ORDER
K. Gopal Hegde, Member (J)
1. These appeals arise as under :
Against two orders-in-original, the appellants preferred two appeals before the Central Board of Excise and Customs. The Board vide order No. 1088-89 of 1980, dated 28.12.1980 disposed of both the appeals by a common order. The appellants filed a revision application against the said order of the Board. The revision application after the constitution of the Tribunal statutorily stood transferred to the Tribunal and treated as appeal. Since the appellant was required to file two revision applications, the appellant was given an option either to restrict the revision application filed by him to one of the appeals before the Board or to file a supplementary appeal with a formal application for condonation of delay. The appellant exercised the option of filing a supplementary appeal and also filed an application for condonation of delay. The delay condonation application was allowed and the supplementary appeal was admitted.
1. The brief fact necessary for the disposal of this appeal may be stated as under :-
The appellants M/s. Saurashtra Chemicals imported two consignments of Turbine Driven lubricant oil pumps and motor driven vertical lubricating oil pump as spare parts for turbine coupled to AXI Compressor and sought clearance under OGL Item 10 of Appendix 10 of the policy AM 80. The customs however objected to the clearance on the ground that the goods imported cannot be treated as spares and it required valid ITC licence. The Collector of Customs, Bombay who held the adjudication ordered confiscation; but allowed redemption on payment of a fine of Rs. 50,000/- in respect of each. Feeling aggrieved, as stated earlier, the appellants preferred two appeals before the Board and the Board while upholding the order of confiscation, reduced the fine in lieu of confiscation from Rs. 50,000/-to Rs. 20,000/- in both cases.
2. When these appeals were taken up for consideration, Shri Desh-pande, appellants learned advocate contended that the goods imported were required to replace the components of their imported plant machinery and therefore they satisfied the definition of the term ‘spares’. The Collector on improper consideration of the policy had ordered confiscation and the Board equally committed an error in not setting aside the order of confiscation. The Board ought to have fully remitted the fine in lieu of confiscation. Shri Deshpande submitted that the spares imported by them are permissible spares. In that connection Shri Deshpande relied on the Public Notice No. 33-ITC(PM)/80, dated 19.8.1980 which contained a list of non-permissible spares. It was contended by Shri Deshpande that pumps became non-permissible by the Public Notice dated 19.8.1980. But then the import and the indent for import took place prior to 1980 and as such the public notice is not applicable. Shri Deshpande therefore prayed that the appeals may be allowed and fine in lieu of confiscation may be set aside.
3. Shri Pal appearing for the Collector however, submitted that the orders passed by the authorities below are correct and they did not require any interference. He added that the pumps imported are not spares. They are complete units with prime movers one with turbine and another with motor. Shri Pal referred to the definition of the expression ‘spares’ as well as ‘parts’ appearing in the Policy AM 80. He contended that what had been imported is not a sub-assembly but it is a complete assembly. He urged that the goods specified the definition of capital goods. Shri Pal also relied on Chapter 84 of CCCN. Shri Pal further submitted that the observation of the Board is based on equitable consideration. The equitable consideration has no place in the interpretation of a taxing statute. In that connection Shri Pal relied on the decision of the Supreme Court reported in AIR 1961 S.C. 1047. Shri Pal further submitted that the subsequent policy only clarified what is meant by permissible spares and non-permissible spares and it has no relevance. As the appellants were not the manufacturers of the equipment they cannot be permitted to import components under OGL. He, therefore, prayed that the appeals may be rejected.
4. The short point for consideration is whether the order passed by the Collector and confirmed by the Board requires to be interfered with. There is no dispute as to the nature of the goods imported by the appellants. One of the consignments contained Turbine Driven Lubricant Oil pumps and another contained motor driven vertical lubricating oil pump. It was the contention of the appellants that the pumps which they had imported were required to replace the similar parts of their plant which they had earlier imported. The appellants therefore contended that what they had imported are spares and, therefore, they are entitled to clear the goods under OGL. The Collector, however, held that they are not spares and, therefore, they required ITC licences. In his order the Collector had observed that the pumps are capable of universal application and not a part or sub-assembly of the plant. He had further observed that from the reply to the show cause notice, it is evident that the pumps are stand-by equipment. He had also observed that the lubricating oil pump is mounted by the side of the compressor and is driven by an independent turbine motor. The electrical motor driven pump now imported is a stand-by for this ancillary pump. It is a self-priming one. It automatically starts in case of failure of steam turbine pump. Thus the steam turbine pump which is an independent unit cannot be considered as a sub-assembly or part of the AXI compressor. The same is the case with the motor driven pump.
5. The observation of the Board was “the Board however, has a lurking feeling that even though on a strict interpretation of the definitions of ‘Capital goods’,’Spares’ and ‘Parts’, the pumps in question cannot be considered as ‘Spares’, it cannot after all be denied that these pumps are essential for the working of the plant, and as such can even lay a claim to be considered as essential parts”.
6. If the Collector’s observation is correct, then the contention of Shri Deshpande that the goods imported were required to replace the components of their imported plant machinery cannot be accepted. The Import Policy for spares is laid down in Chapter 9. Paragraph 55A(i) reads “they (Actual Users) will be permitted to import under OGL permissible spares, i.e. all those parts required as spares other than the items appearing individually in the banned list and which are required by them for operation and maintenance of the capital goods including accessories, ancillary equipments, control and laboratory equipments and safety appliances, installed or in use by them as on 1.4.1979”. To qualify as a spare, the goods should be required by the Actual Users for operation and maintenance of the capital, goods. From the Collector’s observation it is clear that the pumps are not the parts of the compressors which is the capital goods. If that be so, the pumps would not qualify as spares. The appellants have not produced the catalogue or any lete-rature of the manufacturer in support of their contention that the original plant or machinery which they had imported had the pumps of the types imported by them or that the pumps were integral parts of the originally imported machinery. In the absence of such an evidence the contention of Shri Deshpande that the goods imported were required as replacement of similar parts of the originally imported plant or machinery cannot be accepted. Since the pumps do not qualify as ‘spares’, the Collector and the Board were justified in holding that the import was not permissible under OGL and that it required specific licence.
7. Though the Collector had imposed a fine of Rs. 50,000/- in lieu of confiscation, the Board had reduced the fine to Rs. 20,000/-. No further leniency is called for. I, therefore, reject this appeal.