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Challenge to orders passed by customs authorities regarding confiscation of imported goods described as woollen rags. Analysis: The petitioner, a partnership concern engaged in manufacturing textiles, exported goods earning foreign exchange. The government policy allowed Small Scale Industries to import foreign goods up to 70% of the exported value. The petitioner imported goods through the State Trading Corporation, including rags for manufacturing textiles. Some rags were stored at a sister concern's premises due to space constraints. Customs officers seized these rags, alleging they were woollen garments of foreign origin, leading to confiscation orders and penalties. The petitioner argued that the seized goods were legally imported woollen rags, consistent with their import entitlement. The absence of a statutory definition of rags in 1972-73 required reliance on trade meanings. The Appellate Collector noted the seized items as woollen garments, but the seizure memo described them as woollen rags. The petitioner's legal importation history of woollen rags through the State Trading Corporation supported their claim. A similar case in the Bombay High Court emphasized interpreting items based on trade understanding rather than post-importation use. The judgment highlighted the importance of trade definitions and the petitioner's compliance with import regulations. The court agreed with the petitioner's argument that the seized goods were woollen rags, not second-hand clothing. The court rejected the customs authorities' classification, emphasizing the trade's understanding of the term "woollen rags." The judgment criticized the authorities for misinterpreting the import license conditions and failing to consider trade practices in determining the nature of the imported goods. Ultimately, the court allowed the writ petition, quashing the orders of confiscation and penalties issued by the customs authorities. The judgment reinforced the significance of trade meanings in interpreting imported goods and upheld the petitioner's right to import woollen rags within the regulatory framework.
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