1992 (6) TMI 30 - HC - Customs

Court Allows Import via ICD Sanganer, Quashes Restrictions on Goods

SWASTIKA WOOLLEN INDUSTRIES (P) LTD. Versus UNION OF INDIA

SWASTIKA WOOLLEN INDUSTRIES (P) LTD. Versus UNION OF INDIA - 1992 (62) E.L.T. 17 (Raj.) Issues Involved:1. Quashing of specific items in the Import and Export Policy 1990-93 and related orders.2. Permission to import woollen rags, synthetic rags, and shoddy wool through ICD Sanganer.3. Quashing of Public Notice No. 11/88 and related public notices imposing mutilation standards.4. Quashing of the order dated 2-8-1991.5. Non-application of Public Notice No. 11/88 to imports through ICD Sanganer and enforcement of guidelines by the committee.Detailed Analysis:Issue 1: Quashing of Specific Items in Import and Export Policy 1990-93 and Related OrdersThe petitioners sought the quashing of Item 221(2), Item 29(iv) Appendix 6 of the Import and Export Policy 1990-93, and Item 17(iv) and 25 of Order No. 1790-93 OGL No. 1/90, dated 30-3-1990. These items restricted the import of woollen rags, synthetic rags, and shoddy wool to completely pre-mutilated condition and limited their import through Bombay and Delhi ICD only. The court found that the restriction to specific ports was arbitrary and unreasonable, and thus declared these conditions to be illegal.Issue 2: Permission to Import Through ICD SanganerThe petitioners argued that importing through ICD Sanganer was more convenient and cost-effective. They highlighted the agreement between the Shipping Corporation of India and Rajasthan Small Industries Corporation Ltd., which facilitated the transport of goods from Bombay to Sanganer within 40 hours. The court acknowledged the logistical benefits and held that restricting imports to Bombay and Delhi ports was unjustified. Consequently, the court directed that the petitioners be allowed to import the goods through ICD Sanganer.Issue 3: Quashing of Public Notice No. 11/88 and Related Public NoticesPublic Notice No. 11/88 mandated specific mutilation standards for imported rags, requiring multiple cuts to render them unserviceable. The petitioners contended that these standards were impractical and increased costs significantly. The court examined the definition of 'completely pre-mutilated condition' and found that the public notice imposed unreasonable conditions not specified in any official notification by the Customs authorities. The court declared the public notice illegal and directed that the general sense of 'completely pre-mutilated condition' be applied without insisting on a specific number of cuts.Issue 4: Quashing of the Order Dated 2-8-1991The order dated 2-8-1991, which adhered to the mutilation standards set in Public Notice No. 11/88, was challenged. The court found that the standards imposed by the public notice were not legally binding as they were not issued by a competent authority through proper notification. Consequently, the court quashed the order dated 2-8-1991, declaring it illegal and unconstitutional.Issue 5: Non-application of Public Notice No. 11/88 to Imports Through ICD SanganerThe petitioners argued that the public notice should not apply to imports through ICD Sanganer and sought adherence to guidelines laid down by a committee. The court agreed, stating that the public notice was not issued by an authorized customs authority through proper notification. The court directed that the imports through ICD Sanganer should be processed based on the guidelines established by the committee, which were in conformity with the Import and Export Policy and Open General Licence.ConclusionThe court ruled in favor of the petitioners on all issues, allowing the import of woollen rags, synthetic rags, and shoddy wool through ICD Sanganer. It quashed the restrictive items in the Import and Export Policy 1990-93 and related orders, as well as Public Notice No. 11/88 and the order dated 2-8-1991. The court emphasized the need for a practical and reasonable approach to the definition of 'completely pre-mutilated condition' without insisting on a specific number of cuts, thereby providing relief to the petitioners.