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TMI Blog1988 (3) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... ction for the clearance. 3. In respect of the consignment which had been cleared for warehousing the Collector exercised his revisional power under Section 130 of the Customs Act as it then stood and issued a review notice calling upon the appellants as to why the clearance earlier granted should not be cancelled and why goods should not be confiscated and penalty should not be imposed. In respect of the subsequent two consignments also show cause notice was issued as to why the goods should not be confiscated and penalty should not be imposed. 4. The importers appeared to have approached the High Court of Judicature at Bombay by filing a Writ Petition No. 231 of 1982. Ultimately the High Court appeared to have directed the appellants to file their replies to the show cause notices and the Collector was directed to complete the adjudication by 31.3.1982. The deadline was extended to 19.4.1982. 5. The main objection raised by the Customs Authorities the import of raw material by Actual User under O.G.L. 1 of 81 dated 3.4.1981 should be in accordance with the Registration Certificate or the Industrial Licence held by them. The appellants held a Registration Certificate dated 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough the order of the Collector. He referred to the Export Commissioner s opinion which the Collector himself has referred to in his order, the Textile Commissioner s Notification, the opinion of the Law Department and the Public Notice issued by the licensing authority. Shri Bharucha contended that the Collector was totally unjustified in ignoring the Textile Commissioner s notification, Law Department s opinion, Export Commissioner s affidavit in a court of law and the Public Notice issued by the Licensing Authority. 10. Shri Mondal appearing for the Collector, however, supported the order passed by the Collector. He particularly referred the requirments of the Policy namely that the import of raw material by an Actual User under O.G.L 1 of 81 of 3.4.1981 should be in accordance with the Registration Certificate or the Industrial Licence held by them. Shri Mondal for the reasons stated by the Collector in his order, contended that Polyester Filament Yarn imported by the appellants cannot be considered as raw material for the manufacture of the textile in respect of which the Industrial Licence was issued. 11. We have considered the submissions made on both the sides and per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and/or weaving section upto a certain quantity, which was subsequently raised on 16.9.1963 and 25.9.1964. The Collector brushed aside the Circular by observing This Circular is not germane to the issue, as cotton textile mills can use fibres as it can be blended with the cotton fibre. Fibre is not filament yarn. The Collector then refers to the clarification of the Textile Commissioner stated in letter dated 1.10.1980. The Collector s observation reads : The Textile Commissioner has clarified Further, 23(1) units can continue to use filament yarn in the weft only . This is a clear permission given to the cotton textile mills to use filament yarn in the weft and I desired to know from the Textile Commissioner whether there was any statutory notification issued in this regard. The Textile Commissioner was pleased to intimate to me in his letter No. ASD/9/81/138/3849, dated 9.11.1981, that this permission was given on an interpretation of para 7(C) of the Textile Commissioner s Notification No. TCS 1/20, dated 22.9.1949, which was continued in the Notification No. CERR/2/72, dated 15.4.1977, under para 6 thereof. It appears that the matter was referred to the Ministry of Law, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 955, would apper to come to my rescue. It says that nothing in the order shall apply to the import of any goods covered by an executive instruction issued by the Chief Controller of Imports Exports to the Customs Authorities. Though the wording of the Public Notice does not appear to make it an executive instruction, I would have to treat it as one in view of the clear direction given therein. Such an interpretation would be well in accordance with the law. I would, therefore, treat this Public Notice as an executive instruction application to all the imports till the date of issue unless the Chief Controller of Imports Exports directs me not to do so. In my view, the matter would require further deeper consideration by the authorities concerned, and if it is the intention to permit the import of Polyester Filament Yarn for all cotton textile mills, without any restriction, there has to be a specific provision as legally otherwise they are not eligible to import such yarn. I would conclude by requesting the Chief Controller of Imports Exports, through this order, to consider this aspect fully" 18. The Collector after referring to the requirement of registration of contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tile Commissioner has further clarified that polyester fibre yarn can be used in the weft, by the units registered under entry 23 of the First Schedule to the I.D.R. Act. If the Industries dis-obey the direction of the Textile Commissioner they would be inviting action against them. When that being the case the Collector who interprets the provisions of the I.D.R. Act and the Schedule to the Act should be guided by the circular instructions of the Textile Commissioner. He should respect those circular instructions rather than hazarding the interpretation of an entry of the Schedule to the Act solely on the basis of the American Authority referred to by the Collector. It is not merely the Textile Commissioner who had issued circular instructions that certain percentage of polyester filament yarn should be compulsorily used in the weft the Export Commissioner Shri Rekhi in his counter-affidavit filed by some of the mills challenging the Textile Control Order also took the view that the expression any other material used in the definition of cloth in clause 3(a) of the Cotton Textile (Control) Order, 1948 would refer to . Polyester Filament Yarn. The Hon ble High Court of Bombay rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector, in our opinion, committed a grave error in not accepting the Textile Commissioner s circular; in not respecting the Union Law Ministry s opinion, In treating the Public Notice as non-statutory and in ignoring the counter affidavit filed by the Export Commissioner before the Bombay High Court. 24. Since the I.D.R. Act even according to the Collector did not contain any definition, and when the Collector therefore rightly relied on the Cotton Control Order he ought to have accepted the interpretation of that order by the Law Ministry, the Textile Commissioner, the Export Commissioner. Their interpretation was deemed to have been accepted by the Bombay High Court when it dismissed the Mill Owners Writ Petition. 25. If a statutory Notification, viz. The Cotton Control Order recognises the use of Polyester Filament Yarn by the units registered under Item 23(1) the Collector cannot take a view that PFY is not a raw material for the units registered under Item 23(1). The Collector s order therefore requires to be set aside. 26. The above part, the power conferred on the adjudicating authority is to adjudge confiscation and/or to impose penalty. If the adjudicating authority f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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