Imported fabrics treated as lining material; confiscation failed and penalty could not survive under customs law.

Imported fabrics were treated as lining material under clause 4.1 of Appendix 17 of the Import Policy 1983-84 because the record did not show that they were excluded by the policy or incapable of such use. Their possible use as shirting material did not, by itself, defeat their technical or commercial description as lining material. As the goods were not shown to fall outside the permitted entry, confiscation under section 111(d) of the Customs Act, 1962 was not justified and was set aside. Once confiscation failed, the penalty could not stand, and it was also unsustainable because the sole proprietor had died before the order was passed.

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Issues: Whether the imported fabrics were covered by the policy entry permitting lining and inter-lining materials, and whether confiscation and penalty could be sustained under section 111(d) of the Customs Act, 1962.

Analysis: The goods were claimed as lining materials under clause 4.1 of Appendix 17 of the Import Policy of 1983-84. The material on record did not establish that the fabrics were excluded by the policy or that they were incapable of use as lining material. The fact that the fabrics could also be used for shirting did not by itself negate their description as lining material in technical or commercial understanding. In the absence of proof that the goods were not lining material, confiscation was not justified. Once confiscation failed, the penalty could not survive; further, the penalty was also unsustainable because the sole proprietor had died long before the order was passed.

Conclusion: The confiscation was set aside and the penalty was quashed.

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