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Issues Involved:
1. Authority to seize 51 bales of mulberry raw silk. 2. Entitlement to use imported material as indigenous material upon obtaining duty exemption entitlement certificate and compliance with conditions. Summary: Issue 1: Authority to Seize 51 Bales of Mulberry Raw Silk The petitioner, a registered partnership firm, sought a writ of mandamus to release 51 bales of 100% mulberry raw silk seized by the customs authorities. The petitioner argued that the seizure was without jurisdiction and illegal. The petitioner had imported 60 bales of mulberry raw silk under an advance import licence, transported them from Bombay to Bangalore for manufacturing and export purposes, and claimed compliance with the licence conditions. The respondents contended that the petitioner violated the actual user condition of the licence by transporting the bales from Bombay to Bangalore. They argued that the customs authorities had jurisdiction under the Customs Act, 1962 to seize the goods due to this violation. The court noted that the import licence and duty exemption entitlement certificate specified the conditions, including the actual user condition, which required the imported material to be used at the specified place of manufacture (Phagwara). The court concluded that the petitioner violated the actual user condition by transporting the goods to Bangalore without permission. Therefore, the customs authorities had the authority to seize the goods under section 111 of the Customs Act, 1962. Issue 2: Entitlement to Use Imported Material as Indigenous Material The petitioner argued that upon obtaining the duty exemption entitlement certificate and complying with the conditions, it was entitled to use the imported material as indigenous material free from any control or restriction. The court examined the conditions under the advance licence scheme and the relevant notifications issued under section 25 of the Customs Act, 1962. The court emphasized that the importation of material under the advance licence scheme was subject to actual user conditions, which required the material to be used at the specified place of manufacture and for the specified purpose. The court rejected the petitioner's contention, stating that compliance with export obligations did not entitle the petitioner to use the imported material contrary to the conditions of the licence and the notification. The court referenced relevant case law, including the Supreme Court's decision in Abdul Aziz v. State of Maharashtra, which supported the view that contravention of the conditions of the licence amounted to contravention of the provisions of the Imports (Control) Order, 1955. The court also noted that the customs authorities had the power to ensure compliance with the conditions of the notification and seize goods in case of contravention. Conclusion: The court dismissed the petition, holding that the customs authorities had jurisdiction to seize the goods due to the violation of the actual user condition. The petitioner's entitlement to use the imported material as indigenous material was subject to compliance with the conditions of the advance licence and the relevant notification. The court clarified that its opinion on jurisdiction did not affect the merits of the case, which would be decided in accordance with law.
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