ORDER
N.K. Bajpai, Member (T)
1. This is an appeal against the order of the Additional Collector of Customs, New Custom House, Bombay ordering confiscation of a consignment of 5000 kgs. of synthetic Rubber (Hypalon 40) under Section lll(d) of the Customs Act, 1962 on the ground that its import under the Open General Licence Appendix 6 (list-8 Part I Serial No. 537) of the Import Policy for April 90-March 1991 was not permissible. The appellants were given the option to clear the goods on payment of a fine of Rs. 29,000 in lieu of confiscation.
2. The adjudicating authority has held that Hypalon 40 is Chloro-sulphonated Polyethylene and, being a saturated hydrocarbon, it is correctly classifiable in Chapter 39 of the Customs Tariff. This being the classification for assessment of duty under the Customs Tariff, the goods could not be differently classified for Import Trade Control purposes as synthetic Rubber. Para-65(2) of the Hand Book of Rules & Procedure of the Import Policy for 1990-93 also supports the view that the classification of goods for customs as well as ITC purposes should be the same. Besides, the individual clarification for specific item given by the Joint Chief Controller of Imports & Exports is not binding on the adjudicating authority unless there is doubt or dispute on the scope of the entry or in the nature and specification of the product.
3. The appellants have taken the following grounds in their appeal :-
(a) Hypalon 40 is the trade name of DU Point Ltd., the manufacturers of the goods. This product is a synthetic rubber made of Chlorosulphonated Polyethylene. This product is available in various grades and is known in the trade and in technical parlance also as a synthetic rubber. Reliance is placed on the “Handbook of Rubber Technology with Product Formulary” issued by SBP Consultants & Engineers which lists Hypalon as a Synthetic Rubber. In another publication “Rubber Technology” edited by Mauriee Morton (Van Nostrand Reinhold Company, New York) Hypalon 40 is described as a Synthetic Rubber – the general purpose type – with good balance of processing and vulcanizate properties.
(b) The appellants are Actual Users (Industrial) and have been importing this product for the last several years under the OGL as Synthetic Rubber. In the 1990-93 Import Policy, “Synthetic Rubber” was listed at Serial No. 537 of List VIII (Part I) of Appendix-6(c), the appellants sought a clarification from the Chief Controller of Imports and Exports in accordance with the prescribed procedure as per paragraph 27(3) of the Import Policy and the latter have confirmed that Chlorosulphonate Polyethelene (Hypalon 40) is covered by Serial No. 537 Appendix 6 List VIII (Part I) of the 1990-93 Policy. Since the final authority for interpreting the Import Policy is the Chief Controller of Imports and Exports, the appellants had the goods shipped only after obtaining the clarification. Thereafter they also wrote a letter to the Assistant Collector of Customs bringing the clarification to their notice and pointing out that in spite of the clarification by the appellants in the past, they were compelled to produce an Import Licence to clear the consignments which had already arrived. They even requested the Assistant Collector to cancel the endorsement on the licences for consignments which had already been cleared. Despite the clarification which, in terms of the Policy, was binding on the Customs Authorities, they did not allow clearance of the goods under the OGL and finally passed an order confiscating the goods.
(c) One of the reasons given by the Additional Collector in his order is that the product is classified under Chapter 39 of the Customs Tariff and, therefore, the goods imported are not Synthetic Rubber since Synthetic Rubbers are covered by Chapter 40. The appellants’ contention is that the classification of goods in various Appendices has nothing whatsoever to do with the Tariff Classification under the Customs Tariff. The two classifications have two totally different considerations.
(d) The Additional Collector has relied upon paragraph 65(2) of the Handbook of Procedures (1990-93) to substantiate his finding that no different meaning could be assigned for Synthetic Rubber for import policy purposes in contradiction to what is assigned for customs classification. Since the considerations for classification in the import policy and in the Customs Tariff are totally separate and distinct, the reasoning adopted by the adjudicating authority is untenable.
