ORDER
P.K. Kapoor, Member (T)
1. The appellants filed Bill of Entry No. 102885 dated 20-2-1991 for the clearance of a consignment declared to contain Moulds. They claimed that the goods were covered by the Open General Licence, in terms Sr. No. 6 of Appendix (6) of the Import Policy 1990-93. The appellants were served with a show cause notice on the ground that Sr. No. 6 had been deleted from the O.G.L. on 6-10-1990 vide I.T.C. Public Notice No. 83. It was stated that in the show cause notice that the L.C. which expired on 30-10-1990 was valid for shipments upto 15-10-1990 was amended on 27-11-1990 for shipment upto 31-1-1991. It was further alleged that even though the goods were shipped within the validity of period of the amended L.C. the amendment having been effected after the issue of Public Notice No. 83 dated 6-11-1990, amounted to a fresh commitment in terms of paras 204(6) and 224(2) of the Import Policy AM 90-93. On these grounds it was alleged that the import of the goods under OGL in terms of Sr. No. 6 of Appendix 6 was not permissible.
2. In reply to the show cause notice, the appellants stated that:
(a) In terms of Public Notice No. 95 issued by the Chief Controller of Imports and Exports, the goods were covered under OGL since shipment was made within three months from the date of I.T.C. Public Notice No. 83. (b) The Chief Controller of Imports and Exports had issued letter dated 2-4-1991 extending the L.C. (c) The Deputy Chief Controller of Imports and Exports in his letter dated 14-5-1991 had recommended the release of the goods.
In the impugned order dated 4-7-1991, the Additional Collector confiscated the imported moulds under Section 111(d) on the grounds that they were not covered by the OGL. The importers were, however, given the option to redeem the goods on payment of a fine of Rs. 6,30,000/-. A personal penalty of Rs. 2,70,000/- was also imposed on the appellants under Section 112(a) of the Customs Act, 1962.
3. On behalf of the appellants, the learned Advocate Shri V. Sridharan appeared before us. He stated that even though in terms of Public Notice No. 83-ITC(PN)/1990 dated 6-11-1990 Item No. 6 covering Moulds and other tools was deleted from OGL in Appendix (6), in terms of Public Notice No. 84-ITC(PN)/90-93 the facility for the importation of moulds under OGL was continued in those cases where Irrevocable Letter of Credit had been opened prior to the issue of Public Notice No. 83 dated 6-11-1990. In such cases Shri Sridharan pointed out that three months’ period was allowed for shipment of goods from 9-11-1990. The learned Advocate reiterated his stand that the shipment having been effected on 18-12-1990 and the Letter of Credit opened prior to 6-11-1990 having been revalidated the appellants were permitted to import the moulds in question under OGL in terms of Public Notice No. 84 dated 9-1-1990 and No. 95 dated 23-11-1990. Shri Sridharan further added that on a reference by the Additional Collector, the Deputy Chief Controller of Imports and Exports had confirmed that the moulds imported by the appellants could be deemed as covered by the OGL. He stated that the Joint Chief Controller of Imports and Exports vide his letter dated 14-5-1991 while approving the extension of the Letter of Credit and the period of shipment upto 30-4-1991 had requested the Customs authorities to allow the release of the imported moulds under OGL. He contended that provisions of paragraphs 204(6) and 224(2) were incorrectly invoked by the Additional Collector since the appellants’ goods were not imported against REP Licence. On these grounds he pleaded for the impugned order being set aside and the imported moulds being allowed to be cleared against OGL. In support of his contentions, the learned Advocate cited the following case law:
1.
Tara Art Printers, New Delhi v. Collector of Customs, Bombay – reported in 1985 (20) E.L.T. 358
.
2.
Bipin Industries, Kanpur v. Collector of Customs, Bombay – reported in 1991 (56) E.L.T. 894 (Tri.)
.
