9911796707
TMI Blog1981 (1) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri V.S. Gupta, Partner for the appellant at Sl. No. 46. Nobody represented the appellants at Sl. Nos. 35, 40, 41, 43, 44 and 47 to 53. Appellants at Sl. Nos. 55 to 66 have not asked for any personal hearing. 4. The two issues common to most of these appeals are :- (i) The validity of the importations under the Import Control Regulations and whether there has been any contravention of clause 3 of the Import Control Order, 1955; and (ii) The liability for Customs Duty on the goods imported. 5. The Board now takes up the first issue for consideration. 6. The Board observes that (as argued by the Counsels, and at length by Shri J.R. Gagrat) there was no dispute regarding the licensing aspect till 1972. 7. For several years prior to 1967 woollen rags were being allowed to be imported as a raw material for the manufacture of shoddy yarn . However, from 27-11-1967, the item became canalised for import through the State Trading Corporation (hereafter referred to as the STC ). Thereafter, all import licences for the item were being issued in STC s name. The beneficiaries were either Registered Exporters (REP) or Actual Users (AU.) In the case of Actual Users and for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belonging to the petitioners under section 111(d) of the Customs Act, 1962 read with section 3 of the Imports and Exports (Control) Act, 1947. 11. It is the appellants contention in all these appeals before the Board that their cases are on all fours with the case dealt with in the said petition and therefore the Collectors orders should be set aside in these cases also. 12. In the Nagesh Hosiery Mills Case, the Court had taken the view that since there was no special definition for the item woollen rags anywhere (either in the Import Trade Control Order (hereafter referred to as ITC ) or the First Schedule to the Indian Tariff Act, 1934 (hereafter referred to as the ICI ) it will have to be construed not in the scientific or technical or laboratory sense but in the sense which persons dealing or commercially conversant with the item would attribute to it, as observed by Tulzapurkar in the Nirlon case (Misc. Petition No. 491 of 1964 decided on 30th April, 1970). 13. The Court observed that the approach of the Collector was to dissect the expressions woolen and rags separately in their technical sense which was not in accordance with the general principles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rting. In any other case, the ordinary meaning as known to the trade must be applied. This is not to accept the conclusion of the 1st Respondent (i.e. Collector of Customs, Bombay) that hosiery or garments discarded in richer countries and implying thereby that they are Rags only in richer countries and are second hand clothing in India . The expression rags must be given its ordinary meaning viz. hosiery or garment which is ordinarily discarded by the wearer thereof when it cannot be put to any other use economically . This does not mean that the expression rags has to be construed in the light of the wearer of the hosiery or the garment by an individual. The expression rags is not to be construed in the light as to what use such a hosiery or a garment would be made by a beggar on the street or by a poor individual. It has to be given a common sense meaning viz., as would be known to the trader who usually deals with such item not necessarily for the well-to-do nor for the man on the street, either, but as is usual in his business to cater for all alike. Therefore, in my opinion, in construing this expression rags as dissected by the 1st Respondent, his approach is nei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus provided for application of the new definition of woollen rags to shipments arrived but not yet cleared. 21. The Board is of the firm view that while it would be proper to define a product by executive fiat and on a particular date, it would not only be imprudent to apply that definition retrospectively, but that such an act would not be sustainable in law. The new definition cannot hence be made applicable to goods already shipped/arrived. 22. The imports dealt with in these appeals are all of dates prior to the issue of the above Public Notice and therefore it has to be conceded that there was no statutory (or even satisfactory) definition of Woollen rags at the time of importation of the consignments under appeal. In such an absent situation what are woollen rags is a matter which has to be decided according to what they had come to be known in the Trade. 23. The imports in the cases under consideration are admittedly either against STC s global tenders, or against indents placed by the importers direct after getting them duly approved by the STC. 24. It can be argued that in the latter type of cases, the STC had only approved the prices against the descri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was no statutory (or satisfactory) definition of the term woollen rags for ITC purposes. 32. For all the reasons which have been set out above the Board comes to the conclusion that the woollen rags imported would have to be treated as validly imported against the licences in the name of STC with letters of authority in the names of the importers or against REP licences issued to the importers. 