The interpretation and applicability of policy provisions and clarificatory circulars in relation to import regulations.

ORDER :

Ashok Bhan, J. - These appeals [C.A. Nos. 2778-22780/2001] under Section 130-E of The Customs Act, 1962 (for short "the Act") have been directed against the Final Order passed by the Customs, Excise and Gold (Control) Appellate Tribunal, West Regional Bench at Mumbai [ for short "the Tribunal"] in Final Order No.C-II/2562- 64/WZB/2000 dated 18th September, 2000 in Appeal Nos. 489, 493, 495-R/2000-Mum. whereby the Tribunal allowed the appeals of the Respondents-Assessees [herein after referred to as "the Assessees"].

2. This batch of appeals is being taken up for disposal by this common order as the point involved in all these appeals is identical except with little variation.

3. The assesses imported "Dried Garlic" (Chinese White). Some of the assesses approached the sellers-exporters at Singapore. At the time when the contracts were entered into sometime in July, 1999, the position was reported to be that Dehydrated Garlic Powder, Fresh Garlic and Dried Garlic were importable freely, i.e., covered under the Open General Licence (OGL) category and therefore no licence was required for importation of such goods. This is clear from the policy provisions contained in EXIM Policy 1997-2002, namely, the ITC(HS) Classification of Export and Import Items which reads as under:

"071290 02 Dehydrated garlic powder Free., 071290 03 Dehydrated garlic flakes Free., 071290 04 Dried garlic Free"

4. Subsequently, the Director General of Foreign Trade (DGFT) authorities on 17th September, 1999 examined the matter and issued a clarification by Policy Circular No.32(RE-99)/200) of even date clarifying that "Dried Garlic" classified under EXIM Code No.071290.04 of ITC(HS) Classification 1997-2002 would be treated as Dried Garlic provided the moisture content thereof does not exceed 10% irrespective of the method of drying. This policy circular was signed by the Joint Director General of Foreign Trade with the approval of the Director General of Foreign Trade.

5. On the basis of the said circular, the Customs authorities objected to the import of goods which were imported sometime in the last week of August, 1999 and for which the contracts were entered into and also the Letters of Credit opened much earlier.

6. Various show cause notices were issued to the assesses proposing to take action under Sections 111(d), 111(m) and 112(a) of the Act. The parties were heard. Goods were examined at first check basis and sealed samples were called for in spite of the goods cleared after examining the samples. The moisture contents were found to be more than 10% by weight.

7. On the basis of the representations and the personal hearing, the adjudicating authority, i.e, Commissioner of Customs, confirmed the show cause notice and held that there was violation of Sections 111(d) and (m) read with Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992. The authority in original imposed penalties at various sums and also imposed redemption fines at various quantum.

8. Aggrieved against the aforesaid order passed by the authority in original, the assesses filed the appeals before the Tribunal.

9. The Tribunal accepted the appeals and set aside the order in original, holding that since the contracts had been entered into sometimes in July, 1999 and the Letters of Credit opened in pursuance thereto sometimes in August, 1999, the clarification issued by the DGFT on 17th of September, 1999 could not apply to the cases of the assesses with retrospective effect. That it was also held that the clarificatory circular issued on 17th September, 1999 could not be issued by the DGFT. That the Circular could only be issued by the Central Government as per Sections 5 and 6 of the Foreign Trade (Development & Regulation) Act, 1992.

10. Against the aforesaid order passed by the Tribunal, the Revenue has filed the present appeals.

11. Prima facie, we find the findings recorded by the Tribunal on questions of law to be correct. But, we notice that in some o