4. On behalf of the Revenue the learned SDR Shri Ashok Mehta stated that Entry No. 6 of Appendix (6) of the Import Policy AM 90-93 which covered moulds and certain other tools was deleted by P.N. No. 83 dated 6-10-1990. He added that the disputed goods were imported by the appellants against a letter of credit which expired on 30-10-1990 and was valid for shipment only upto 15-10-1990. He contended that the amendment to the said Letter of Credit on 27-11-1990 carried out by the Bank permitting shipment upto 31-1-1991 amounted to a fresh commitment being made by the appellants. He argued that the appellants were not entitled to make any fresh commitments after deletion of the item of Moulds from the OGL on 6-10-1990. On this account and also for the other reasons given by the Additional Collector he pleaded for the rejection of the appeal.
5. We have examined the records of the case and considered the submissions made on behalf of both the sides. It is seen that Serial No. 6 of Appendix 6 of the Import Policy for the period AM 90-93 permitting the import of moulds and other specified tools was deleted from the Open General Licence on 6-11-1990 vide ITC Policy Notice No. 83. However, Public Notice No. 95-ITC(PN)/1990 dated 23-11-1990 issued by the Chief Controller of Imports and Exports clarified that pre-ban commitments in respect of items deleted from the OGL vide Public Notice No. 83 of ITC(PN)/1990 dated 6-10-1990 were to be honoured in cases where the imported goods were covered by irrevocable Letter of Credit opened and established before 6-11-1990 and shipment was effected within 90 days of 6-11-1990. In the impugned order the Additional Collector observed that the Letter of Credit opened by the appellants in favour of the supplier expired on 30-10-1990 and the last date for shipment in terms of the conditions of the Letter of Credit was 15-11-1990. It was held that the amendment of the Letter of Credit on 20-11 -1990 extending the negotiation and shipment upto 31-1-1991 and 15-2-1991 respectively, amounted to a fresh commitment. In support of his finding the adjudicating authority referred to clarification regarding fresh commitments in relation to REP Licences in paras 204(6) and 224(2) of the Import Policy 1990-93. The permission granted by the Chief Controller of Imports and Exports to extend the Letter of Credit vide Deputy Chief Controller of Imports and Exports letter No. IPC/17/39/90/482 dated 14-5-1991 was disregarded by the Additional Collector.
6. The appellants’ case is that the communication dated 20-11-1990 from the Delhi Branch of Deutsche Bank to their Taipai Branch extending the date of negotiation and shipment to 31-1-1991 and 15-2-1991 respectively amounted to revalidation of the original Letter of Credit which was opened prior to 6-11-1990. The appellants have contended that the goods were thus imported and the original Letter of Credit dated 9-8-1990 after its revalidation and shipment having been effected on 18-12-1990, the import of goods was permissible under OGL in terms of Public Notice No. 95-ITC(PN)/90-93 dated 23-11-1990.
7. In order to appreciate the rival contentions it would be desirable to refer to the last para of Public Notice No. 95-ITC(PN)/90-93 dated 23-11-1990 which reproduced below:
“…The proforma for Chartered Accountant Certificate given in Ministry of Commerce Public Notice No. 84-ITC(PN)/90-93 dated the 9th November, 1990 shall be substituted by the proforma given in Annexure to this Public Notice. The Bills of Entry will be scrutinised by the Chartered Accountant and particulars thereof will be given in the Certificate. The Bills of Entry will not be required to be submitted to the Open General Licence Import Entitlement Certificate issuing authority. Consequently the words “duly supported by the original Bill of Entry” appearing in Annexure-I to Ministry of Commerce Public Notice No. 84-ITC(PN)/90-93 dated the 9th November, 1990 should stand deleted.