33. Accordingly, the Board holds that the orders of absolute confiscation under appeal were not justified and accordingly sets them aside. However, in terms of the description of the licences governing the importations, and the global tenders or indents placed on the suppliers, which refer in terms to unserviceable or mutilated garments the Board in allowing the appeals directs that the goods as released from the order of absolute confiscation shall be mutilated so as to render them totally unserviceable, under Customs or Excise supervision in the appellants factories if they have their own factories, or at a place near the ultimate destination of the goods, as may be approved by the original adjudicating authority. 34. That brings the Board to the next issue to be deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid down in the ICT as a criterion for deciding upon old woollen rags. As all discarded textile materials, i.e. garments and clothing would come under the term old rags , old rags would obviously also include all discarded hosiery and knitted apparel which are specifically mentioned in Item 51(1) of the ICT. 40. The Board considers it as highly material that Tariff Item 51(1) considers articles containing not less than 15% of wool by weight as woollen hosiery and woollen knitted apparel . 41. Against this prescription (for obviously new and unused goods) the Board fails to understand the logic in laying clown a minimum percentage of 60% wool for discarded hosiery and knitted apparel for their being considered as woollen rags . In any event such a prescription would be against the language of the Statute itself. 42. Moreover, the very preface to ICTG clarifies that the advices in the ICTG are meant as an expression of opinion on a given set of facts and circumstances and do not lay down the law for classification of an article . 43. Having all the above factors in view, the Board considers that the Advice in the ICTG cannot be considered as of any utilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat all woollen rags must fall under that Item alone. Since discarded clothings are also woollen rags they could very well fall under different other appropriate items in the Tariff (since no Item has been specified in the Notifications). Secondly, wool content of any woollen rags will become, applicable only if it were specified either under any Item in the ICT and referred to in the Notifications-which is not the case here, or in the Notifications themselves-which is also not the case here. 49. Two other factors are also important and relevant in this context. 50. The first is the method of sampling adopted in the Bombay Custom House (to which all these appeals relate). 51. The Board understands that from 1962 onwards for sampling of consignments of woollen rags, the method was to subject them to inspection by superficial examination of 5 per cent of the bales in a consignment with a view to find out whether it contained garments of composite type, by feel and if necessary, by a burning test to see whether the garments were made of wool. In case the garments were found to be of material other than wool, representative samples were sent for test. From July, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed so as to make it tighter. 52. The above retailing of the methods of sampling adopted would show that it was not uniform and varied in quality and quantity from time to time. It stands to reason that in consignments of this nature which included a vide variety of articles of men s women s and children s wear, no sampling can be said to be perfect, or even complete, unless each article in each bale of each consignment was physically examined and chemically tested thereafter, wherever necessary. This would have been a labour worthy of an epical Hercules, but an obvious physical impossibility for the Custom House, considering the entire spectra of the various articles that would have had to be so examined. 53. As has been stated, even in the limited sampling, the methods varied. From the records the Board finds that in addition to visual examination, and tests made on a few samples drawn thereafter, in some cases tests have been made on samples drawn by the core drill method , which was claimed to be a more scientific method of sampling in this type of cases. These have been made at different times, and at times, in respect of the same consignment, and not uniformly for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... woollen 6 samples (3 from woollen 3 from non-woollen) : 5 samples found to be woollen and 1 non-woollen 5 samples 46% woollen 54% non-woollen 34 153 (i) 3 bales (i.e. 1.96%) Woollen 20.30% only 2nd examination 8 samples Woollen - 12.5% Non-woollen - 87.5% 2 samples Average 21.95% woollen (ii) 4 bales (i.e. 2.6%) Woollen - 26% 20 samples 60% woollen 40% non-woollen 35 98 3 bales (i.e. 3.06%) Orlon Nylon 2 samples both non-woollen - 55. It is, therefore, not beyond the realms of probability, and well within the realms of possibility, that if the sampling and testing of the goods imported had been ample and uniform, the results might predictably have been different showing some percentage of woollen content. [It is relevant here to again recall that the only Tariff Item that prescribes a woollen content is Item 51(1) relating to Hosiery and Knitted Garments ]. 56. In passing, the Board would also like to make a mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
