ORDER
V.P. Gulati, Member (T)
1. This appeal is against the order of the Collector of Customs (Appeals), Madras. Under the impugned order, the lower appellate authority has confiscated Duracell Dry Cell Batteries holding the same as consumer goods covered by Negative List under the Import Policy 1992-1997 requiring import licence for the same. The appellants admittedly did not have any import licence and they sought clearance of the goods under Open General Licence (OGL).
2. The learned Consultant for the appellants pleaded while considering that the goods imported are consumer items, that the practice in the Customs House to allow import of consumer items in the light of the clarification given by the CCI & E vide his letter dated 25-5-1992, copy of which has been filed in the paper book. Para 2 of the said letter is reproduced below :-
“It is hereby clarified that as per Export and Import Policy, 1992-97, the items allowed earlier under OGL or against Exim scrips are allowed to be imported freely without a licence. Licence is required only in respect of specified items included in the Negative List of Imports incorporated in the Export and Import Policy, 1992-97. Hence the items not included in the Negative List of Imports may be permitted freely without a licence especially those items which had been shifted earlier from the Restricted List (Appendix 2.G) to Appendix 3 (Part A and 6) as OGL, as the case may be, prior to the announcement of new policy. It may be further stated that the Buttons, snap and zip fasteners are freely importable without licence and would not be treated as consumer items falling within the scope of Negative List of Imports of the current Export and Import Policy.”
It is seen that clarification has been given in the context of import of Buttons, snap and zip fasteners under the Import Policy 1992-97. The learned consultant pleaded that the import of this letter is that while it clarifies that import licence will be required for import of items under the Negative List of the policy for the year 1992-97 such of those items which were earlier shifted from the restricted list of Appendix 2 in the earlier policy to Appendix 3 Part A and 6 before the announcement of the new policy, could still be imported under OGL. He in this connection pointed out that batteries imported by the appellants figure at Serial No. 597 of Appendix 3 Part A and by virtue of this clarification the goods should therefore be allowed import. He pleaded that as per para 20 of the Import Policy for 1992-97 if any question or doubt in respect of any provisions contained in the policy, the decision of the DGFT on such question or doubt shall be final. He pleaded that based on this clarification of the CCI & E, the Customs Authorities were allowing import of consumer goods and referred us to the order of the Additional Collector of Customs, Madras, bearing No. SIB/20/94 – S8/89/94 SIB, dated 25-3-1994. He pleaded that in the order of the Additional Collector referred to supra, the Additional Collector while dealing with the case of importation of speaker systems has taken note of the clarification given by the CCI & E by his letter F. No. 48 (20)/92-97/IPC, dated 15-5-1992 and has also taken note of the fact that the practice in the Customs House was to allow clearance of such speaker systems used in the Cinematographic Projector. He pleaded that this circular was obviously acted upon by the authorities and based on this clarification consumer goods which appear in Appendix 3 and not specifically mentioned in the Negative Lists were being allowed import. He pleaded that it was only much later by another circular the licensing authorities by superseding their earlier clarification clarified that no consumer goods could be allowed clearance irrespective of the fact that in the earlier policy they were covered by Appendix 3. He pleaded that the appellants’ importation was made during the period when this superseding clarification had not been given. He, therefore prayed that based on the practice that was said to be there even according to the Customs Authorities appellants’ goods should be allowed importation. He also pleaded that the appellants at Bombay were allowed importation of Dura Cell Batteries under OGL and he produced a copy of the Bill of Entry (BE) before us in this regard. In the alternative the learned Consultant pleaded for allowing re-export of the goods. He pleaded that the validity period of the goods in question was very short and the supplier had agreed to take back the goods. He pleaded as it is they have not made payment for the goods as yet. He also referred to a letter dated 20-5-1994 from ENSIGN CONSOLIDATED LIMITED, London, wherein they have stated that the goods were inadvertently supplied as defective.
3. The learned SDR pleaded that the goods are admittedly consumer goods even though there may have been earlier clarifications before the announcement of the policy that consumer goods figuring at Appendix 3, Part II could be imported. In the context of the new policy, the appellants’ goods cannot be allowed import as a ban has been imposed on the import of the consumer goods.
