Union of India (UOI) vs Charanjeeth Kappor and Others

K.A. Swami, C J.

The question for consideration in these appeals is as to whether the respondents are entitled to synthetic/woollen rags imported by the

respondents fall under OGL vide serial Number 418, List 8, Part I of Appendix 6 of the ITC policy for the year 1993. Similar policy for the years

1985 to 1988 has been considered by the Supreme Court and it has been held that such an import is permissible under OGL. In Appeal (Civil)

Nos. 12523 to 12526 of 1988 filed by the Collector of customs against the 1988 (17) ECR 267 , the Supreme Court has dismissed the appeal

and has held as follows:-

In view of the facts found by the Tribunal it is clear that the goods were rags as contained in Bills of Entry, there is no dispute. The only question in

dispute that was raised was that the rags were not completely mutilated and these are retrievable and are restitchable. The Tribunal went into the

question and held exhaustive discussion, took into consideration all the relevant facts and also that the goods were not available and as such no

further mutilation was possible, came to the conclusion that the order of the Collector was not sustainable. The appeal was allowed. We find no

ground to entertain this petition. The petition is therefore dismissed.

Thereafter, again, in Collector of Customs v. Swastika Woollen Industries (C.A. 933-65 of 1990 dated 19/03/1990) reported in 1990 (47)

ELT 216, the Supreme Court has specifically held that in the absence of any identifiable test of complete mutilation laid down in the policy for the

guidance of the importers and the endorsement [enforcement?] agencies, the benefit has to be given to the importers. In that case, the Supreme

Court has also referred to its earlier decision in U.O.I. v. Tisco (ECRC and C) and pointed out that since the duties on strip and skelp are not the

same, it is absolutely necessary to define the word ""skelp"" so that there can be no doubt or confusion in the mind either of the taxing authority or of

the tax-payer with regard to the tax liability qua skelp as opposed to strip. That principle has been applied to the case of mutilated rags. In the

instant case, as found by the Adjudicating Authority and also by the learned single Judge, the synthetic rags imported are mutilated, therefore they

do fall under OGL vide serial number 418, List 8, Part I of Appendix 6 of the ITC Policy for the year 1993. Accordingly, we are of the view that

the learned single Judge is justified in allowing the writ petitions. Hence, these writ appeals are liable to be dismissed and the same are dismissed.

However, it is directed that the amount deposited by the respondents shall be refunded within one month (from today. The bank guarantees and

personal bonds furnished in respect of these cases shall also be cancelled. However, there will be no order as to costs.