ORDER
S.L. Peeran, Member (J)
1. In this appeal, the appellants have sought for setting aside the order-in-original No. 25-C/86 dated 5-11-1986 passed by the Collector of Customs, New Delhi, by which, the Collector of Customs had confiscated the impugned goods Sufeed Sarah (Poppy Seeds – Khaskhas) under Section lll(d) of the Customs Act, 1962 (hereinafter referred to as Act) imposition of Rs. 2.5 lakhs of Redemption fine and Rs. 10,000/- personal penalty under Section 112 of the Act.
2. The facts of the case as set out in the order-in-original are that the appellants filed Bill of Entry No. 1168 dated 29-9-1986 for the clearance of Sufeed Sarah (Poppy Seeds – Khaskhas) of declared value of Rs. 1,23,615/- CIF covered under Invoice No. 6/62/E/SCL/86-87 dated 21-8-1986 of M/s. Saeed & Co., Lahore. The appellants claimed the clearance of the goods under import under O.G.L. Appendix 6(1) of AM 85-88 Policy. The Customs covered the impugned goods under Entry No. 121 of Appendix 2 Part B of AM 85-88 Policy and for the clearance of which sought specific licence/CCP.
3. The Collector of Customs relied upon the letter No. 50/1/84-85/PC dated 25-6-1986 issued by C.C.I. & E., New Delhi, by which they had clarified that the khaskhas is a consumer item of agricultural origin and such import is not allowed in terms of SI. No. 121 of Appendix 2 Part B of Import & Export Policy AM 85-88.
4. The appellants submitted before the Collector of Customs that they were actual users having Drug licence for the manufacture of Ayurvedic medicines in which the imported goods Khaskhas was used and hence claimed clearance under O.G.L. They have further submitted that they had obtained no objection on the Bill of Entry from the Ministry of Health, New Delhi. The item is not specifically mentioned anywhere in Appendices No. 2, 3 Part A, 5 & 8, hence import allowed vide Appendix 6, Sl.No. 1 (OGL for A.U.). It is not a consumer item and does not satisfy needs without further processing. They had imported previously and the same was released on 6-8-1986. They did not have any malafide intention or mensrea. There was no public notice to restrict or ban this item so they could not know that this item is not allowed to actual users industrial.
5. The Collector of Customs rejected the plea of the appellants that the imported goods were not consumer item and held that the goods fell within Entry No. 121 Appendix 2 Part B and the same having been imported without Import licence, hence being liable for confiscation under Section lll(d) and for penalty under Section, l12 of the Act. He further observed in his order that the goods had been brought from a country where it is an illicit cultivation. India being the world’s largest producer of opium and poppy seeds and in view of the matter, the Collector observed that he did not find it necessary to take a lenient view and hence passed the impugned order.
6. Shri A.R. Madhav Rao, Advocate for the appellants, submitted that the goods were not cultivated illicitly as the export had been done through Pakistan Trading Corporation a Government unit. He further submitted that the imported goods poppy seeds were in crude form and it was required by importer-appellant for use in the manufacture of Ayurvedic drugs and hence it was entitled for being cleared under OGL as it was not a Consumer item. He also referred to two other orders Nos. 44/86 and 45/86 dated 28-10-1986 passed by the Collector of Customs, New Delhi in which for import of the same product of same quantity, penalty had not been imposed but only redemption fine of Rs. 15,000/-had been imposed.
7. Shri R.M. Ramchandani, Departmental Representative for the Departrnent in his reply submitted that the imported item being a crude drug, had not been listed in appendix 6 of ITC Policy. It was freely available in India and consumer goods of agricultural origin, hence required import licence. The importer had also shown the invoice as crude drug as it did not correlate to the ITC Policy, the Collector was justified in passing the impugned order.
8. Shri A.R. Madhav Rao in his reply submitted that the items in appendix 6 of ITC Policy was not exhaustive and hence the importers were entitled to import under OGL as an input for his home consumption and sought for setting aside the impugned order.
9. We have heard both the sides, perused the records and carefully considered the submissions of both the sides. The question that arises for consideration is whether the imported goods namely Sufeed Sarah (Poppy seeds) Khaskhas require import licence/CCP under Entry No. 121 of Appendix 2 Part B of AM 85-88 Policy as contended by Department or whether the clearance of goods can be cleared under import under OGL Appendix b(l) of AM 85-88 with the said requirement as sought for by the appellants-importer. The second question that arises for consideration is as to the justification of imposition of redemption fine of Rs. 2.5 lakhs and personal penalty of Rs. 10,000/-under Section 112 of the Act in view of their earlier importation being granted on the basis of the endorsement of bill of entry by Ministry of Health for their home consumption as crude drugs.
10. The contention of the Department is that the import of the goods without a valid import licence is prohibited under Clause 3(1) of the Import (Control) Order, 1955 (as amended) issued under Section 4 and 4-A of Imports and Exports (Control) Act 1947 read with Section 11 of the Act as made applicable by virtue of Section 3(2) of the Act. Any goods imported in violation of the said prohibitions are liable for confiscation under Section lll(d) of the Act. It is the further contention of the Department that any person who in relation to any goods does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111 or abets the doing or omission of such an act is liable to action under Section 112 of the Act.
