1990 (2) TMI 151 - AT - Customs

Summary

Issues:
1. Interpretation of Import and Export Policy regarding synthetic rags importation.
2. Confiscation under Section 111(d) of the Customs Act, 1962.
3. Redemption option under Section 112 of the Customs Act, 1962.
4. Comparison with a previous judgment in Kakkar & Co. v. Collector of Customs, New Delhi.
5. Applicability of the judgment from the Hon'ble Supreme Court in relation to the current case.

Analysis:
1. The case involved the importation of synthetic rags by M/s Laxmi Woollen Mills under OGL, Appendix-6, List 8, Part-1, Item No. 418, assessed under chapter heading No. 63.10. The goods were found to be cut into two pieces instead of being pre-mutilated as declared, leading to a dispute on whether they qualified under the Import Policy.

2. The adjudicating authority ordered confiscation of the goods under Section 111(d) of the Customs Act, 1962, stating that a specific license was required for clearance due to non-compliance with the Import Policy. An option for redemption was provided with a fine and penalty under Section 112 of the Customs Act, 1962.

3. The appellant challenged the order, citing their status as actual users and referring to a previous judgment in Kakkar & Co. v. Collector of Customs, New Delhi, where similar goods were deemed acceptable under the Import Policy. The appellant sought acceptance based on this precedent.

4. The Tribunal considered the facts and the earlier Supreme Court judgment related to Kakkar & Co. case, where it was established that the goods, although not completely mutilated, were still considered rags and eligible for importation. The Tribunal upheld the previous ruling and set aside the fine and penalty imposed on M/s Laxmi Woollen Mills, allowing the appeal.

5. By following the Supreme Court's decision and the precedent set in the Kakkar & Co. case, the Tribunal concluded that the importation of synthetic rags by M/s Laxmi Woollen Mills fell within the Import Policy guidelines. Consequently, the fine and penalty were revoked, and the appeal was allowed, directing the revenue authorities to implement the decision accordingly.