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Issues Involved:
1. Interpretation of Paragraph 30 of the Import Trade Control Policy for the year 1977-78. 2. Validity of the seizure of imported marble slabs under the Customs Act, 1962. 3. Rights of the transferee of an REP licence to import goods. Detailed Analysis: Interpretation of Paragraph 30 of the Import Trade Control Policy for the Year 1977-78: The core issue revolves around the interpretation of Paragraph 30 of the Import Trade Control Policy for 1977-78, which governs the rights of REP licence holders to import materials. The court noted that REP licences are freely transferable as per Paragraph 29 of the Import Policy. Paragraph 30(1) specifies that a manufacturer-exporter with an REP licence can import raw materials, components, consumable stores, and packing materials required for use in the licence-holder's factory, subject to the 'Actual User' condition. The court emphasized that the policy does not restrict the import of goods to those related to the exported items. Therefore, the holder of an REP licence can import raw materials for manufacturing any commodity in their factory, regardless of whether these materials are related to the exported goods. Validity of the Seizure of Imported Marble Slabs under the Customs Act, 1962: The seizure of the marble slabs by the 3rd respondent (Assistant Collector of Customs) was challenged. The court criticized the seizure memo for failing to specify under which clause of Section 111 of the Customs Act the goods were liable to be seized, indicating a non-application of mind. The seizure was based on the interpretation that the original licence holder could not have imported marbles, and thus the transferee could not either. However, the court found that this interpretation was flawed, as the REP licence allowed the import of any raw materials required for the transferee's factory, not just those related to the original licence holder's exports. Rights of the Transferee of an REP Licence to Import Goods: The court examined whether the transferee of an REP licence has the same rights as the original licence holder. It was argued that the transferee should be able to import raw materials for their own manufacturing needs, even if these materials were not related to the original licence holder's exports. The court agreed, stating that the language of Paragraph 30(1) permits the transferee, as the new licence-holder, to import raw materials, components, and other items for use in their factory. This interpretation ensures the practical utility of the freely transferable REP licences and avoids placing an undue burden on the transferee to ascertain the specific materials used by the original licence holder. Conclusion: The court ruled in favor of the petitioners, holding that the seizure of the imported marble slabs was unjustified. The interpretation of Paragraph 30(1) allows the transferee of an REP licence to import any raw materials required for their factory, irrespective of the original licence holder's manufacturing needs. The petition was successful, and the respondents were directed to pay the petitioners' costs, quantified at Rs. 1500/-. The order was stayed until 5th February 1990.
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