11. The Collector has relied upon the letter No. 51/1/84/IPC dated 25-6-1986 issued by Dy. Chief Controller of Imports and Exports, New Delhi in that it is stated that the goods are a consumer item of agricultural origin and as such, the import without Import licence is not allowed in terms of Sl.No. 121 of Appendix 2 Part B of Import and Export Policy AM 85-88; the letter reads as under –
“Khaskhas (Poppy seeds) is a consumer item of agricultural origin and as such, its import is not allowed in terms of S.No. 121 of Appendix 2 Part B of Import and Export Policy, 1985-88”.
The contention of the appellants is that the goods are not consumer goods but crude drugs and the same can be imported for home use consumption for manufacture of ayurvedic medicine and that they being licensed manufacturer, the Bill of Entry having been approved by Ministry of Health, the import is not in violation of OGL Appendix 6 Item No. 1 of ITC Policy for AM 85-88 as no import licence is required for import. The Appendix 6 item No. 1 of ITC Policy of AM 85-88 gives a list of crude drugs that could be imported by licensed manufacturer for home consumption for manufacture of drugs. The list does not include the imported goods namely poppy seeds safeed sarah Khaskhas. We shall examine these contentions and also the contentions regarding the Collector’s observation of the imported goods being illicit cultivation.
As regards, the Collector’s observation that the imported goods are brought from a country where it is an illicit cultivation, it is to be said that the observation is not based on any evidence and hence, an inference cannot be drawn by us. As also, the export has been done through a State agency of that country. However, the impugned goods are consumer goods, as has been held by the Collector, which finding has not been seriously challenged or controverted by the appellants by placing any independent material before us. The Collector has held that khaskhas is widely used in north India directly in tea and bakery product. The appellants have not placed any material to show that the imported product cannot be directly consumed and it required processing to be done. Hence, this finding of the Collector of the imported goods being consumer goods has to be upheld. All such goods require import licence. Admittedly no import licence has been obtained in this case and hence there is a clear violation of the provisions of law. Mere endorsement on Bill of Entry by any Department of Govt. for certification of home consumption is not sufficient, as this item is clearly covered under Import Licensing Policy.
12. The counsel for the appellants, contended that the imported goods have been described as crude drug in the Bill of Entry and that the same was required by the importer for manufacture of ayurvedic drugs and for which no licence is required under OGL Appendix 6 Serial No. 1 (OGL for AU) and import is allowed in this appendix. The item is also not specifically mentioned in Appendices No. 2, 3 Part A, 5 and 8. But on close scrutiny of the Appendix 6(1), we do not find the item khaskhas – sufeed sarah (Poppy seed) being included in the list. The counsel slated that the list is not exhaustive and that Tribunal can extend the benefit on the basis of materials placed by them for use of the imported product in manufacture of ayurvedic drugs, which point has not been controverted by the Department. Such a reading cannot be done by us. We cannot add, include or even exclude any item from the Appendix 6, Serial No. 1 (OGL for AU) which is beyond our scope and hence, we reject this plea of the appellants.
13. The only other question which remains for us to answer is as to the justification of the imposition of penalty of Rs. 2.5 lakhs and fine of Rs. 10,000/-. The counsel pointed out that they had been allowed to import the said item on previous occasions and had been cleared also. There had been no malafides in importation as it was certified by the Ministry of Health for use in the manufacture of drugs and the importer is a genuine user of the same which is not doubted by the Department. He also relied upon the order of the Deputy Collector of Customs, New Delhi in ordcr-in-original No. 44/86 and 45/86 dated 28-10-1986 in which another licensed ayurvedic manufacturer had also imported like quantity, who had not been imposed any penalty and redemption fine had been only Rs. 15,000/- in both the orders. There is force in his argument. We have perused both the orders-in-original No. 44/86 and 45/86. The date of Bill of Entry in these cases is 26-9-1986 while that of the impugned Bill of Entry is 6-8-1986. The order passed in above cases is dated 28-10-1986 while the impugned order is dated 5-11-1986. The language in both these orders is almost same in first few paragraphs although the orders in No. 44 and 45/86 are passed by Deputy Collector while the impugned order is passed by Collector of the same office. On the face of it, the redemption fine and penalty imposed in the impugned order appears to be discriminatory.
14. It is unfortunate, that when similar consignments are imported by same type of dealers and manufacturers, different yardsticks are applied for imposition of redemption fine and penalty. It is better that the adjudicating officers of the same jurisdiction-al Collectorate while passing orders under similar circumstances adopt uniformity in imposing fines and penalties to avoid complaints of discrimination. They should create an impression of fairness in the minds of the assessees.
15. While keeping in view; the orders in original No. 44/86 and 45/86 dated 28-10-1986 and the above observations made and also the fact that previous consignments of the appellants have been cleared without fine and penalty and also keeping in view the fact that the importer being a genuine user of the impugned goods for manufacture of ayurvedic medicines, the redemption fine imposed in the impugned order is reduced to Rs. 15,000/- (Rupees fifteen thousand) and the penalty of Rs. 10,000/- (Rupees ten thousand) is set aside. The Revenue shall refund the excess redemption fine collected and also penalty, if already paid, within six months from the date of this order. The appeal is party allowed in terms of the above extent only.