1997 (5) TMI 220 - AT - Customs

Summary

Issues:
Import of goods categorized as disposal goods under Open General Licence (OGL) policy.

Detailed Analysis:
The case involved an appeal regarding the import of magnetic tapes categorized as disposal goods under the Open General Licence (OGL) policy. The department alleged that the goods were rejects and not entitled to clearance under OGL. The appellant argued that even if the goods were defective, sub-standard, or rejects, they should not be considered disposal goods. The appellant relied on legal precedents to support this argument, emphasizing that the goods were new and not disposal goods.

The Departmental Representative contended that disposal goods are those not of prime quality, containing defects, and not meeting standard price criteria. Both sides presented extensive arguments citing case laws regarding the interpretation of disposal goods under the OGL policy. The Tribunal noted the absence of a specific definition of disposal goods in the policy and Handbook, leading to differing interpretations by the parties.

The Tribunal referred to a decision by the Bombay High Court interpreting the Import (Control) Order, 1955, which distinguished between disposal goods and new goods. The Court held that goods being new, despite not being of uniform type or size, should not automatically be classified as disposal goods. The Tribunal also considered Paragraph 86(1) of the policy, which stated that disposal goods, even if new, would not be treated as new goods under the Import (Control) Order.

In analyzing previous decisions, including R. Maganlal v. CCE, the Tribunal emphasized that goods not of prime quality may still be considered new and not disposal goods. The Tribunal rejected the argument that goods not meeting prime quality standards must be disposal goods, highlighting that various types of new goods, such as seconds, job lots, or stock lots, may not be of prime quality but are not disposal goods.

Ultimately, the Tribunal held that the goods in question, although not of prime quality, were new and not used or second hand. Therefore, the goods were not classified as disposal goods and were permissible for import under the OGL policy. The appeal was allowed, and the impugned order proposing confiscation of the goods was set aside.