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Issues: Interpretation of Import (Control) Order, 1955 - Whether goods imported were new goods or disposal goods under clause 5(3)(iii) of the Order.
Analysis: The petitioners, a partnership concern, were authorized to import stainless steel pipes and tubes under import licences issued to Simco Industries. The goods were purchased from Ebrahim Enterprises and arrived at Bombay Docks in May 1972. However, the Customs authorities raised concerns regarding the nature of the goods, leading to a show cause notice under Section 124 of the Customs Act, 1962, alleging contravention of the Import (Control) Order and Section 111(d) of the Customs Act. The respondents confiscated the goods or offered a fine in lieu of confiscation. The petitioners' appeals were dismissed by the Appellate Collector of Customs and the Government of India, prompting a challenge under Article 226 of the Constitution of India. The central issue revolved around whether the petitioners contravened clause 5(3)(iii) of the Import (Control) Order, 1955, which required imported goods to be new goods unless specified otherwise. The show cause notice alleged that the goods were disposal goods, citing the price paid compared to standard values. However, the petitioners argued that the goods were new and not disposal goods, despite being of mixed variety and purchased as a lot at a lower price. The court agreed with the petitioners, emphasizing that the goods being new was crucial, and the varying sizes did not automatically classify them as disposal goods. The authorities' inference that the goods were disposal goods solely based on mixed sizes was deemed unsustainable and contrary to the Order's plain language. The court found merit in the petitioners' argument, ruling that the goods were indeed new and not disposal goods. The authorities' failure to challenge the newness of the items imported was highlighted, and the order of confiscation was set aside. The petition was successful, and the respondents were directed to refund the fine paid by the petitioners. The judgment concluded without any order as to costs, considering the circumstances of the case and the successful challenge to the confiscation order.
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