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Issues Involved:
1. Classification of imported goods as Ivory Board. 2. Validity of the import license for the imported goods. 3. Excessiveness of the fine imposed in lieu of confiscation. Issue-Wise Detailed Analysis: 1. Classification of Imported Goods as Ivory Board: The primary issue was whether the imported goods, described as Tokai Brand White Cardboard, were actually Ivory Board, which would make them ineligible for import under the given license. The Customs authorities initially classified the goods as Ivory Board based on test reports from the Deputy Chief Chemist and the Custom House Laboratory. The Dy. Chief Chemist's report suggested that the goods had characteristics of Ivory Board, including high-quality paper, smooth eggshell finish, and high transparency. However, upon remand, further testing by the Department of Chemical Technology, University of Bombay, and the Institute of Paper Technology, Saharanpur, showed that the goods were highly opaque and not produced by pasting layers, which contradicted the characteristics of Ivory Board. The Tribunal found the Dy. Chief Chemist's opinions inconsistent and noted that the essential characteristic of high transparency was absent. Consequently, the Tribunal concluded that the goods could not be classified as Ivory Board. 2. Validity of the Import License for the Imported Goods: The import license was valid for White Cardboard/Paper and Paperboard, excluding Ivory Board. Since the Tribunal determined that the goods did not meet the criteria for Ivory Board, the license was deemed valid for the import. The Tribunal emphasized that the burden of proof rested on the Department to establish that the goods were Ivory Board, which they failed to do convincingly. The Tribunal also noted that the end-use of the goods (for printing cards) was not a valid criterion for classification under the Import Trade Control (ITC) Schedule. 3. Excessiveness of the Fine Imposed in Lieu of Confiscation: The Collector of Customs had imposed a fine of Rs. 1,50,000/- in lieu of confiscation, which the appellant argued was excessive. The Tribunal did not find it necessary to address this issue separately since the primary finding was that the goods were not liable for confiscation. Consequently, the fine imposed was rendered irrelevant. The Tribunal directed that the sale proceeds of the goods, which had been auctioned by the Bombay Port Trust, be given to the appellants after deducting the sale expenses. Final Order: The Tribunal, based on the majority opinion, concluded that the imported goods were not classifiable as Ivory Board and that the import license was valid for the goods. The order of the Collector of Customs, Bombay, confiscating the goods and imposing a fine was set aside. The appellants were directed to receive the sale proceeds from the auctioned goods after deducting the expenses incurred in the sale.
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