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2003 DIGILAW 725 (BOM)

Auto Steel Industries v. Union of India & others

2003-07-15

J.P.DEVADHAR, V.C.DAGA

body2003
JUDGMENT - DAGA V.C., J.:---This petition is directed against the order passed by the 3rd respondent dated 25th October, 1990, holding that the goods imported by the petitioners were disposal goods, the importation thereof was not permitted as such they were liable to be confiscated. 2. Petitioners are a registered Small Scale Industrial Unit, and manufacturing rubber and plastic goods for automobile and other industries. Petitioners require silicon rubber as one of the raw material, which is allowed to be imported under the OGL provisions of the Import Policy. 3. Petitioners claimed that they regularly buy such job lots from a well known Japanese manufacturers M/s. Shinetsu Chemical Co. Ltd., Tokyo. 4. The petitioners say that when some portion of the manufactured lot or joblot does not conform to definite standard or specification, they are removed from such lot, and identified as rejects or off standard goods. Though the said manufactured accumulated lots, in small quantity, are new goods, however, they are treated as off standard lots and sold as discarded job lots. The petitioners say that they regularly buy such discarded job lots from the aforesaid Japanese Company. In their submission, such goods being new cannot be treated as disposal goods within the meaning of Import Control Order, 1955. 5. The petitioners sought to place reliance on the judgment of this Court in the case of (Adul Husein v. Union of India others)1, I.L.R. 1981 Bom. 936 wherein the learned Single Judge of this Court had an occasion to deal with such question, who was pleased to hold that the expression "Disposal goods" is used in contradistinction to the expression 'new goods' and proceeded to rule that, once it is found that the goods imported are new, the fact that they are not of uniform type or size is not sufficient to come to the conclusion that they are disposal goods. 6. Shri Kantawala relying upon the above judgment contended that though the goods were not of uniform size or type but they were new goods as such they being new goods could not have been treated as disposal goods. He also placed reliance on the judgment of the Tribunal in the case of (Zenith Magnetics Co. Ltd. v. Commissioner of Customs, Mumbai)2, 1997(95) E.L.T. 96 wherein Tribunal followed the view of this Court in the case of Abdul Husein cited supra. He also placed reliance on the judgment of the Tribunal in the case of (Zenith Magnetics Co. Ltd. v. Commissioner of Customs, Mumbai)2, 1997(95) E.L.T. 96 wherein Tribunal followed the view of this Court in the case of Abdul Husein cited supra. This judgment was delivered by the Tribunal subsequent to the amendment made to the Import Policy meant for subsequent years. 7. Per Contra, Shri H.V. Mehta, learned Counsel for the revenue contended that after amendment to import policy, the concept of "disposal goods" could not be understood in the same concept in which it was understood by the learned Single Judge of this Court in the case of Abdul Husein (supra). He further urged that as far as the view taken by the Tribunal in the case of Zenith Megnetics (supra) is concerned, the same is not a correct view in view of the subsequent amendment to Import Policy meant for subsequent years. 8. Shri Mehta, turning to the factual aspect of the matter further submitted that by letter dated 16th April, 1990, M/s. Solude Ltd. from whom petitioners had purchased goods in question stated that those goods were treated as rejects by them. The same were remnant from different lots in small quantities, which they considered as waste being accumulated mix joblot leftover as it could not achieve standard result. Shri Mehta submits that the respondent No. 3 has taken into account this factual aspect of the matter and reached to the conclusion that goods imported by the petitioners were disposal goods. We thus prayed for dismissal of the petition with costs. 9. It appears that after the judgment of the learned Single Judge of this Court in the year 1981, the Import Policy came to be amended. In the new Import Policy meant for the period commencing from April 1990 to March 1993, necessary modifications were made and in para 86(1) of the said Import Policy it was specifically stated and clarified that disposal goods even if they are new shall not be treated as new goods, for the purposes of sub-clause (3)(iii) of Clause 5 of the Import (Control) Order, 1955. 10. The very purpose of the above amendment in the submission of Shri Mehta was to take away the effect of judgment of the learned Single Judge of this Court in the case of Abdul Husein (supra). 10. The very purpose of the above amendment in the submission of Shri Mehta was to take away the effect of judgment of the learned Single Judge of this Court in the case of Abdul Husein (supra). He submits that in spite of the amendment to the import policy, which had given definite meaning to the words "disposal goods" for the purposes of sub-clause (3)(iii) of Clause 5 of Import (Control) Order, 1955, the Tribunal in Zenith Magnetics Ltd. v Commissioner of Customs, Mumbai (supra) could not have taken the view that even after amendment to the Import Policy the goods which are new but not of prime quality can not be considered as disposal goods. The Tribunal, in his submission, has wrongly reiterated the view taken by the learned Single Judge of this Court which may be correct prior to the amendment to the Import Policy. He submits that it was wrongly held by the Tribunal that the amendment did not change the meaning of words "disposal goods" occurring in sub-clause (3)(iii) of Clause 5 of the Import Control Order, 1955. 11. Having heard the parties, Shri Mehta seems to be right in his submission. The view taken by the Tribunal in our opinion, completely ignores the effect of the amendment to the Import Policy and purpose thereof. While considering rival submissions, one has to take into account, what was the provision in the Import Policy prior to its amendment. How it was understood by Court and parties operating thereunder. What was the mischief noticed by the policy maker and how it was sought to be remedied and what was the reason therefor. Had all these aspects been taken into account and considered by the Tribunal in its proper perspective, we are sure the view of the Tribunal would have been different. It is difficult to accept the line of thinking adopted by the Tribunal in the case of Zenith Magnetics Ltd. (supra). In a situation of this nature, if we see what was the position before amendment of para 86(1) of the Import Policy, it would be clear that the goods being new were treated as goods not falling in the category of disposal goods. In the same sense it was understood by the courts. This mischief was sought to be remedied by making amendment to the Import Policy. In the same sense it was understood by the courts. This mischief was sought to be remedied by making amendment to the Import Policy. In (Block-Clawson International Ltd. v. Papierwerke Waldhof Aschaffenburg)3, 1975(1) All.E.R. 810 (H.L.) Lord Reid observed that one must first read the words in the context of the Act as a whole, but one is entitled to go beyond that. The general Rule in construing any document is that one should put oneself in the shoes of the maker or makers and take into account relevant facts known to them when the document was made. The same must apply to the statutory or administrative policy. It has always been said to be important to consider the mischief which the policy was apparently intended to remedy. If the view of the Tribunal is accepted as correct then the very purpose of the amendment to the Import Policy would be defeated. 12. We, having considered the submissions advanced and examined the amendment to para 86(1) of the Import Policy for 1990-93, find it difficult to agree with the submissions of the petitioners that goods which were discarded by the manufacturers as waste cannot be treated as disposal goods in spite of the amendment to sub-clause (3)(iii) of Clause 5 of the Import (Control) Order, 1955 only because they are new goods. In our opinion, such goods will have to be treated as disposal goods for the purpose of Import (Control) Order, 1955 in the light of import policy which was prevalent during the relevant period, otherwise the very purpose of the amendment would be lost. The view taken in the impugned order is a reasonable and possible view. No fault can be found with the said view. In the result, petition is dismissed with no order as to costs. Petition dismissed. -----