Broken pearls under import policy and tariff rules were treated as pearls, attracting OGL and customs exemption.

Broken pearls were treated as covered by the relevant Import and Export Policy entry when the wording was read contextually to avoid making "non-jewellery quality" redundant; the entry was construed to include pearls in powder form or of non-jewellery quality, so no import licence was required. For customs classification, raw or broken pearls retained their commercial identity as pearls and fell under Tariff Heading 71.01 rather than Chapter 5 as animal products. As the goods were accepted as unworked pearls, the exemption under Notification No. 247/76-Cus. was also available.

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Issues: (i) Whether broken pearls, though not in powder form, fell within Appendix 6, List 4, Part B, Sl. No. 8 of the Import and Export Policy, April 1985 - March 1988 and were therefore importable under OGL without licence; (ii) whether the goods were classifiable under Tariff Heading 71.01 of the Customs Tariff Act, 1975 and entitled to Notification No. 247/76-Cus. dated 02.08.1976, or were classifiable under Chapter 5 as products of animal origin.

Issue (i): Whether broken pearls, though not in powder form, fell within Appendix 6, List 4, Part B, Sl. No. 8 of the Import and Export Policy, April 1985 - March 1988 and were therefore importable under OGL without licence.

Analysis: The wording in the policy entry was read in context to avoid rendering the expression "non-jewellery quality" redundant. The conjunction "and" in the phrase was treated as disjunctive so that the entry was understood to cover pearls either in powder form or of non-jewellery quality. On that construction, the imported goods satisfied the policy entry.

Conclusion: The goods were covered by the OGL entry and no import licence was required.

Issue (ii): Whether the goods were classifiable under Tariff Heading 71.01 of the Customs Tariff Act, 1975 and entitled to Notification No. 247/76-Cus. dated 02.08.1976, or were classifiable under Chapter 5 as products of animal origin.

Analysis: The goods were described in the invoice and examination report as broken or raw pearls, and there was no evidence to displace that description in commercial parlance. Pearls were specifically covered by Heading 71.01, while Chapter 5 could not be invoked merely because the pearls were broken or non-jewellery quality. As the goods were found to be raw and unworked pearls, the exemption notification was also attracted.

Conclusion: The goods were classifiable under Tariff Heading 71.01 and qualified for the benefit of Notification No. 247/76-Cus. dated 02.08.1976.

Final Conclusion: The import was held permissible under the policy and the goods were entitled to classification and exemption as claimed, resulting in complete relief to the appellants.

Ratio Decidendi: A statutory or policy expression may be construed in context so as to avoid redundancy, and goods are to be classified according to their accepted commercial identity and plain tariff description rather than by an artificial restriction based on their being broken or of non-jewellery quality.

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