4. We have heard Shri D.B. Shroff with Shri Sheeraj, learned Counsels for the appellants and Shri Ram Prakash, learned SDR for the Department. There are two important questions which we have to consider in this appeal. The first is the question of co-relation between the Customs Tariff and the Import Policy and, whether the classification adopted for the Customs Tariff must necessarily be followed for purposes of determining the validity or otherwise of the importation of certain goods under the Open General Licence. The second question is whether importation of certain goods which is in accordance with a prior clarification issued by the licensing authorities can be called into question by the Customs when the goods arrive. The Additional Collector has held that Hypalon 40 which is classifiable as plastics under Chapter 39 of the Customs Tariff cannot be classified as Synthetic Rubber for the purpose of clearance under the OGL – even when the licensing authorities have given a prior clarification to that effect. Shri Shroff, the learned Counsel had invited our attention to paragraph-28 of the Import Policy (1990-93) in support of his contention. Paragraph-28 is reproduced below for the sake of convenience :-
“28. The interpretation given by the Chief Controller of Imports & Exports, New Delhi in the matter of interpretation of Import Policy and Procedures shall be final and will prevail over any clarification given by any other authority and person in the same matter”.
5. It will be seen from the above that it is clearly mentioned in the Policy that the interpretation given by the Chief Controller of Imports & Exports on the Policy will prevail over any clarification given by any other authority. The appellants had placed on record the copy of their application to the licensing authority as well as the clarification given by them. It is in the light of this clarification that there is no doubt that the import of Hypalon 40 is covered by Serial No. 537, Appendix-6, List-8, Part I of the Import Policy for 1990-93. Serial No. 537 in this Policy relates to “Synthetic Rubber other than those appearing in Appendix 3 Part A”. The entry in Appendix 3 Part A at Serial No. 482 is as under ;-
“482. Synthetic rubber, the following :-
(i) Styrene Butadiene Rubber (SBR); and – 34-1193-00-3
(ii) Poly Butadiene Rubber (PBR) – 34-1192-00-7.”
6. There is no dispute that what the appellants have imported is Chlorosulphonate of Polyethylene and this does not correspond to the entry in Appendix 3 Part A. This being so, the interpretation placed by the licensing authorities on the Policy has to be accepted. In this connection we would like to refer to a decision of the Tribunal in the case of Southern Sea Foods Private Ltd. v. Collector of Customs, Madras [1986 (26) E.L.T. 89] in which a single Member of the Tribunal has held that any interpretation of the import and export policy or procedure given by the Chief Controller of Imports & Exports, New Delhi will prevail over any other clarification in the same matter given by any other authority or person. We observe that the learned Additional Collector has not cited any authority for his view that an individual clarification for a specific item by the CCI is not binding on the adjudicating authority unless there is a doubt on the scope of such entry or in the nature in specification of the product. We are unable to accept such a view which could have some force if the appellants had not sought clarification before the shipment of the goods and had approached the licensing authorities for a clarification after the goods had arrived and the Customs authorities had called the importation into question. Therefore, on this ground alone, we consider that the learned Additional Collector has taken an erroneous view of the matter.
7. As to the second question of co-relation between the entries in the Customs Tariff and those in the Import Policy, for which the learned Additional Collector has referred to paragraph 65(2) of the Handbook, all we can say is that this provision merely says that with effect from 1st April 1988, the Schedule to the Imports (Control) Order has been revised in alignment with the first Schedule to the Customs Tariff (Amendment) Act, 1985. Even though the two are aligned, there is little doubt that the purpose of classification in the two enactments is distinct and separate. Since the Open General Licence is a document which provides for import of goods without an import licence and categorises innumerable varieties of goods under different categories for the purpose of regulating their imports, the considerations which go into this classification are very different from those which decide classification for purposes of levy of Customs duty. We are, therefore unable to accept this view of the learned Additional Collector. We would also like to mention that during the hearing the learned Departmental Representative had referred to the decision of the Tribunal in the case of National Insulated Cables Co. of India Ltd. v. Collector of Customs, Calcutta [1985 (21) E.L.T. 793] in which it was decided that Hypalon 40 & 40E were classifiable as Synthetic Resins under Heading No. 39.01/06 of the Customs Tariff and not as Synthetic Rubber under Heading 40.01/04 ibid. Since the question of classification of the goods for assessment of duty is not the subject matter of the appeal before us, it is not necessary for us to go into this question with reference to the decision cited before us. In fact, the following portion of paragraph 11 of the decision in that case is relevant and is quoted below :-
“The fact that the import control authorities recognise Hypalon as a Synthetic Rubber is not, in our view, decisive of the classification of the goods under the Customs Tariff Schedule since the objects of the two enactments are different”
8. The learned DR had also referred to the judgment of the Supreme Court in the case of Akbar Badruddin Jiwani v. Collector of Customs [1990 (47) E.L.T. 161] and paragraph 45 of the judgment in particular in which the Supreme Court had referred to a decision of the Tribunal in the case of Health Ways Dairy v. State of Haryana. While quoting from a certain paragraph of this decision, reference was made to the fact that the Import Schedule of the ITC Order was aligned with the Import Schedule of the Customs Tariff and the rules of interpretation etc. of the Customs Tariff became automatically applicable to the interpretation of the policy. While there could not be two views on the general question, what we have to consider is that the Open General Licence itself in the Import Policy is regulated by Appendix 6 which runs into 52 paragraphs covering 17 pages besides there are as many as 11 lists giving hundreds of items in each list.
