1994 (11) TMI 212 - AT - Customs

Summary

Issues:
Interpretation of ITC Policy 1985-88 regarding import of woollen/synthetic rags under OGL.
Validity of import under OGL based on the condition of goods being completely pre-mutilated.
Misdeclaration of goods as woollen rags instead of synthetic rags.

Detailed Analysis:
The judgment by the Appellate Tribunal CEGAT, New Delhi involved a common question of interpreting the ITC Policy 1985-88 concerning the import of woollen/synthetic rags under OGL. The appellants imported goods described as completely pre-mutilated woollen or synthetic rags under a specific entry in the Import Policy. However, upon examination, it was found that the goods did not meet the condition of being completely pre-mutilated as required by the policy. Consequently, the Department confiscated the consignments and imposed penalties on the appellants (para 2).

The advocates for the appellants argued that a previous Tribunal order in the case of Kakkar & Co. v. Collector of Customs had settled the issue in favor of importers regarding the validity of such imports under OGL. They contended that the goods were capable of being restitched as garments, meeting the policy requirements. On the other hand, the Department sought to distinguish the facts of the present case from the Kakkar & Co. case, emphasizing the need for complete mutilation of the goods and alleging misdeclaration of the imported goods (para 3).

After hearing both sides, the Tribunal found no merit in the Department's arguments regarding the distinction between the present case and the Kakkar & Co. case. The Tribunal referred to the findings in the Kakkar & Co. case, where it was held that the goods, although cut into pieces, were still considered rags and not completely mutilated. The Tribunal concluded that the present case was similar, and the goods imported were also not completely pre-mutilated, as alleged by the Department. Additionally, the charge of misdeclaration was deemed unsustainable as the relevant OGL entry covered both woollen and synthetic rags (para 4).

Based on the precedent set by the Tribunal in previous cases and following the same reasoning, the Tribunal set aside the impugned orders and allowed the appeals in favor of the appellants, providing consequential relief. The decision was made in line with the interpretation of the ITC Policy and the requirement of goods to be completely pre-mutilated for import under OGL (para 5).