1985 (2) TMI 270 - AT - Customs

Summary

Issues Involved:

1. Whether the imported goods should be classified as "disposal goods."
2. Legitimacy of the import license for the goods.
3. Compliance with Import Policy and Customs Act.
4. Validity of the Collector's order of confiscation and fine in lieu of confiscation.
5. Applicability of the Bombay High Court judgment in a similar case.

Issue-wise Detailed Analysis:

1. Classification as "Disposal Goods":

The primary contention revolves around whether the imported goods, which were packed in Russia 7-8 years prior to their importation, stored in Australia, and shipped to India, should be classified as "disposal goods." The Collector of Customs, Cochin, held that the goods were "disposal goods" based on their age, the manner of supply, and the comparatively low value, which indicated they were not sold as per normal business rules. However, the Central Board of Excise and Customs found no evidence to support the conclusion that the goods were "disposal goods" and noted that the goods were new and unused.

The Tribunal referenced the judgment of the Bombay High Court in Abdul Husein Mohammedally Master v. Union of India, which stated that "disposal goods" must be read in contrast to "new goods." The High Court held that if the goods are new and unused, they cannot be classified as "disposal goods" merely because they are not of uniform type and size. The Tribunal concluded that the goods in question were new and thus did not qualify as "disposal goods."

2. Legitimacy of the Import License:

The Collector of Customs argued that the import license produced was not specifically endorsed to cover "lot goods" and that the goods were not new as per Appendix 30 of the Import Policy for AM 1978-79. However, the Tribunal found that the goods were indeed new and unused, thereby falling within the scope of the import license.

3. Compliance with Import Policy and Customs Act:

The Tribunal examined whether the importation complied with the Import Policy and the Customs Act. The goods were imported under a valid license and were new, thus complying with the Import Policy. The Tribunal also noted that there was no evidence to suggest that the goods were imported at a lower price than similar goods, which would have indicated they were "disposal goods."

4. Validity of the Collector's Order of Confiscation and Fine:

The Collector ordered the confiscation of the goods under Section 111(d) of the Customs Act, 1962, read with Section 3(2) of the Import and Export (Control) Act, 1947, but allowed them to be redeemed on payment of a fine. The Tribunal found that the Collector's order was based on an incorrect classification of the goods as "disposal goods" and thus set aside the order of confiscation and the fine.

5. Applicability of the Bombay High Court Judgment:

The Tribunal heavily relied on the Bombay High Court's judgment in Abdul Husein Mohammedally Master v. Union of India, which clarified the definition of "disposal goods." The High Court's ruling that new and unused goods cannot be classified as "disposal goods" was directly applicable to the present case. The Tribunal found that the goods in question were new and unused, thus not "disposal goods."

Conclusion:

The Tribunal concluded that the goods were not "disposal goods" and were covered by a valid import license. The order of confiscation and fine imposed by the Collector was set aside. The appeal in No. 37/82 was allowed, granting consequential relief to the Company. The notice issued to M/s. Rajan Trading Company in Appeal No. 203/81 was discharged.