1990 (3) TMI 71 - SC - Customs

Supreme Court Rules in Favor of Importers on Mutilation Policy Interpretation

COLLECTOR OF CUSTOMS Versus SWASTIKA WOOLLEN INDUSTRIES

COLLECTOR OF CUSTOMS Versus SWASTIKA WOOLLEN INDUSTRIES - 1990 (47) E.L.T. 216 (S.C.) Issues: Interpretation of the conditions of the licence policy regarding the import of goods, specifically focusing on the requirement of complete mutilation of certain items.Summary:The Supreme Court examined appeals from a tribunal order concerning the entry of goods and their condition in relation to the licence policy. The key question was whether the goods, specifically pre-mutilated rags, were in the required condition at the time of entry into the country. The tribunal found distinctions between imports at different customs locations and noted the lack of clear guidelines for importers. Despite offers for further mutilation, the goods were confiscated and penalties imposed. Reference was made to previous decisions highlighting the importance of complete mutilation as per national and international practices. The court observed discrepancies in the interpretation of the policy conditions and emphasized the lack of a defined standard for completeness in mutilation. Importers provided evidence on the understanding of mutilation in trade, which the court found credible. Relying on precedent, the court held that in the absence of a clear test for complete mutilation, the benefit should be given to the importers.Examination reports indicated that the goods were synthetic garments cut into pieces, declared as rags in the Bills of Entry. The dispute centered on whether the goods were completely mutilated and could be reassembled as fabric or garments. The court disagreed with the Collector of Customs, noting that the cuts made were not along the seams of old clothing, making them non-retrievable as garments. Ultimately, the court upheld the tribunal's decision, dismissing the appeals without costs.