ORDER
S.L. Peeran, Member (J)
1. This appeal arises from order-in-appeal dated 27-11-1986 passed by the Collector (Appeals) rejecting the appellants’ claim for clearance of their bonds for home consumption claiming the benefit of Notification No. 116/79. The facts of the case are that on 29-9-1984 M/s. Ruare S.P.A. shipped Ex Venice machine tools under Bill of Lading dated 29-9-1984 to India for exhibition in India International Trade Fair 1984 to be held at New Delhi between 14-11-1984 to 27-11-1984. While these machine tools were on highseas, the appellants entered into correspondence with the said supplier who was sending these goods for exhibition to purchase the same. The appellant after negotiation entered into contract dated 20-10-1984 for purchase of these goods with foreign suppliers through their Indian Agents. Thereafter, the appellants approached for a grant of import licence, which is otherwise necessary under the provisions of clause 3 of Import and Export Control Order, 1955. However such import licence is not required in respect of these imports which are meant for exhibits to National/International exhibitions or fairs approved by Trade Fair Authority of India as per para 291 of Hand book of Import and Export Procedures 1984-85 is- states as follows:
“Import of non-consumable goods required in connection with International/National exhibitions or fairs approved by the Trade Fair Authority of India, or the Central Government, may be allowed without any import licence or C.C.I. provided the goods in question are re-exported within a period of six months from the date or import into India and a requisite bond a bank guarantee or an instrument to the satisfaction of the Competent Customs Officer, for the purpose are furnished at the time of clearance of goods, to the Customs authorities”.
Such foreign supplies for exhibition in National /International Exhibitions or Fairs are covered by Notification No. 116/79-Cus., dated 1-6-1979. The foreign supplier have filed a bill of lading dated 29-9-1984 under Fair Bill of Entry No. 216, dated 24-11-1984 for exhibition and consequential Re-export under reexport Bond as per the said notification. The appellants had noticed that one of the machine Model No. RE-650 had not been sent by the foreign supplier for exhibition and as such the appellants had revised contract dated 7-12-1984. They also applied for registration of contract under Project Import Registration Contract Regulations on 7-12-1984 to the Competent Authority. The import licence dated 19-4-1985 for Rs. 6,03,100/- was issued to them to import the said machinery. However, the ld. Assistant Collector rejected the appellant’s application for registration of contract by his order-in-original dated 4-5-1985 on the ground that the appellant could have claimed concessional rate of duty only if the project had been registered with the Customs before the clearance of goods under Bill of Entry No. 216, dated 24-11-1984 which had been filed by the fo foreign supplier, for display in the International Trade Fair at Pragati Maidan. He has further ordered that clearance under Fair Bill of Entry tantamount to clearance for home consumption. The Collector (Appeals) also confirmed these findings, however the findings do not refer to Para 292 of Hand Book of Import & Export Procedures 1984-85.
2. The appellant’s contention is that there is no definition of the term “clearance for home consumption under the Customs Act. It has been pleaded that the goods had been brought under the said Para 292 and the relevant Notification No. 116/79 for the purpose of exhibition of International Trade. The foreign supplier had executed the bond and therefore, the goods were deemed to be warehouse. It is submitted that the very purpose of the International Fair is to enable the Indian manufacturers to inspect and select the foreign goods for home consumption. The policy permits grant of import licence and as a consequence they can get the bonded goods cleared for home consumption in terms of the import policy and the relevant notification.
3. Arguing for the appellants, ld. Advocate Shri A.C. Jain reiterated the submissions made by the importer before the lower authorities. The ld. Counsel submitted that the lower authorities have wrongly rejected the plea for registration of the contract. He submitted that registration of contract is an independent act, compared to the question of clearance goods for home consumption. He submitted that the registration of contract cannot be rejected, as it is an independent aspect from purchase and clearance from the International Fair and Exhibition. Ld. Advocate relied on the ratio of the following judgments :
1. Collector of Customs v. Ajanta Offset Packaging Ltd. -1991 (56) E.L.T. 771.
2. Shri Ravindramohan v. Collector of Central Excise, Madras – 1984 (16) E.L.T. 466 (Tribunal).
To butteress his argument that department cannot reject registration so long as CCI had issued import licence; ld. Advocate relied on the following citations :
1. Asiatic Oxygen Ltd. v. Asstt. Collector of Customs -1992 (57) E.L.T. 563 (Cal).
2. Subhash Photographies v. Union of India -1992 (62) E.L.T. 270 (Bom.).
3. Western India Plywood Ltd. v. Collector of Customs -1990 (47) E.L.T. 617 (Tribunal).
4. ld. DR reiterated the findings given by the lower authorities and submitted that registration of contract is a must for clearance of goods.
