New goods are not disposal goods merely because they are defective or sub-standard under import control rules.

Under the Import (Control) Order, new magnetic tapes did not lose their character as new goods merely because they were defective, sub-standard, or not of prime quality. The text distinguishes disposal goods from new goods and states that mere lack of uniformity or defects is insufficient to classify admitted new goods as disposal goods. It further notes that a handbook clarification could not override the controlling interpretation. On that basis, clearance under the Open General Licence remained permissible.

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Issues: Whether magnetic tapes which were new but not of prime quality and contained defects could be treated as disposal goods so as to deny clearance under the Open General Licence.

Analysis: The applicable import condition in sub-clause (3)(iii) of clause 5 of the Import (Control) Order, 1955 distinguished between new goods and disposal goods. The Court noted that the earlier Bombay High Court ruling treated disposal goods as the antithesis of new goods and held that mere lack of uniformity, defects, or sub-standard quality did not by itself make new goods disposal goods. The Tribunal also noted that the Handbook clarification could not displace the controlling interpretation where the goods were admittedly new and not second-hand or used.

Conclusion: The goods were not disposal goods and their import under OGL was permissible; the appeal succeeded.

Ratio Decidendi: Goods that are new do not become disposal goods merely because they are defective, sub-standard, or not of prime quality.

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