ORDER JYOTI BALASUNDARAM, MEMBER (J.) - All these appeals involve a common question of interpretation of ITC Policy 1985-88 based on similar facts and hence a common order is being issued.
2. The appellants imported woollen/synthetic rags described in the respective bills of entry as completely pre mutilated woollen rags or completely pre-mutilated synthetic rags and claimed import under OGL as listed against SI. No. 418 List 8 Part I of Appendix 6 of the Import Policy April 85- March 88. The goods were examined and found to be synthetic rags cut into 2 and 4 pieces only and not completely pre mutilated in accordance with para 37(l)(b) in the case of Shree Ram Woollen Mills. The goods on examination were found to be synthetic trousers cut into two different manners i. e. Some trousers are cut vertically through the middle and near the stitch of upper portion so as to result in 2 complete long pieces. The remaining trousers are cut both vertically in the middle near the stitch of the upper portion and across the knee which has resulted in two upper parts and two lower parts. The goods imported by Gagret Woollen Mills were found to be synthetic rags cut into two or 3 pieces only. In view of the foregoing, the case of Department was that the goods did not satisfy the condition No. 37 of the OGL for the relevant period inasmuch as they are not completely pre mutilated. The adjudicating authority confiscated the consignments with option to redeem the same on payment of i.e in addition imposing personal penalties on the appellants. ' Hence these appeals.
3. Both the learned Advocates for the appellants contended that the issue of validity of import under OGL of t>such goods has been settled in favour of the importers by the order of the Tribunal in the case of Kakkar & Co. v. Collector of Customs, New Delhi, reported in 1988 (35) ELT 718 (T) which has been upheld by the Hon'ble Supreme Court while dismissing the SLP filed by the Revenue as reported in 1989 (42) E.L.T.-A 44. However, learned SDR Shri R.K. Kapoor seeks to distinguish the facts in the appeals filed by Shree Ram Woollen Mills from the facts of the Kakkar & Co. Case. He submits that in that case the Tribunal came to its finding that the rags were not completely pre mutilated in the absence of any evidence in the examination report that the cut made on the imported garments was made along the seams of the old clothing in order to make them restitchable and retrievable as garments, while the examination of the goods imported by Shree Ram Woollen Mills reveals that the synthetic trousers have been cut at the seams and, therefore, capable of being restitched as garments. He further submits that the 1985-88 Policy did not provide for further mutilation of the rags if they were found to require to be further mutilated so as to become completely mutilated. Lastly, he contends that Shree Ram Woollen Mills mis-declared the goods as woolen rags while they were found to be synthetic rags and hence, penalty has been rightly imposed for misdeclaration.
4. We have heard both sides and carefully considered their submissions. We see no force in the submissions of the learned SDR regarding distinguishing factors between Kakkar & Co. Case (supra) and the present batch of appeals. Examination of the goods imported by Kakkar & Co.
Revealed that they were synthetic garments consisting of garments cut into 2, 3, or 4 pieces which the Department alleged were wholly available for being restitched or retrieved as fabrics and hence not conforming to the definition of completely pre mutilated rags in terms of para 37. The rags imported by Shree Ram Woollen Mills were also found to be cut into 2 or 4 pieces and the same allegation of their availability for restitching, was levelled against the importers. The Tribunal had examined the same issue in Kakkar & Co. Case and held as follows: "14. Fatal examination reports, shorn of the expression of opinion of the examining officers, indicate that goods in the first two appellants cases are synthetic garments cut into 2, 3, 4 pieces or in two pieces wholly available. The fact that these are 'rags' as declared in the Bills of Entry has not been disputed because there is neither an allegation nor a finding that the goods are not rags. The goods have been assessed to rage. The dispute is that these are not 'completely mutilated' and that these retrievable and restitching as fabrics or garments. We are unable to agree with this finding of the Collector of Customs on the basis of the examination report and other material on record. There is no indication that the 'cut' made is along the seams of the old clothing so that these are restitching and retrievable as garments.
15. Similarly, the finding of the Additional Collector of Customs on the basis of the factual examination report synthetic rags cut into 2-3 pieces" that these are not "completely pre- mutilated" is also not sustainable on the face of it, in view of the above observations, due to lack of any identifiable test of complete mutilation.
16. Additional Collector's further finding that the imported goods are capable of being retrieved for manufacture of children's garments or of other articles is without any evidence. It is unwarranted assumption.
17. Even if it is felt that the mutilation not sufficient, Customs authorities at Delhi could have ordered further mutilation on the analogy of Section 24 of the Customs Act and on the basis of similar practice prevalent in the Bombay Customs referred to. In the W.R.B's No. 997-998-WRB, dated 22.8.1987 mentioned supra. Facts of case here the W.R.B. Of this Tribunal are almost identical to the facts in these cases. We respectfully agree with the decision of the WRB in the case of Subhash Woollen Mills."
The charge of misdeclaration is also not sustainable in view of the fact that the relevant OGL entry covers both Woollen rags and synthetic rags.
5. We are satisfied that the appeals are squarely covered by the decision of the Tribunal relied upon by the appellants (supra) which have since been followed in a lost of other cases.
Accordingly, following the same ratio, we set aside the impugned orders and allow the appeals with consequential relief to the appellants.