5. We have carefully considered the submissions made by both the sides and have perused the relevant Para 292 of the Import & Export Policy and the Notification No. 116/79-Cus., dated 1-6-1979. As can be seen from Para 292 and the said notification, the goods can be imported into India in connection with any Fair Exhibition. Demonstration, Seminar, Congress and Conference and the same are exempt from the whole of the duty of Customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975, and the additional duty of customs leviable thereon under Section 3 of the said Customs Tariff Act. The conditions stipulated are noted in the Notification which are reproduced herein below:
“(i) a certificate from the Ministry of Commerce or the Trade Fair Authority of India is produced to the Asstt. Collector of Customs at the time of clearance of the goods to the effect that such Fair, Exhibition, Demonstration, Seminar, Congress or, as the case may be, Conference
(a) has been approved or sponsored by the Ministry of Commerce, or the Trade Fair Authority of India, as the case may be:
(b) is being held in public interest; and
(c) is open to the general public or to a particular section of the general public for which it has relevance;
(ii) the importer undertakes through the execution of a bond of an instrument to the satisfaction of the Asstt. Collector of Customs to re-export the goods within a period of six months from the date of official closure of such Fair, Exhibition, Demonstration, Seminar, Congress or, as the case may be, Conference, or within such extended period as the Asstt. Collector of Customs may allow and, in the event of failure to re-export as aforesaid to pay the duty which would have been levied thereon but for the exemption contained herein:
Provided that the requirement of re-export as specified in this condition shall not apply to goods of expendible or perishable nature, if the Asstt. Collector of Customs is satisfied that such goods have actually been rendered waste or have been used up in the maintenance of such Fair, Exhibition, Demonstration, Seminar, Congress or, as the case may be, Conference, and in a case where the goods are rendered waste but are not used up, such goods are either surrendered to the Customs authority or destroyed in the presence of an officer of Customs:
Provided further that any advertisement and publicity material in the nature of posters, booklets, catalogues, books or pamphlets are used for free distribution and if not so distributed, are re-exported by the importer within the period specified in this condition and not sold by him under any circumstances;
(iii) a valid Import Trade Control Licence or Customs Clearance Permit covering the goods in question, wherever required by or under the Imports and Exports (Control) Act, 1947 (18 of 1947) or the Imports (Control) Order, 1955, is produced to the Asstt. Collector of Customs at the time of clearance of the goods; and
(iv) any procedure for the proper listing and identification of the goods, that may be prescribed by the Collector of Customs, is adhered to.
Explanation. – In this notification, “goods” includes –
(a) (i) advertisement and publicity materials such as posters, booklets, catalogues, books and pamphlets; and
(ii) advertising and demonstration material (which is demonstrably publicity material for the foreign goods displayed) such as sound recordings, films and lantern slides as well as apparatus for use therewith;
(b) goods necessary for the purpose of demonstrating foreign machinery or apparatus to be displayed;
(c) equipments including interpretation apparatus and sound recording apparatus;
(d) construction and decoration materials and electrical fittings for the temporary stands of exhibitors.
Notification No. 116-Cus., dated 1-6-1979″.
