as pleaded. It is settled principle of law as mentioned above that statutory entries have to be read in a manner and interpreted in such a way that these do not make any portion or part thereof as redundant. In the light of the above the entries in the OGL Appendix 6, List 6, Sl. No. 48 and the entry at Serial No. 521, Appendix 3, Part A in the Policy Book have to be read in a harmonious manner to effectuate the purpose of Import & Export Policy. It is seen that import under OGL is allowed in respect of specified categories of dental instruments and appliances and, therefore, for any import under OGL the items have to be such as are for recognised dental use primarily. It is seen that the needles allowed under Sl. No. 48 are of specialised type. On a reading of Entry 48 as a whole, it is seen that this specialised type of needles allowed for import can be used only on specialised type of syringes and, therefore, it cannot be that syringes allowed for import are of general use, while needles imported are of specialised type. In view of this and also the fact that the hypodermic syringes and needles as a class subject to the exception specified are restricted for import, it cannot be said that the disposable syringes imported by the appellants can be held to be dental syringes for the purpose of import under OGL. No evidence by way of product literature of Dental Equipment manufacturer has been produced to show that the syringes of the type imported are catalogued by them as dental syringes. The appellants have relied on the clarification issue by the Joint Chief Controller of Imports & Exports and the departmental authorities have also relied on the authority of the very same agency. It appears that there is some confusion as to the scope of the entries for syringes and that is why the matter had to be taken up by the Collector in the Joint Weekly meeting with the local CCI authorities. The opinion of the local ITC authorities is quite categorical that these syringes are not covered by OGL entry. So far as the clarification cited from the office of the CCI is concerned, it primarily sets out the position as given in the Policy and it cannot be said that there is any considered decision given by the said authority for the purpose of import after taking into account entry at Sl. No. 521 of Appendix 3, Part A, and that of Sl. No. 48 of Appendix 6, List 6. The appellants have not produced the letters under which the clarification was sought and the manner in which the issues were posed before the said authority. In view of this we hold that the said letters produced by the appellants do not in any way advance the case of the appellants. The appellants have also relied upon the opinion given by the Director General of Health Services wherein it is stated that the syringes imported were covered under OGL Entry 48 of Appendix 6, List 6. It has been rightly challenged by the Revenue that the Director General of Health Services is not the competent authority to, give any such opinion. The said authority could at best in the context of the case clarify as to the nature of the use of the goods. The objection of the Revenue is quite valid and the Director General of Health Services certainly has given as opinion in the matter which does not lie within the province of the Health Directorate. Again, in this case, in passing, it may be mentioned no background material has been furnished as to the context in which the issue was posed before the Director General of Health Services. In view of what we have held above, we hold that the hypodermic syringes imported by the appellants are not covered for import under OGL and the same are, therefore, liable to confiscation for having been imported without the authority of an import licence as required under law”.
