Judgment

S.RANGANATHAN, J.

(1) ON 28/11/1981, the appellant company applied for a licence to import, inter alia, components of plain paper copiers, the manufacture of which was to be started by them shortly under the agreement of technical collaboration with the Nashua Corporation, USA. The CIF value of the licence applied for was as follows :

Item

Value

Value

Rs (in millions)

Rs (in crores)

(i)

Components

28.800

2.8800

(ii)

Accessories

1.007

0.1007

(iii)

Consumables

14.172

1.4172

Rs 43.979

Rs 4.3979

The details of the components to be imported were set out in an Annx. to the application divided into 12 groups. The one item around which the controversy mainly centres is Serial No. 12. The component was described as "copier frame" in the group "Main Motor Assembly, Magnetic Clutch Assembly, Control Unit, Power Source Section". 1500 numbers of this component valued at Rs. 1,27,42,368.00 (1.27 crores) were sought to be imported. The government granted a licence on 30/09/1982 for import of items valued at Rs. 3.73 crores, the Annx. to which classified the item described above thus :

S. No.

Component Group

17

Main Motor

18

Magnetic Clutch

19

Power Board Section

24

Control Unit

The value of these and other components to be imported as given by the appellant was left undisturbed. In other words, the appellant was allowed to import components of the above description valued at Rs. 1.27 crores out of a total licence value of Rs. 3.73 crores (roughly 34 per cent). The appellant made a revalidation application on 27/07/1984, seeking to import components, accessories and spares, of the value of Rs. 1.58 crores. Of these 900 nos. were to be of the component "Copier Frame" falling under the above groups and valued at Rs. 71,14,534.00 roughly 53 per cent of the total value of the imports applied for. However, the value of the licence granted was restricted to Rs. 80 lakhs which included 589 nos. of "copier frame" of the value of Rs. 28,22,870.00 (roughly 34 per cent). In short, the value of the item "copier frame" permitted to be imported by the appellant, constituted about 34 per cent of the total value of either licence.

(2) WHEN the goods were eventually imported, the Collector of Customs came to the conclusion that there were various violations of the terms of the licence. He passed four adjudication orders in respect of four items of import by which he imposed the following heavy penalties and fines in lieu of confiscation :

No.

Amount of fine

Amount of penalty

Rs

RS

1.

4,00,000

(3,00,000)

50,000

(37,500)

2.

15,50,000

(11,50,000)

2,00,000

(1,50,000)

3.

4,14,067

(3,00,000)

25,000

(18,500)

4.

15,00,000

(11,25,000)

2,00,000

(1,50,000)

[N.B.: The figures in brackets represent the amounts of fine and penalty as reduced on appeal by the tribunal]

(3) THE four orders of the officer are on similar lines. He found

(I) that the appellant had imported a number of items (as per the list in the licence) in complete assembly with the main frame;

(II) that they had imported a number of "mounted PCB assemblies (including main control unit), lens system, halogen lamps, autotransformer units, power supply unit, exit rollers, drum shafts, blowers, motors, gears, capacitors relays" and many other innumerable small parts which cannot be arranged and identified straightway, which are not shown in the list attached with the licence and which cannot be considered to be part of the main frame itself as claimed by the appellant; and

(III) that they had imported 100 per cent of the parts of the photocopying machine out of which 70 per cent are assembled together with the main frame and the balance of 30 per cent can be assembled very quickly without any serious effort.

In short, the charge was that the appellant had virtually imported complete photocopier machines whereas they were permitted to bring only 52 specific non-electronic parts. He pointed out that this was contrary to the phased development programme (PDP) und