TMI Blog1988 (4) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... f Entry were filed for clearance of the goods for home consumption. The description of the goods in the Bills of Entry was the same as found in the invoices and other documents. On arrival of the goods at the Kandla Port, they were examined and were found to be synthetic rags as declared. The authorities, however, found that since the condition of the synthetic rags did not comply with the requirements of Public Notice No. 173 issued by the Principal Collector of Customs, Bombay, they could not be cleared as 'completely pre- mutilated'. In the case of the petitioner Rupani Spinning Mills Private Limited, the Collector of Customs held that the import was in violation of the provisions of the Customs Act and imposed fine and penalty including personal penalty. As the petitioner of the third petition, Swastika Woollen Industries Private Limited, was aware of this development, it sought an audience with the Collector of Customs and pointed out the practice prevailing in the Bombay Customs House which permitted clearance of such goods after they were cut into four pieces as 'completely pre-mutilated'. At the time when the petition was filed, no final decision was taken on the representa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersonal penalty under Section 112(a)(i) of the Act. In the case of the third petitioner, Swastika Woollen Industries Private Limited, the impugned order was passed during the pendency of the petition whereas in the first two petitions it was done before the filing of the petitions. 4. The Collector of Customs, Bombay, issued Public Notice No. 173, dated 13th December, 1985 laying down guidelines in pursuance of the policy for the period AM' 88 providing for the import of woollen rags/synthetic rags under Open General Licence in completely pre-mutilated condition. Taking note of the fact that mutilation of woollen rags/synthetic rags was done abroad with the help of cutting machines, chopping machines and punching machines while the same had to be done in our country manually, certain guidelines came to be laid down in paragraph 4 of the Public Notice insofar as mutilation by that method was concerned. It provided that in the case of coat, frock and other like body garments the cutting should result in making six pieces of the garment, the details regarding the nature of cutting having been stipulated. In the case of trousers and other like garments also, details regarding the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rags are imported to India, the notion of mutilation is different from the guidelines laid down by the Public Notice No. 173 of 13th December 1985. He submitted that one or two cuts were considered enough by the foreign countries to describe the garments as completely mutilated whereas it was not so under the aforesaid guidelines. He further submitted that the cost of mutilation in foreign countries is very high and if mutilation as per guidelines is insisted upon, it would be well nigh impossible to import the garments for home consumption as the shoddy yarn manufactured therefrom would not be cost effective. In this connection he invited our attention to certain documents collectively produced at Annexure 'F' to Special Civil Application No. 1698 of 1988. It is clear from these documents that if the garments are required to be mutilated as per the guidelines, the cost would be almost ten times. It is pointed out that each additional cut would incur an additional cost of 7 cents per kilogram which would place the garment out of reach as it would be possible to buy virgin fibre at that price. It must be remembered that the labour cost in those countries is very high and if mutilat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e followed by the Bombay authorities should be followed by Kandla Port also. Mrs. Mehta, the learned Senior Central Government Standing Counsel, informs us that the Delhi Collectorate takes the view that the import is illegal as the goods cannot be said to be completely pre-mutilated. The Delhi Collectorate, therefore, passes orders for confiscation of the goods and fine or penalty in lieu of confiscation and also imposes personal penalty. On the other hand, the Bombay Collectorate adopts a procedure of permitting further mutilation of the goods on arrival to the satisfaction of the concerned authorities before clearance by imposing a personal penalty only. It may be realised that the practice followed by the Delhi Collectorate was not approved by the Appellate Tribunal as pointed out hereinabove. The Appellate Tribunal, Delhi thought that the procedure followed by the Bombay Customs of permitting further mutilation at the station of import should be adopted on the analogy of Section 24 of the Customs Act. 6. We have carefully considered the rival points of view and we are of the opinion that the procedure followed by the Bombay authorities is just and equitable and in keeping wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to continue, a pragmatic approach is called for. Section 24 of the Customs Act provides the clue thereto. Under that provision the Central Government is empowered to make rules for permitting at the request of the owner mutilation of imported goods so as to render them unfit for use for a purpose other than the one for which they are imported. This is an enabling provision which indicates that Parliament had conceived of a situation where further mutilation on import may be necessary to render the material unfit for use for a purpose other than the one for which the same was imported. In the absence of rules and till such rules are framed, the spirit underlying this provision can be invoked by directing the customs authorities to permit further mutilation on import before clearance. As pointed out above, the customs officials at Bombay permit further mutilation at the importer's cost and the official being satisfied that the garment is rendered totally unserviceable for any other purpose save and except the one for which it is imported, clearance is permitted on payment of personal penalty. We think this practice is in consonance with the spirit of Section 24 of the Customs Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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