1987 (12) TMI 225 - AT - Customs

Summary

Issues:
1. Interpretation of OGL under I.T.C. Policy for import of broken pearls.
2. Classification of goods under Tariff Heading 71.01 or Chapter 5.

Analysis:

Issue 1: Interpretation of OGL under I.T.C. Policy for import of broken pearls:

The appeal concerns whether broken pearls, not in powder form but of non-jewellery quality, fall under the Open General Licence (OGL) under Appendix 6, List 4, Part B, Sl. No. 8 of the I.T.C. Policy or require an Import Control Licence as per Sl. No. 388(a) of Appendix-3(A) of I.T.C. Policy. The contention revolves around the interpretation of Footnote (ii) in Appendix 6 List-4 Part B, specifically whether the requirement of "only in powder form and of non-jewellery quality alone" allows import of pearls that are either in powder form or of non-jewellery quality. The appellant argues that the conjunction "and" should be read as "or" to avoid redundancy in the expression. The Tribunal agrees with the appellant's interpretation, allowing import of pearls under OGL irrespective of whether they are in powder form or of non-jewellery quality.

Issue 2: Classification of goods under Tariff Heading 71.01 or Chapter 5:

Regarding the classification of the goods, the lower authorities classified the broken pearls under Chapter 5 as products of animal origin "not elsewhere specified or included," excluding them from Tariff Heading 71.01, which covers real pearls. However, the Tribunal disagrees with this classification, emphasizing that the goods under import are indeed pearls, as described in the invoice and Examination Report. The Tribunal asserts that Chapter 71 does not exclusively cover jewellery-quality pearls, citing examples of other items within the chapter meant for non-jewellery purposes. As the imported goods are raw and unworked pearls, they qualify for the benefit of Notification 247/76, dated 2-8-1976. The Tribunal sets aside the lower authorities' decision and allows the appeal, granting consequential relief to the appellants.

In conclusion, the Tribunal's judgment clarifies the interpretation of OGL for broken pearls and resolves the classification issue under Tariff Heading 71.01 or Chapter 5, providing a detailed analysis of the legal arguments and evidence presented by both parties.