9. According to the clarification of the ITC authorities the import of Hypalon 40 is permissible under the Open General Licence and since this clarification was available before the goods were shipped there is no need to go into other questions for the purpose of deciding the validity of the import. In fact, Shri Shroff had pointed out during the hearing that the licensing authorities had also furnished a clarification about the matter to the Rubber Association which was subsequently accepted by the Customs House and clearances have been allowed under the Open General Licence. We consider that in view of the clarification obtained prior to the shipment of the goods it is not necessary for us to go into other questions for the purpose of deciding this appeal. The learned JDR had raised a question that the clarification had not been given by the Chief Controller of Imports and Exports but by the Joint Chief Controller of Imports and Exports, Bombay.
10. It appears from paragraph 27(3) of the Import Policy that it is permissible to obtain clarification on any item wise entry by Actual Users from the Regional Licensing Authority at Delhi (CLA), Bombay, Calcutta & Madras and that such clarification can be given in consultation with the concerned Technical Authority or the Regional Clarification Committee, wherever considered necessary. There is a procedure prescribed for obtaining such clarifications and the appellants have submitted copies of their application as well as the clarification furnished. In view of this, we do not consider that there was any irregularity in the clarification furnished by the Joint Chief Controller of Imports & Exports, Bombay. In view of the above, the impugned order is set aside and the appeal is allowed with consequential relief to the appellants.
G.P. Agarwal, Member (J)
11. After having the advantage of going through the Order proposed by learned Technical Member I would like to dispose of the appeal as follows –
11.1 On the question as to whether the imported subject goods, namely, Synthetic Rubber (Hypalon 40) would be eligible for OGL facility under SI. No. 537 of Appendix-6 List 8 Part I I.P. 1990-91, my answer is in the affirmative in view of paragraph 28 of the Import Policy as reproduced in paragraph 4 of the Order proposed by my learned Technical Member. However, I would like to say that the said paragraph itself provides that the interpretation given by Chief Controller of Imports and Exports, New Delhi in the matter of interpretation of Import Policy and Procedures shall be final and will prevail over any clarification given by any other Authority and person in the same matter. In other words, it does not say that such interpretation would be binding on the Customs Authorities. It simply says that the interpretation given by CCI & E would prevail over any clarification given by any authority in the same matter and rightly so because while deciding the question of legality of the importation of the goods it is for the Customs Authorities to decide the issue as much depends upon the facts and circumstances of each case and if during the question of adjudication more than one clarifications are available on the record, the Adjudicating Authority would keep in mind that the interpretation given by CCI & E would prevail over any other clarification given by any other authority and person in the same matter. In other words, I am not in agreement with my learned Technical Member that the interpretation given by the CCI & E would be binding on the Adjudicating Authority in all matters irrespective of other facts and circumstances of the case. Since in the present case there is no evidence on record to the contrary, I am inclined to hold that the product imported by the appellants herein is covered by the terms of the licence relied by them. Since I have held that the subject imports are covered by the Import Licence in this case I do not feel call upon to consider the other contention raised by the learned Counsel before us. In the result, the impugned order is set aside and the appeal is allowed with consequential relief to the appellants, if any.