5. The only new point the appellants put forth is the clarification issued by the Central Board of Excise and Customs on 02 December, 1987 under which directions to the Collectors to allow clearance of the pending consignments of disposable syringes were issued in view of the letter received by the Board from the office of the JCCI & E, New Delhi. This letter of the JCCI & E reproduced in the communication addressed to the Collectors states “It was clarified at the meeting that disposable syringes for dental application can also be used for other medical purposes”. Further it also states “In the light of the above, the question of transferring all types of disposable syringes to OGL is under consideration”. It is observed that this letter does not state that disposable syringes were covered under OGL. All that is stated is that the disposable syringes for dental application can also be used for other medical purposes. As set out by this Bench of the Tribunal in their order referred to supra, no evidence has been produced by the appellants in the present case also that the syringes imported by them were of the type known as dental syringes. The clarification given by the Borad states that disposable syringes for dental application can also be used for other medical purpose. The appellants have not proved that the syringes imported are designed for dental application and known in the trade as for dental application and no catalogue/literature has been produced in this regard. As it is, the equipment and instrument used for Dental surgery purposes are marketed separately and it is well known fact that the products for dental use are sold and catalogued so. In respect of the Syringes imported, no such catalogue has been produced before the Bench that the Syringes imported are designed or are marketed as those for dental application and that by virtue of their design, they find other medical use also. In fact the position in the present case is rather the reverse. Syringes imported are hypodermic syringes, which are for general application and these find limited incidental use for giving anesthesia in skin in the gums. The Syringes imported have also not been shown to be designed to carry special type of needles which are specifically designed for dental use. Syringes for general use cannot be held to be of Dental application type, as such and it will be doing violence to the language of the policy in case the items of general use which incidentally are used for injecting medicine in the gums are held as for dental application. The term ‘for dental application’ has to be held to be applying to such of those items which are designed primarily for dentistry work. In view of this, we hold that this communication of the Department does not alter the position so far as the appellants are concerned. It is observed that any violation of law has to be primarily judged based on the violation which took place at the relevant time and conduct of the appellants at that time. The appellants have not made out any case based on their conduct for reduction of the quantum of redemption fine and penalty. In fact the Collector has observed in his order that in spite of the fact that the appellants’ similar goods were confiscated earlier, they had gone ahead with the import of the present consignment relying upon the clarification issued by the Director General of Health Services. In this connection, it may be mentioned that we have held in our Order No. 554/1989 dated 12-7-1989 that Director General Health Services is not the competent authority to give opinion in the matter of interpretation of Import & Export Policy. The appellants having been penalised earlier for the same offence and having repeated the same offence cannot make any claim for reduction in the quantum of redemption fine. No case has also been made out on any other ground that the redemption fine is excessive. In the facts and circumstances of the case, therefore, we while upholding the order of confiscation, also reject the appellants’ plea for reduction in the quantum of redemption fine. The penalty levied under the impugned order in the facts and circumstances of the case cannot be said to be excessive and we uphold the same. The appeal is accordingly rejected.
S. Kalyanam, Member (J)
6. I have gone through the order proposed by my learned brother and since I feel that in the peculiar facts and circumstances of the case, the issue will have to be remitted for re-consideration by the adjudicating authority. I am not able to agree with the order proposed and hence I am hereunder recording my order separately.
7. The issue that arises for consideration in the appeal is whether ‘Disposable Syringes of size 2 cc and 5 cc’ imported by the appellant are permissible for clearance under OGL against Serial No. 48(b) of List 6 of Appendix 6 of Import-Export Policy, 1985-88. Since the facts have been set out in the order of the learned Member (Technical). I do not want to recapitulate them once over; hence I confine myself to the circumstances which, in my opinion, would necessitate a remand of the issue for re-consideration by the adjudicating authority.
8. It is contended by the appellant that in respect of identical goods namely disposable syringes covered by the same Import Policy, a clarification was issued by the Jt. Chief Controller of Imports & Exports, New Delhi which was also accepted by the Central Board of Excise & Customs and instructions were issued by the Board to the various Collectorates in pursuance thereof and the Collectorates have also been permitting clearance of the goods in question under OGL under the same Policy.
9. The communication of the Board dated 2nd December, 1987 and received by the Collector of Customs, Madras on 14th December, 1987 reads as under:-
IMMEDIATE
“F.No. 478/63/87-Cus. VII
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
New Delhi, the 2nd December, 1987
To
All Collectors of Customs
All Collectors of Central Excise & Customs
Sub: Import Policy in respect of disposable syringes
Sir,
I am directed to enclose herewith a copy of letter No. D.O. 48/1503/85-86/IPC/4277 dated 29th October, 1987 received from the office of the Chief Controller of Imports & Exports, on the above subject for your information and necessary action.
2. You may allow clearance of pending consignments of disposal(sic) syringes under OGL.
Yours faithfully,
Sd/-
(Miss M. Michael)
Under Secretary
Central Board of Excise & Customs
Copy to Ms. Manjula Subramaniam, JCCI & E, (Policy), Udyog Bhavan, New Delhi: 110 011 with reference to their letter No. 48/1503/85-86/IPC/4277 dated 29-10-1987.