4. We have considered the submissions made by both the sides. There is no doubt that the batteries imported by the appellants are consumer goods. The only point that falls for consideration is whether in the light of the clarification issued by the licensing authorities, the appellants can be allowed importation of the goods under OGL. We observe that the Import Policy 1992-97 carries a negative list and the goods which are figuring under this list can be imported only against licences to be issued by the authorities and the goods cannot be imported in terms of the policy under OGL. In the entire para 156 in Part II of the policy under heading restricted items, the items in list A figure under the heading consumer goods and the description of the items under this heading is set out as under :-
“All consumer goods, howsoever described, of industrial, agricultural, mineral or animal origin, whether in SDK/CKD condition or ready to assemble sets or in finished form”
and the nature of restriction set out against that is as under :
Not permitted to be imported except against a licence or in accordance with a Public Notice issued in this behalf.
As further elaboration for removal of doubts, certain items have been listed under the heading ‘restricted items’ and these are specifically/generally described and are categorized as consumer goods. We observe that the clarification given by the CCI & E has to be read in the context of the provisions in the policy and no clarification can be countenanced to negate the purposes of the policy which has the sanction of the legislature and therefore has the sanction of the law. What is pleaded before us is that the scope of the restricted items under heading ‘consumer goods’ should be taken to have been circumscribed by the so-called clarification given by the licensing authority. The clarification of the CCI & E referred to above, it can be seen, was given in the context of the import of Buttons, snap and zip fasteners and the clarification is signed by the DCCI & E. It not having been signed by the CCI & E or the Director General Foreign Trade cannot have any binding effect as it is. Further we find that as it is, the buttons, snap and zip fasteners though consumer goods by a specific mention under para 156 under the heading at Serial No. 3 are allowed import freely. The clarification given therefore cannot be given a wider import for importation of items other than those specifically covered by it. This clarification has been sent to the Collector of Customs, Madras and also to the licensing authorities. It was not made known to the Public by issue of official trade notice. Any clarification given should be deemed to have been in the context in which it was sought.
Any reference to the items listed in the earlier policy cannot have any bearing on the entries in the new policy and the new policy has to be interpreted based on the entries contained therein. Further, the level at which this clarification has been issued does not create any binding effect in terms of the policy. If a few consignments have been allowed or a letter has been misread by some authority in the Customs House, that cannot make for any policy modification. There is nothing on record to show that the appellants by any public pronouncement by the licensing authorities have been misguided to import the batteries in question. If the appellants’ importation is based on some trade information without any authoritative pronouncement and if they are relying upon any non-official information, the appellants themselves are to blame for having acted on that. In the present case, the goods are admittedly consumer goods and they can be imported only under the authority of import licence. The appellants have produced a copy of the BE in support of their plea that they have imported similar goods at Bombay. This cannot be a guiding factor as to us it appears that it was a mistake on the part of the Customs Authorities to have allowed the import. We observe that the Hon’ble Supreme Court in the case of Union of India v. Rajnikant Brothers observed that “Save and except items which are specifically banned under the prevalent import policy at the time of import, the respondents shall be entitled to import all other items whether canalised or otherwise in accordance with the rules…” and the Hon’ble Supreme Court in their later judgment clarified the observation above in the case of Collector of Customs v. M. Shashikant & Co. reported in 1992 (57) E.L.T. 684 (SC) clarified the position in the following terms :
“Additional licence holders would not be entitled to import the items which are specifically banned under the import policy”
The point that has to be mentioned is that the policy has to be followed in letter and spirit. If the import policy lays down the nature of the goods that are under the restricted list, these items have to be held to be importable under a licence and there cannot be any modification of the policy by a letter clarifying a position in the context of import of certain particular items. We therefore, hold that the learned lower authority has rightly confiscated the goods. However, taking into account the facts and circumstances of the case and also the pleas made, we hold that ends of justice would be met if the redemption fine is reduced to Rs. 1,00,000 (rupeees One Lakh) and the penalty to Rs. 5,000 (Rupees Five Thousand). The appellants’ plea for allowing re-export of the goods cannot be allowed as no facts have been brought to our notice as to how the goods are defective. The appellants’ prayer for re-export therefore cannot be allowed. But for the above modifications, the appeal is otherwise dismissed.