M/S. PHOENIX INTERNATIONAL LTD. versus COMMISSIONER OF CUSTOMS, DISTT. RAIGAD, MAHARASHTRA

Citation: [2001] SUPP. 5 S.C.R. 377 · Decided: 29-11-2001 · Supreme Court of India · Bench: D.P. MOHAPATRA · Disposal: Dismissed
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Judgment (excerpt)

MIS. PHOENIX INTERNATIONAL LTD. 
v. 
COMMISSIONER OF CUSTOMS, DISTT. RAIGAD, MAHARASHTRA 
NOVEMBER 29, 2001 
[D.P. MOHAPATRA AND K.G. BALAKRISHNAN, JJ.] 
Customs Act, 1962 : 
Section 25( I )-Notification No. 79195-Cus-lssued thereunder-Import 
of 'Printed PVC' (PVC Leather cloth)-Clearance sought as duty free and 
under 'Value Based Advance Licence' Scheme-According to Revenue, the 
imported goods merits classification under heading 6406. J 0-0n appeal, held, 
the 'PVC cloth' is printed and embossed and have all substantial and essential 
characteristics of 'Shoe Uppers'-The printing and embossing work distinctly 
give the patterns of 'Shoe Upper'-Hence, the Tribunal was right in affirming 
the decision of the Revenue. 
The appellant, a manufactnrer and exporter of footwear, obtained a 
'Value Based Advance Licence' (VBAL). The Licence permitted the appel-
lant to import "printed PVC" with technical characteristics of "PVC 
A 
B 
c 
D 
Leather Cloth". He sought clearance of goods described "Printed PVC" as 
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duty free under Notification No. 79/95-Cus. issued by the Central Govern-
ment under Section 25(1) of Customs Act which permitted exemption for 
the whole of the duty of customs for material imported into India against 
VBAL Scheme. The Assessing Officer opined that the goods had all the 
essential characteristics of 'shoe uppers' and it could not be identified as 
PVC Cloth. Hence, a show cause notice was issued to him. 
The Commissioner, after examining the reply, held that the imported 
goods were not just PVC Leather Cloth but something more than that and 
each place was having a pattern of 3 shoe uppers, printed/embossed and 
when cut each of these pieces would be distinguishable and identifiable as 
part of shoe upper, and hence merits classification. Accordingly an order 
of classification was passed under Section lll(m) of the Act, permitting 
redemption of goods. The appellant challenged the order before the Tribu-
nal. The Tribunal upheld the order but reduced the redemption fine. 
Hence this appeal. 
377 
F 
G 
H 
A 
B 
c 
D 
E 
F 
378 
SUPREME COURT REPORTS 
[2001] SUPP. 5 S.C.R. 
It was contended for the appellant that the notification grants com-
plete exemption of all raw material, components, intermediatories etc. 
required for the manufacture of export product which were specified in 
the VBAL; that as the item imported is printed PVC to be used for the 
manufacture of the export product, the same should automatically be 
exempted under the notification. 
It was contended for the respondent that imported item, as per 
sample, was having printing and embossing and hence acquired the char-
acteristic of a part of ''shoe uppers" and therefore it becomes identifiable 
as a part of shoe classified under heading 6406.10. 
Dismissing the appeal, the Court · 
HELD : 1. The PVC Sheet is not a plain sheet but having regular 
pattern and groves are made for cntting into 3 pieces. The pattern is 
clearly distinguishable and if cut through the groves, 3 pattern of shoe 
uppers could be separated. Thus, it could be seen that PVC Cloth has all 
the characteristics of shoe uppers. (380-H; 381-B] 
Abrol Watches Pvt. Ltd. v. Commissioner of Customs, Bombay, (1997] l 
sec 321, held inapplicable. 
2. The 'PVC Cloth' is printed and embossed. It is pertinent to note 
that printing and embossing work is not merely cosmetic in nature to give 
an added appeal to the goods, but they distinctly give the pattern of "shoe 
uppers". Therefore, the Tribunal was right in affirming the decision of the 
Commissioner. (382-B] 
Vareli Weavers Pvt. Ltd. v. Union of India, (1996) 83 ELT 255 SC, 
referred to. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4940 of 1999. 
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From the Judgment and Order dated. 5.5.99 of the Customs Excise and 
Gold (Control) Appellate Tribunal, Mumbai in F.O. No. 1147/C-ll/WZB/99 in 
A.No. C/46-R/99-Bom. 
V. Lakshmikumarnn, Madhava Rao, Alok Yadav and V. Balachandran, · 
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for the Appellant. 
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• 
PHONIX INTERNATIONAL LTD. v. COMMR. OF CUSTOMS [BALAKRISHNAN, l.l 379 
T.L.V. Iyer, K.C. Kaushik, Ms. Nisha Baghchi and B. Krishna Prasad for 
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the Respondent. 
The Judgment of the Court was delivered by 
K.G. BALAKRISHNAN, J. The appellant, a manufacturer and exporter 
of leather and synthetic footwear, obtained a Value Based Advance Licence 
(VBAL) issued in terms of Para 49 of Export Import Policy 1992-93. The 
Licence permitted the appellant to import "printed PVC" with technical char-
acteristics o
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