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Issues:
1. Interpretation of OGL-4 Appendix 16 of Import Policy 1983-84 for clearance of goods destroyed in a fire. 2. Legality of the order imposing penalty and directing enforcement of bank guarantee. 3. Challenge to levy of landing charges and additional countervailing duty. Issue 1: Interpretation of OGL-4 Appendix 16 of Import Policy 1983-84 The petitioners, a public limited company engaged in the business of woollen materials, imported goods under OGL-4 Appendix 16 of Import Policy 1983-84, seeking clearance after the goods were destroyed in a fire at the Customs Warehouse in Ludhiana. The customs authority initially declined clearance, leading to a petition under Article 226 of the Constitution. The Additional Collector later held that the goods could not have been imported under OGL-4 Appendix 16, imposing a penalty and directing bank guarantee enforcement. The key contention was whether the replacement goods met the conditions under Appendix 16, particularly regarding the marine insurance policy requirement. The court found the Additional Collector's interpretation erroneous, emphasizing that the insurance coverage continued until goods were cleared by customs, not merely upon reaching Ludhiana town. The court cited a similar case where replacement import was allowed, highlighting the consistency required in such decisions. Issue 2: Legality of Penalty and Bank Guarantee Enforcement The petitioners challenged the penalty and bank guarantee enforcement imposed by the Additional Collector. The court found the Additional Collector's decision flawed due to misinterpretation of the marine insurance policy requirement under Appendix 16. The court emphasized that as long as goods were in transit and not cleared by customs, the insurance coverage remained valid. The court also noted the inconsistency in decision-making, citing a previous case where replacement import was allowed under similar circumstances. The court held that the petitioners were entitled to the benefit of replacement import under Appendix 16, setting aside the impugned order and declaring the replacement import valid. Issue 3: Challenge to Landing Charges and Additional Countervailing Duty Apart from challenging the Additional Collector's order, the petitioners contested the levy of landing charges and additional countervailing duty. The court referenced a previous Division Bench decision, concluding that the department could enforce the bank guarantee for these charges. However, the court rejected the petitioners' challenge on these charges, allowing the department to recover them through the bank guarantee. The court highlighted the importance of adhering to legal provisions and previous court decisions in determining the validity of such charges. In conclusion, the court partially granted relief to the petitioners, setting aside the impugned order regarding replacement import under OGL-4 Appendix 16 while upholding the enforcement of bank guarantee for landing charges and countervailing duty. The court emphasized the need for consistent interpretation of legal provisions and previous court decisions in customs matters.
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