Sd/-
(Miss M. Michael)
Under Secretary
10. It would be relevant to note in this context that the Collector of Customs, Madras, the very same authority who has passed the order now appealed against has, in the communication of the Board extracted above, endorsed as under:-
“Important/AC Gr.5/Please take action is terms of this clarification.” Sd/-14-DEC 1987″
11. The communication received from the Office of the Joint Chief Controller of Imports & Exports, New Delhi reads as under:
“Dear Shri Solanki,
“Please refer to this office O.M. No. 48(1503)/85-88/IPC/3563 dated 18th September, 1987 forwarding therewith a letter received from Shri Ganshyam Singh, M.P. regarding import policy in respect of disposable syringes.
“2. The matter was discussed in a meeting on 20th October, 1987 where representatives of DGHS, DGTD and your Department were also present. It was clarified at the meeting that disposable syringes for dental application can also be used for other medical purposes.
“3. In the light of above, the question of transferring all types of disposable syringes to OGL is under consideration. In the meantime, customs may consider allowing clearance of all consignments of disposable syringes which are capable of being used for dental as well as other purposes under OGL.
“with regards,”
12. The appellant also has produced a Bill of Entry dated 21-3-1988 filed by South India Surgical Co. Pvt. Ltd. alongwith relevant invoice and a Bill of Entry filed by East India Surgical Co., Madras dated 16-3-1988 alongwith relevant invoice dated 23-2-1988 and another Bill of Entry filed by South India Surgical Co. dated 16-3-1988 with invoice dated 23-2-1988 for import of identical and same goods viz., disposable syringes which have been permitted clearance by the same Madras Custom House under OGL.
13. Since identical goods under the very same Import Policy have been permitted clearance by the same Collectorate as evidenced by the aforesaid Bills of Entry in pursuance of the clarification issued by the Central Board of Excise & Customs cited supra, it would look incongruous, if the appellant alone is singled out and proceeded against penally on the ground that the import by him of the same goods under the very same Import Policy is in contravention of law. Such a course is not conceivable in any system of jurisprudence.
14. It is well settled that contemporaneous construction placed by administrative authorities or executive authorities charged with executing a statute would be relevant in construing a statutory provision. The Supreme Court had occasion in the case of K.P. Varghese v. ITO, Ernakulam (reported in 1981 Tax. L.R. 1448), to deal with a circular issued by the Central Board of Direct Taxes and held that the meaning ascribed by the very authority should be accepted as correct applying the principles of contemporanea expositio. The Supreme Court held that the Circulars of the Central Board were binding on the lower authorities and were in the nature of contemporanea expositio furnishing legitimate aid in construction. The rule of construction by reference to contemporanea expositio is a well settled rule for interpreting a statute by reference to the expositions it has received from the contemporary authority. This rule has been succinctly and felicitously expressed by Crawford in his ‘Statutory Constructions’ as “administrative construction”. After all it must be ensured that public authorities deal with every one concerned with even-handedness. This is the basic postulate and requirement of rule of law and if this basic requirement is not borne in mind, it would shatter the confidence of the people in the functioning of the administration and that quasi-judicial authorities should ensure fair and equal treatment to all, is indeed a pious judicial platitude that needs no emphasis.
15. When the Tribunal passed the Order No. 554/89 dated 12-7-1989, the above important and relevant pieces of evidence and factual information were admittedly not available. In this context, the observations of the West Bengal Bench of the Tribunal in the case of Trident Agencies v. Collector of Customs [reported in 1989 (45) ELT 116] extracted hereunder are apposite:
“… Above all, the subsequent conduct of the Customs House in clearing the identical goods without raising any objection again support the importers’ contention that the goods imported by them are not drugs and were not canalised during the policy AM-83. It is not in a single instance the objection was not taken. It was in respect of series of imports. Having regard to the course of conduct of the Customs, even if the goods are treated as canalised item there was no justification to impose any fine… .”
