Harish Chander, (Vice-President)

1. M/s. Consolidated Petrotech Industries Ltd., formerly Gujarat Carbon Ltd., R.C. Dutt Road, Baroda, have filed an appeal being aggrieved from the order passed by the Collector of Customs (Appeals), Bombay. Briefly the facts of the case are that M/s. Gujarat Carbon Ltd. had imported a consignment of one container declared to contain automatic form, fill and seal packaging machine valued at US $ 140,506.96 CIF vide bill of entry No. 2519/258 dated 1st October, 1987 and had sought its clearance under OGL and had also claimed the benefit of notification No. 125/86. The consignment was examined in the docks twice and the second examination was on the request of the appellants. The examination report and the photographs received from the dock staff revealed that the machine was supplied with gas flushing system but had no vacuumising facility. While, therefore, the importer's claim for OGL was conceded, their request for application of notification No. 125/86 for duty purposes could not be entertained. The Assistant Collector had observed that the imported machine was basically of the FFS type i.e. form, fill and seal machine and in order to qualify for the benefit of entry No. 17 of the notification No. 125/86, the machine was required to have both vacuumising and gas flushing facilities and the machine imported by the importer did not have the facility of vacuumising and as such the benefit of entry No. 17 could not be extended. He had further observed that entry No. 18 which was also claimed for these machines where ready-made flexible packages were packed by a gas flush packing system and the imported machine was basically an FFS machine and the relevant entry for such machine was entry No. 17, which, as explained above, was not available to the importer since all the specifications thereof were not satisfied. The Assistant Collector did not accept the correlation between the licensing policy and the Tariff sought to be explained by the importers in their letter dated 29th January, 1988. The Import Policy and the Customs Tariff flow from two different statutes and the internal constitution of one cannot be, Ipso facto, taken to apply to the other, and the notification had to be interpreted as it was worded. The Assistant Collector had denied the benefit of notification No. 125/86-Cus.

2. Being aggrieved from the order passed by the Assistant Collector, an appeal was filed before the Collector of Customs (Appeals), Bombay. It was contended before the Collector of Customs (Appeals) by the appellant that the imported machine Model No. DP 7D(714) was form, fill and seal packing machine with gas flushing equipment and this machine was required in the course of packing of potato chips. The appellant had requested for concessional assessment under notification No. 125/86-Cus. dated 17th February, 1986 and serial No. 17,18 and 19 of this notification read as under:

Serial No. 17 : FFS with vacuumising and inert gas flushing.

Serial No. 18: Gas flush packing system for flexible packages.

Serial No. 19 : Gas and vacuum packaging system for flexible packages.

It was explained to the Collector of Customs (Appeals) that there were two modes of packing food items in flexible packages. Either packages can be vacuumised or packages should be flushed with inert gas like nitrogen, or carbon dioxide which replaces air and preserve the food article from deteriorating. If the vacuum is created two sides of the flexible package will tend to stick to each other (since the vacuum has been created) and in the process the potato chips will be crushed since they are brittle in nature. Vacuumisation is resorted to in the case of meat products since they cannot be crushed. Moreover, vacuumisation also increases shelf life by at least one month. A copy of the "Time Magazine" which contained an article on packaging entitled "Ship Shape" was also filed. Extract from the said article is reproduced below:

Japanese buyers agree, s