Not A Definitive Approach

"Consumer goods means any consumption goods which can directly satisfy human needs without further processing and include consumer durables and accessories thereof.

This definition is rational and cannot be termed as artificial, though in law even an artificial definition is acceptable. There are judgements as in the case of Saiffuddin vs Asst Commissioner of Sales Tax 1976 (38) STC 463 (Cal) wherein the Calcutta high court ruled that even if the definition given in the statute was artificial, it was still binding. Therefore, if there is a controversy about correct definition, one has to proceed on the basis that this definition of consumer goods. However, if this definition is taken as the guiding factor, there are large number of items that have been termed as consumer goods in the latest policy. These are not actually consumer goods going by the given definition. They have been made "restricted which means that a licence has to be issued to the importers. Without a licence these items cannot be imported into India.

 

Earlier, the customs and port officials used to pass a large number of goods which were not consumer goods without a licence. Even those goods have been termed as "restricted in the present policy. As a consequence, a large number of commodities which were otherwise being released by customs without licence require one now.

The commerce ministry has committed a legal error in the latest import policy by calling categorising many commodities as consumer goods and also by saying that these are restricted because they are consumer goods. Goods termed as consumer goods have to be guided by the definition in the import policy. Therefore, if a particular item does not fall under that head, it would be wrong to term it so. It would amount to an exercise in excess of jurisdiction.

The following items have been called consumer goods and have been restricted although they do not fall in that category: Plastic packing for accommodating connectors for various types; Asbestos cement pipes, bricks, building bricks, roofing tiles, cubes and similar articles, whether or not rectangular, the largest surface areas of which is capable of being enclosed in a square, the side of which is less than 7 cm; Paving blocks, slabs, bricks, squares, tiles and other articles of pressed or moulded glass for building or construction purposes; Barbed wire of iron or steel; Twisted hoop/single flat wire barbed or not and loosely twisted double wire used for fencing; Endless bands for machinery, of stainless steel; Screws, bolts, nuts, coach-screw and similar articles of iron and steel; Radiators for central heating; Finished and semi-finished steel forgings; Paper laminating machine; Manganese dioxide; Mercuricoxide; Silver oxide; Airzine; EPAPX; Integrated watch cases and straps above Rs 3,500 (CIF) per unit.

By analysing the above list a few implications can be arrived at. The first is that the import policy calls things consumer goods under a notion that free import of them will ruin the economy. This is a mistaken notion. On the other hand, if importers of these goods are made to approach the commerce ministry for issuance of licence, their imports will be delayed and the progress and growth of the economy will suffer. Second, it will bring back the licence raj. Third, the import olicy is now more restricted than before.

Customs officials in all the ports admit that they had been passing many more items as non-consumer goods. But all of them have now become consumer goods. The bureaucracy and the minister may not have consciously agreed to the idea of further restricting goods in the liberalised era, but the policy is in any case anti-liberal. Therefore it is necessary that the higher levels of bureaucracy and the minister had close look at it.

There are many cases where consumer goods have not been restricted (like motorboats used for sports "" 89039200.10 and stop watch 9109102). Conversely, there are many cases where obvious consumer goods like cars have not been termed so and yet are restricted. This seems to be the right kind of policy. In fact, there is no need to write "consumer goods against individual items. It is the commerce ministry's legal right to restrict the import of something if necessary. There is no need to invite legal wrangling by calling them consumer goods.

(The author is former member of the Central Board of Excise and Customs)