16. The records show that during the pendency of the appeal after the learned Cousel for the appellant had filed the relevant documents evidencing clearance of identical goods by the same Collectorate under OGL under the same Policy, the learned Sr. D.R. submitted that though he had sought instructions in this regard from the Custom House on 20th September, 1989 itself, he had not received instructions till the final hearing on 15-2-1990.I, therefore, am of opinion that in the light of the evidence adduced before us indicating that identical goods under the same Policy have been permitted clearance under OGL, the issue will have to be examined afresh by the adjudicating authority. In this view, I set aside the impugned order appealed against and remit the issue for re-consideration in the light of the findings recorded by me above.
Point of Difference
In the facts and circumstances of the case and in the light of the evidence whether the view of the Member (Technical) that the import is in contravention of law is correct or whether the view of the Member (Judicial) setting aside the impugned order and remitting the matter for re-consideration, for the reasons set out by him in his separate order is correct.
I.J. Rao, Member (T)
17. In accordance with the orders of the President under Section 129-C(5) of the Customs Act, 1962, directing that I should hear the point of difference vide F.No. 33/CEGAT/89-CR (Pt.II) dated 29-6-1990,I heard both sides at Madras.
18. Shri J.C. Patel, the learned Advocate for the appellants, submitted that he argued before the Bench that though there was some confusion about eligibility of the Syringes under OGL in 1987 subsequent events made it clear that according to the Licensing authorities and according to the Central Board of Excise & Customs OGL was extended to the importers of these Syringes. He further submitted that it would be unfair and unjust to deny the concession of OGL to the appellants’ goods when other persons similarly placed got the benefit. In this context the learned Advocate cited the following judgments to argue that if there is a particular practice prevailing in the Custom House with regard to certain goods (in respect of licensing or rate of duty) this practice should extend to everyone and no importer can be discriminated:
(1) 1985 (22) ELT 504 (Tribunal) – Guest Keen Williams Ltd., Howrah v. CCE, Calcutta.
(2) 1989 (45) ELT 116 (Tribunal) – Trident Agencies v. Collector of Customs.
(3) 1987 (30) ELT 345 (Cal.) – Collector of Customs, Calcutta v. Mitsuny Electronic Works.
The learned Advocate submitted that as can be seen from Member (Technical)’s order the appellants cited the judgment in Trident Agencies v. Collector of Customs, 1989 (45) ELT 116 (Tribunal) but while the learned Member (Judicial) followed the ratio of the said judgment, the learned Member (Technical) totally ignored the ratio. Shri Patel submitted that as, consequent on the Board’s instructions, the Custom House has been releasing all similar consignments under OGL, I should agree with the order of the learned Member (Judicial) to remand the matter to the Customs Department.
19. Shri Vedantham, the learned Departmental Representative, submitted that in view of all the documents placed before the Bench and in view of the instructions issued by the Board the matter may be remanded as held by Member (Judicial).
20. I have considered the submissions of both sides. I am aware that in similar matters where Syringes were imported the Tribunal has taken a decision that these were not entitled to OGL. Those imports related to a period prior to the importer’s present consignments. There have been subsequent developments including amendment of the licensing policy itself. There is no denial from the Department that Syringes are now consistently being allowed to be cleared under OGL under 1985-88 Policy. The ratio of the 3 judgments cited before me by the learned Advocate, one of the judgments being that of Calcutta High Court, is to the effect that there can be no discrimination against a particular importer.
21. I have no doubt that clarification issued by the J.C.C.I. or any other authority including the Central Board of Excise & Customs cannot form the basis of judgment by this Tribunal. It is only the law including Notifications that can be agitated here. However, in the facts and circumstances of the case as discussed above considered together with the ratio of the judgments cited before me by Shri Patel and also in view of the approach of the Department expressed quite fairly through the learned D.R., I am of the opinion that the matter should be remanded to the Custom House for a fresh examination. In this view I agree with the order proposed by learned Member (Judicial).
22. The difference of opinion having been answered accordingly I direct that the file be now placed before the Bench for further orders.
FINAL ORDER
The appeal stands disposed of in the light of the majority view.