Vs.

Judges: S.C. AGRAWAL & G.T.NANAVATI, JJ.

Date of Judgment: Jul 14, 1998

Section 111(m) read with Export and Import Policy, 1988 -91- Appendix 6, List-8, Part I and Industries (Development and Regu-lations Act), 1951 – Items importable under Open General Licence by actual user (industrial)- Definition of “factory” – Jumbo Rolls of Cinematographic Colour Films (Unexposed) included at SI. No. 297 of List 8 – Appellant registered with Director of Indus-tries, for Films (Unexposed) Positive – General permission to import raw material from 1.04.88 -Whether appellant was not actual user (industrial) as mentioned in IDR Act,1951. Held that appellant had a registration certificate to import raw material. Hence goods imported by it was not illegal and liable to confis-cation. It was not necessary for appellant to have a licence under IDR Act for import.

Under Paragraph 56(3) of Chapter 5 of the Policy, actual users were permitted to meet the requirements of their imported inputs under OGL subject to the conditions prescribed in Appendix 6. Consistently with Import and Export Policy for the year 1988-91, the Central Government, in exercise of the powers conferred under Section 3 of the Import and Export Act, 1947, had issued an order on 30th March, 1988 giving general permission with effect from 1st April, 1988 to actual user (industrial) to import raw materials, components and consumables subject to the condi-tions specified therein. A small scale industrial unit could import raw material, components or consumables required by it under OGL on the basis of its industrial licence or registration certificate obtained from the appropriate government authority.

The position under the IDR Act was that unless the scheduled industry was carried on in a factory as defined by the IDR Act, it was not required to take out a licence even though it was an undertaking pertaining to a scheduled industry. The appellant’s industrial undertaking, though engaged in the industrial activity pertaining to the scheduled industry, was not carrying on such industry in a factory as defined by the Act. It was, therefore, not necessary for it to obtain a licence under the IDR Act. It did have a certificate of registration issued by the Director of Industries, Uttar Pradesh. It was sufficient, for the appellant to be called an actual user (industrial), to have a certificate of registration issued by the competent authority. The CEGAT was, therefore, in error in holding that importation of 59 jumbo rolls of Cinematographic Films by the appellant was unlawful and, therefore, liable to confiscation.
(Para 26 & 27)