Attention is also invited to Ministry of Commerce Public Notice No. 83-ITC(PN)/90-93 dated the 6th November according to which unlisted raw materials, components, consumables and spares as well as jigs, fixtures, patterns (including contour roller dies) moulds (including moulds for die casting) and press tools stand shifted from the Open General Licence List. In respect of such items taken out from Open General Licence, imports by the eligible importers shall not be allowed except to the extent of irrevocable Letters of Credit opened and established the date of the said Public Notice i.e. before 6th November, 1990 for which shipments are made within a period of ninety days from the date of the said Public Notice i.e. from 6th November, 1990.
The Actual Users are advised to send particulars of imports (description of items and value thereof) to the office of Chief Controller of Imports and Exports (Import Policy Cell) Udyog Bhawan, New Delhi and to the sponsoring authority concerned.”
It is seen that the Letter of Credit established by the appellants in favour of the suppliers on 9-8-1990 permitted shipment upto 15-10-1990 and negotiation upto 30-10-1990. Since the shipment was not effected within the stipulated period the Letter of Credit expired on 15-10-1990. The first communication by the appellants’ Bank to the Foreign Bank extending the Letter of Credit for shipment upto 15-11-1990 was dated 24-10-1990 and thereafter on 27-11-1990 the date of shipment was further extended upto 31-1-1991. The learned counsel for the appellants has relied on the Tribunal decision in . the case of
Tara Art Printers, New Delhi v. CC, Bombay
and
Bipin Industries, Kanpur v. CC, Bombay
(supra) in support of his contention that in view of the communications dated 24-10-1990 and 27-11-1990 addressed by their Bank to the Foreign Bank extending the date of shipment and the goods having been shipped prior to 31-1-1991, the goods have to be deemed as having been imported against the original Letter of Credit established by the appellants on 9-8-1990.
8. It is seen that in the case of
Tara Art Printers, New Delhi v. CC, Bombay
when the Letter of Credit opened on 25-2-1983 permitting shipment upto 15-6-1983 was amended on 31-5-1983 to extend the date of shipment of the goods, the Tribunal held that the action to extend the validity of the Letter of Credit did not amount to opening of a new Letter of Credit. In the case before us, we find that the Letter of Credit opened on 9-8-1990 was valid for shipment upto 15-10-1990 and negotiation upto 30-10-1990. On 24-10-1990 it was extended to permit shipment upto 15-11 -1990 and negotiation upto 30-11-1990. Thereafter on 27-11-1990, it was once again extended to allow shipment upto 31-1-1991 and negotiation upto 15-2-1991. We find that on both occasions when the appellants took action to extend the validity of the Letter of Credit, it had not finally expired and the shipment of the goods was effected on 18-12-1990 i.e. prior to the extended date of shipment in terms of the second amendment of the Letter of Credit carried out on 27-11-1990. Under these circumstances, we are of the view that on the ratio of the Tribunal’s decision in the case of
Tara Art Printers, New Delhi v. CC, Bombay
(supra) the imported goods have to be held as having been imported against the Letter of Credit which was established by the appellants in favour of the foreign suppliers on 9-8-1990.
9. In view of the finding that the goods were covered by the Letter of Credit opened by the appellants on 9-8-1990 and also for the reason that shipment of the goods was effected on 18-1.2-1990 i.e. within the period of 90 days of 6-11-1990 as required under Public Notice No. 95-ITC(PN)/90-93 dated 23-11-1990, it has to be held that the disputed moulds were covered by the Open General Licence in terms of ITC Public Notice No. 83 dated 6-11-1990. In this regard, it would be pertinent to mention that in his letter No. IPC/17/39/90/16 dated 2-4-1991, the Deputy Chief Controller of Imports and Exports had also informed the appellants that having regard to the fact that the LC was opened prior to 6-11-1990, its validity and shipment period was being extended upto 30-4-1991 for Moulds worth US $ 110.200.
10. Before we part with the matter we would observe that paragraphs 204(6) and 224(2) of the Import Policy relied upon by the Additional Collector are not relevant to the issue under consideration in this case since they relate only to REP licences.
11. In view of the above discussion, we set aside the impugned order and allow the appeal.