Trade parlance controls classification of woollen rags, so licence coverage defeated confiscation and penalty

Where a commodity is not statutorily defined, its classification for import control must be determined by trade parlance. The Court accepted that woollen rags could include second-hand woollen garments and held that the decisive test was whether the imported goods were known in trade as woollen rags, not whether they were mutilated or how they might later be used. As the seized goods fell within that trade description and the licence covered woollen rags, confiscation and penalty could not be sustained.

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Issues: Whether the goods seized were covered by the import licence for woollen rags and, if so, whether the orders of confiscation and penalty could be sustained.

Analysis: The goods were described in the seizure memo as woollen rags (used), and there was no statutory definition of the expression at the relevant time. In the absence of a statutory definition, the meaning accepted in trade had to govern. The petitioner had shown that it was importing woollen rags through the State Trading Corporation and that there was no time-limit for using them in the manufacture of shoddy yarn and textiles. The Court accepted that woollen rags could include second-hand woollen garments and held that the decisive question was whether the imported goods were known in trade as woollen rags, not how they might later be used or whether they were mutilated.

Conclusion: The goods were covered by the licence for woollen rags and the confiscation orders were unsustainable.

Ratio Decidendi: Where a commodity is not statutorily defined, its importability and classification must be determined according to the meaning attributed to it in trade parlance, and goods answering that description cannot be excluded from a licence merely because they are serviceable or not mutilated.

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