In this particular case, there is no dispute about the goods having been brought under the above Para 292 and the Notification from Exhibition and International Trade. The only question that arises for consideration is as to whether these goods which are under the Fair Customs Bond are required to be cleared for home consumption or they are required to be re-exported. As can be seen from the Notification, the importer i.e. foreign supplier has already executed a bond to the satisfaction of the Asstt. Collector of Customs to reexport the goods within a period of six months from the date of official closure of such Fair, Exhibition etc. Condition HI of the Notification also exempts these goods of levy of duty when a valid Import Trade Control Licence or Customs Clearance Permit covering the goods in question is produced to the Asstt. Collector of Customs at the time of clearance of the goods. The appellants have already obtained the licence from the CCP. They had also asked for registration of the contract independently under Heading 84.66 of the Customs Tariff Act, 1975. As can be seen, there are two independent aspects to the issue. Para 292 and Notification 116-Cus., dated 1-6-1979 are independent of the registration of contract. The notification in question does not stipulate registration of contract for project clearance under Heading 84.66. The clearance under this notification is independent of clearances under Heading 84.66 of the Customs Tariff Act. In this case the appellants had applied for registration under the Project Imports (Registration of Contract) Regulation, 1965 also. The appellants had obtained licence for such clearance from the CCP, who had specifically granted licence for clearance of these goods as project clearance under Heading 84.66 as well as for the benefit of the notification in question. Therefore, the Customs authorities were required to have independently applied their mind in respect of the registration of contract as well as for clearance of the goods under the notification. There are two separate facilities available to the appellants for clearance. The Asstt. Collector by his letter dated 21-5-1985 merely informed the appellants that they are not entitled for registration of contract under Project Imports Regulation as the goods had already been imported and cleared for exhibition and therefore, the concessional rate under Customs Heading 84.66 is not applicable to them. The Asstt. Collector has not passed any order to be considered as an order-in-original, but he has merely rejected the registration on a different footing which is not tenable. He has also not appreciated the fact that there has been no clearance of the goods for home consumption, but the goods had been cleared for exhibition purpose under Para 292 read with the relevant notification. The foreign supplier had executed a bond and these goods were meant for re-export. The goods would be released to the Indian buyer provided they produce a valid Import Trade Control Licence or Customs Permit covering the goods in question. In this case, the appellants had produced a valid Import Trade Control Licence or CCP covering the goods in question. Therefore, the Asstt. Collector was bound to have granted the benefit of the notification in question instead, he has rejected the same on a premise which is not found in the notification or in Para 292 of the Import & Export Rules. The Asstt. Collector has to independently look into Project Imports Regulation, 1965. The grant of registration under this regulation is an independent act. The goods which have been kept in Trade Fair cannot be considered as meant for home consumption as they had been specially imported for exhibition purpose under the stated relevant para of Import policy and the notification and they are meant for re-export. The registration for project import being an independent act, therefore, the Asstt. Collector was bound to have registered the same. Even otherwise, the lower authorities were required to have independently granted the benefit under the said notification in which the appellants are entitled to clear the goods as per the terms of the notification. Looking into the totality of facts and circumstances of the case, the appellants are entitled to succeed in this case and therefore, we set aside the impugned order and allow the appeal with a direction that the lower authority shall grant the benefit as claimed by the appellants in this matter. Ordered accordingly.
Sd/-
(S.L. Peeran)
Dated : 11-4-1996 Member (J)
J.H. Joglekar, Member (T)
6. With respect I have to differ with my learned brother in his findings.
7. Section 46(1) of the Customs Act, 1962 reads as follows :
"The importer of any goods, other than goods intended for transit or transshipment, shall make entry thereof by presenting to the proper officer a Bill of Entry for home consumption or warehousing in the prescribed form."
8. The Bill of Entry (funds) Regulations, 1976 prescribe the format of the Bill of Entry for presentation for (1) home consumption (2) for warehousing and (3) for ex-bond clearance for home consumption. The format of the Bills of Entry have been prescribed by virtue of various notifications by the Central Board of Excise & Customs. The meaning of the words, “home consumption” etc. is apparent on reading of these formats and therefore, the appellants’ contention in this regard has no merit. After the Bills of Entry have been filed under Section 46 the clearance of goods for home consumption is governed by the provisions of Section 47. The Sub-section (1) of Section 47 reads as under:
“Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed there on and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption.”
The said clause covers those goods also which are leviable to Nil duty under the tariff or under an exemption notification. This provision would apply to goods which are entered for home exemption on importation as well as those which are first warehoused and then sought to be cleared for home consumption later.
9. The goods entered for warehousing have to be deposited under bond in a private or a public warehouse and the owner’s right to deal with the warehoused goods is confined to taking measures for their preservation in terms of Section 64 of the Customs Act, 1962.
