M. Santhanam, Member (J)

1. The appellants imported consignment of Ball Bearing valued at Rs. 86,061/- equivalent to SKF Series 6201 to 6208, 6202 to 6308, 6004 and 6005. They claimed the clearance of goods against stock and sale licence No. 2030871, dated 26-12-1983 issued in terms of para 80(1) of the Import Policy for 1983-84. The said para stipulates that Import licence issued in these cases will be subject to the condition that import of a single item of spares listed under Appendices 3, 4 30 of the Import Policy shall not exceed Rs. one lakh, in value per item and import of other items will not exceed Rs. 10 lakhs in value (c.i.f.). The term "single item" for the purpose of this para will have the same meaning as defined in sub-para 31(2) of the Policy Book. The appellants had earlier imported a consignment of ball bearing covered by Sl. No. 434 of Appendix 3 within the value limit of Rs. one lakh permissible for "single item" of spares. The appellants claimed the release of these bearings falling under Sl. No. 86 of Appendix 4 against the stock and sale licence issued in their favour. The Asstt. Collector issued a show cause notice on 21-1-1986 stating that the appellants had already imported ball bearings against the said licence and that the balance available for bearings was only Rs. 2,409/-. The appellants were called upon to show cause as to why the goods worth Rs. 83,652/- should not be confiscated Under Section 111(d) of the Customs Act read with Section 3 of the Imports Exports (Control) Act and why penalty should not be levied Under Section 112 of the Customs Act.

2. The appellants, in their letter dated 11-2-1986 submitted that for determining the scope of the term "single item", the ball bearings under Sl. No. 434 of Appendix 3 and those falling under Sl. No. 86 of Appendix 4 were to be treated as distinct single items. They contended that the entries in these two appendices had to be treated separately and they should not be clubbed together for ascertaining whether they constituted a "single item" or not. They urged that it would not be proper to combine these two entries under different Sl. Nos. of different appendices to make that they constituted a "single item". After personal hearing, the Dy. Collector did not accept the appellants' contentions. He observed that para 31(2) of the Policy Book clearly stipulated that the item will count as one even if it may be used in various sizes and specifications e.g. ball and roller bearing will be treated as a "single item". As the appellants had already imported ball bearings against the licence, the balance available was only Rs. 2,409/-. He held that the goods were not covered by the licence. He ordered confiscation and gave the appellants an option to clear the goods on payment of fine of Rs. 83,000/-in lieu of confiscation.

3. An appeal was filed before the Collector of Customs (Appeals) Bombay. The appellants submitted that each appendices had to be taken separately for the purpose of determining the single item. According to them, the Dy. Collector had erred in clubbing the two entries on the ground that both these entries referred to ball bearings. The appellants also pointed out that the numbers of bills of entries alongwith Import licences to show that it had been the practice of the Customs House to allow ball bearings falling under different entries under different appendices without clubbing them together. The Collector of Customs (Appeals) did not accept the submissions of the appellants and hence the present appeal.

4. Sh. N.C. Sogani, Consultant drew our attention to para 31(2) of the Policy Book for. AM 1983-84 and argued that there were two conditions mentioned therein. The first condition was that it would constitute a single item though imports may be of various sizes and specifications e.g. ball and roller bearings. The second restriction as per para (c) was, that, a group of items of the same nature having descriptive Heading under the s