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TMI Blog1997 (4) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... the remaining goods are correctly classifiable under sub-heading 63.10 and not found eligible to confiscation and be realised without any action. 3. He has passed a similar order in respect of Bill of Entry No. 3, dated 9-8-1988 in respect of import of similar items. Further he has granted redemption on payment of fine of Rs. 20,000/- in view of confiscation. In respect of second Bill of Entry, he has held that the fine is in addition to the duty liability of such goods under Tariff Heading 63.09 of the Customs Tariff Act. 4. It is stated by the appellants that they are engaged in the production of Shoddy Woollen Yarn, manufactured out of imported woollen rags/synthetic rags/shoddy wool in comparely pre-mutilated form were permitted for import by Actual Users (Industrial) under OGL vide Appendix 6 List 8 Part-I Sl. No. 418 of Vol. I of ITC Policy for 1985-88 and thereafter under the Import Trade Control Policy for 1988-91 vide Appendix 6 List 8 Part-I Sl. No. 626 of Volume I of the ITC Policy. It is stated by them that they entered into a contract with M/s. Textile Fibres Agency, Heliopolis, 157-A, Colaba Road, Bombay under Contract No. KB/582, dated 10-2-1988 for supply of wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey entered into a contract in February, 1988 and had opened the Letter of Credit also on 24-2-1988 much prior to the changing of the norms specified on 8-6-1988. On arrival of the goods, the same was examined by the Mutilation Team consisting of the representatives of Textile Commissioner and the Joint Controller of Imports and Exports as per the procedure laid down by the Ministry of Finance vide their letter dated 4-6-1979 along with the officers at Coimbatore Inland Container Depot. According to the Customs, the consignment was found consisting of Hosiery Garments and each garment was found to be cut in two ways by way of vertical slit on the back.Therefore, the department issued a show cause notice wherein it was alleged that in view of the Public Notice No. 173, dated 13-12-1985, this did not amount to proper mutilation. This was resisted to by the importer and a stand was taken by them that as per the amendment of the Public Notice the goods had been properly mutilated. However, this was not accepted and therefore, proceedings were initiated against the importers for violation of the terms of the Import Policy and also it was alleged that the goods did not fall under Heading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The Tribunal further observed that even if it is felt that the mutilation is not sufficient, Customs authorities could have ordered further mutilation on the analogy of Section 24 of Customs Act and had upheld the import under OGL. It is his submission that in the present case the goods imported had been mutilated and admittedly, it was for production of shoddy woollen yarn and not for sale as complete garment. The goods had been further mutilated on examination and it had also been released at the instance of the High Court, therefore, it is his submission that there is a sufficient compliance of the Import Policy and there is no cause for payment of duty for complete garments. He also referred to the several ratios which had clearly indicated that the goods are woollen rags in pre-mutilated form-old unripped completely pre-mutilated and fumigated original C.A.W. Woollen Hosiery Rags, the same description was found in all the documents and there was absolutely no mala fide in the import of the mutilated rags. He referred to the judgment of the Rajasthan High Court rendered in the case of Swastika Woollen Industries (P) Ltd. v. Union of India as reported in 1992 (62) E.L.T. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods does not have features of `worn clothing or of `other worn clothing , in view of it having come in the form of rags in a mutilated form. There is no allegation that the appellants intended to sell the goods in the market as other worn articles . Therefore, the basis on which the department has proceeded against the importer is not sustainable and also not reasonable. The department has not proved all charges made out under Section 111(d) and 111(m) of the Customs Act and therefore, the entire order is unsustainable and requires to be set aside. The judgments relied by the Counsel are fully applicable to the fact of the present case. 11. We notice in the case of Amarson Woollen Mills v. Collector of Customs, as reported in 1992 (61) E.L.T. 756, the appellants had imported synthetic waste declared to be of hard waste variety and it claimed concessional assessment under Notification No. 32/86 read with Notification No. 126/86. The department had proceeded for deliberate mis-declaration to evade duty in terms of Section 111(d) and 111(m) and for contravention of the Section 3 of Imports and Exports (Control) Act read with clause 3 of Imports (Control) Order, 1955 read with Se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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