10. The impugned goods were imported under the provisions of Notification No. 116/79. The goods were cleared under “Fair Bill of Entry”. There is no such nomenclature in the Customs Act or in the rules made pursuant thereto. At the time of hearing the learned advocate was specifically asked by me whether the Bill of Entry filed was for home consumption or was for warehousing. The learned advocate was not able to reply to my query. The said goods were cleared in terms of the Notification No. 116/79 which on the perusal thereof is meant to cover goods cleared for home consumption. Therefore, the findings of my learned brother that the goods were imported under “Fair Customs Bond” is not correct. The impugned goods were admittedly cleared after the importers filed a bond in terms of the notification but the bond is required to be distinguished from the bond required to be filed by importer under Section 59 for the purpose of warehousing imported goods. On perusal of the facts on records it is very clear that the goods so cleared under “Fair Bill of Entry” were cleared for home consumption and not for warehousing. There is no substance in the learned advocate’s plea that by virtue of the said clause having executed the bond, the goods were “deemed to be warehoused”. Similarly, the Condition III in the notification speaks of the licence required to be possessed by the importer for display and not by any person, nor intends to purchase such goods from the importer.
11. I now turn to the provisions relating to Registration of Contracts for the purpose of assessment under Heading 84.66 Customs Tariff Act. The Project Imports (Registration of Contracts) Regulations, 1965 did not contain a specific provision as to the case of importation subsequent to the registration of the contract. The provision is however, a part of the Tariff Heading 84.66. The tariff heading contained the following descriptions:
“Provided these are imported (where in one or in more than one consignment) against one or more specific contracts which have been registered with the appropriate Customs House in the manner prescribed by Regulations which the Central Board of Excise and Customs may make under Section 157 of the Customs Act, 1962 (52 of 1962) and such contract or contracts has or have been so registered before any order is made by the proper officer of Customs permitting the clearance for home consumption, or deposit in a warehouse of items, components or raw materials.”
12. In this case the Bill of Entry for home consumption was dated 24-11-1984 and registration was applied for on 7-12-1984. The case was therefore, not eligible for clearance under the said tariff heading.
13. These regulations were later superseded by the Project Import Regulations (1986) which made specific provision for covering the situation arising in this appeal. Regulation 4 whereof prescribed that where such goods have been earlier imported under the coverage of the exemption notification for display in trade fair etc., the registration could be made before duty is paid on such goods earlier imported and cleared for home consumption. But this provision did not exist in the earlier rules to the detriment of the present appellants.
14. Paragraph 292 of the Import Policy does not relate to the issue before us at all. We are not concerned with the eligibility for sale of exhibits but with the registration of the contract. The emphasis on this para of the policy is clearly misplaced. These goods were not cleared under the provisions of Para 292 but of Para 291 of the relevant policy. The stipulation of re-export within six months which is embodied in the exemption notification is also contained as a condition in Paragraph 291. Therefore, the argument that the goods were imported into India and were purchased by the appellants from the exhibition following the provisions of the Import Trade Control Policy have no bearing on the eligibility for registration of the importer under the impugned regulations. In my opinion the Assistant Collector was correct in denying the benefit of the Project Import Assessment. The order of the Collector upholding the lower order is correct in the law. The appeal has no merit and is rejected.
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(J.H. Joglekar)
Dated: 6-6-1996 Member (T)
In view of difference of opinion, the following questions arise for determination by Third Member on reference, by Hon'ble President.
Whether the appellants are entitled for registration of contract under Project Import Regulations, and entitled for the benefit of concessional rate under Customs Heading 84.66 and the benefit of Notification No. 116/79-Cus., dated 1-6-1979 as held by Member fludicial) (Shri S.L. Peeran).
or
The appellants are not entitled to the benefit of Project Import and to the benefit of the Notification as held by Member (Technical) (Shri J.H. Joglekar).
Sd/- Sd/- J.H. Joglekar) (S.L. Peeran) Member (T) Member (J) Dated : 8-7-1996 Dated : 5-7-1996 Jyoti Balasundaram, Member (J)
15. The difference of opinion arising between the Members of the original Bench was heard by me on 4-8-1997. The farts of the case have been reproduced in the order recorded by the learned Member (Judicial) and hence I am not repeating them. The authorities below have rejected the importers’ application for registration of contract on the ground that the goods had already been cleared pursuant to an order made by the Proper Officer of the Customs permitting clearance of the goods for home consumption. Learned Counsel, Shri A.C. Jain contends that the Bill of Entry filed for clearance of goods for the purpose of display in Exhibition/Fair is not a Bill of Entry for home consumption and that, therefore, clearance of goods upon assessment of such Bill of Entry cannot be construed as clearance of goods for home consumption. He submits that the provisions of the Heading 84.66 of the Schedule to the CTA have to be read harmoniously with the provisions of the Project Imports (Registration of Contracts) Regulations, 1965 and a harmonious construction of the same would lead to the inescapable conclusion that the appellants were entitled to the benefit of project import since they had obtained an Import Licence to cover the imported goods (machine tools) and had applied for registration immediately after the issue of an Import Licence. He, therefore, pleads that the order proposed by the learned Member (Judicial) may be concurred with and the appeal allowed. On the other hand, learned DR, Shri S.N. Ojha, submits that the Bill of Entry filed for goods for display in Exhibition/Fair is also a Bill of Entry for home consumption and in this regard, he draws my attention to Bill of Entry Forms (Regulations) 1976 prescribing the format of the Bill of Entry for presentation for (a) home consumption (b) warehousing and (c) ex-bond clearance for home consumption. He cites the judgment of the Hon’ble Supreme Court in the case of M.J. Exports reported in 1992 (60) E.L.T. 161 (S.C.) and in the case of Bharat Commerce and Industries reported in 1997 (93) E.L.T. 653 in support of his proposition. He submits that since there is no separate provision in the Customs Act, 1962 for Bills of Entry for import of goods to be displayed in Exhibition/Fair, Section 46(1) is applicable and since it is no one’s case that the Bill of Entry filed by the importers was a Bill of Entry for warehousing, the benefit of Project Import has been rightly denied since the application for registration of contract as Project Import was filed subsequent to an order passed by the Proper Officer permitting clearance of goods for home consumption. In these circumstances, he supports the order proposed by the learned Member (Technical) proposing rejection of the appeal.
16. I have carefully considered the rival submissions. I find that, as noted by the learned Member (Technical), the Bill of Entry (Forms) Regulations prescribed the format of the Bill of Entry for presentation for home consumption, warehousing and for ex-bond clearance for home consumption. There is no provision in the Customs Act for Bills of Entry for goods imported for the purpose of display in Exhibition/Fair. The learned Member (Technical) has noted that the goods were cleared in terms of Notification 116/79 which covers goods cleared for home consumption and has come to the conclusion that the goods so cleared were cleared for home consumption and not for warehousing. The Hon’ble Supreme Court in the case of M.J. Exports Ltd. v. CEGAT reported in 1992 (60) E.L.T. 161 S.C. cited by the learned DR has held that the expression home consumption contained in Section 46 of the Customs Act, 1962 has been used in contrast to the expression “for warehousing”. In the case of Bharat Commerce and Industries v. Collector of Customs, Bombay cited supra, the Apex Court has taken the view that filing of a Bill of Entry in the prescribed form is not a procedural formality and if a statutory form is prescribed for presentation of Bill of Entry then the Bill of Entry has to be in the prescribed form. The Member (T) has concluded that the Bill of Entry filed by the appellants herein was not a Bill of Entry for warehousing. Since the appellants had filed a Bill of Entry in the form prescribed for home consumption Bill of Entry, learned Advocate cannot now argue that the Bill of Entry filed by the importers herein is to be treated as a Bill of Entry for warehousing. The order recorded by the learned Member (Technical) holding that since the Bill of Entry for home consumption was dated 24-11-1984 and the goods were cleared pursuant to the assessment of the Bill of Entry, while the importers applied for registration of contract under the Project Imports (Registration of Contracts) Regulations, 1965 only on 7-12-1984, they were not eligible for clearance under Heading 84.66 Customs Tariff Act, is supported by the decision in the case of Collector of Customs v. Ajanta Offset Packaging Ltd. reported in 1991 (56) E.L.T. 771 wherein it has been held that the goods imported for display in Fairs conditionally free of duty, subject to re-export are cleared against home consumption Bills of Entry, relying upon the Tribunal’s earlier order in the case of Skania Engineers P. Ltd. v. Collector of Customs, Bombay reported in 1984 ECR 1074.
17. For the reasons recorded above, I agree with the order proposed by the learned Member (Technical) that the appellants are not entitled to the benefit of project import and Notification 116/79-Cus., dated 1-6-1979.
18. The papers may be forwarded to the original Bench for passing the majority order.
Sd/-Â Â Â Â Â
Jyoti Balasundaram
Member (J)Â Â Â Â
MAJORITY ORDER
19. In terms of the majority order, the appellants are not entitled to the benefit of Notification No. 116/79-Cus. and the benefit of the project import as claimed by them, hence the appeal is rejected.
Sd/- Sd/- J.H. Joglekar S.L. Peeran Member (T) Member (J) Dated : 14-8-1997 Dated : 14-8-1997