UNION OF INDIA Vs. BIMEX INTERNATIONAL

JUDGEMENT

(1.) THE present appeal by the Union of India, through the Secretary to Government of India, Ministry of Finance, has been filed against the judgment of the learned Single Judge, by which the writ petition of M/s. Bimex International had been allowed and order dated 23rd November, 1973 passed by the Assistant Collector, Customs (Annexure P-5), order dated 25th March, 1975, passed by the Appellate Collector Customs (Annexure P-7) and order dated 25th November, 1975, passed by the Joint Secretary to the Government of India, (Annexure P-9) were quashed.

(2.) BRIEFLY stated the facts of the case are, that the firm of the writ petitioner is engaged in the manufacture of woollen/terrywool textiles, which are sold within the country and are exported to various countries in the Middle East. Under the import and export policy of the Government of India, the Small Scale Industries are entitled to import foreign goods to the extent of 70% of the F. O. B. value of the goods exported by them as determined by the Joint Chief Controller of Imports. The writ petitioner was granted import entitlement to the tune of Rs. 45 lakhs. In exercise of powers conferred on it by the Imports and Exports (Control) Act, 1947, the Government of India decided in 1967 to canalise import of various goods through the State Trading Corporation. Ever since 1969-70, the writ petitioner had been importing goods of various descriptions like greasy wool, wool tops, rags and polyester fibre, etc. , through the State Trading Corporation. The firm had imported various consignments of rags which were utilised for the manufacture of different articles of wool and terry wool textiles. According to the petitioner, over a period of time certain quantity of rags got accumulated in the factory premises and because of paucity of space in its factory, 10 bags containing rags weighing 339. 50 Kgs. were placed by the petitioner in the factory premises of Messrs Happy Textile Mills which is also functioning in the same premises as a sister concern.

(3.) ON 2nd September, 1972, a party of Central Excise and Customs Officers visited the premises of Happy Textile Mills and took into possession the abovesaid 10 bags of rags. The Superintendent of Central Excise visited the petitioner's premises a few days after this seizure. Shri S. D. Mahajan, one of the partners, explained the petitioner's position to him. The statement of one of the partners was recorded by the Superintendent of Customs (Preventive) on 24th January, 1973, a show cause notice dated 6th February, 1973, was issued to the petitioner-firm, under Section 108 of the Customs Act, 1962 calling upon it to show cause as to why 10 bags containing woollen garments of foreign origin be not confiscated under Section 111 read with Section 11 of the Customs Act, 1962 and penal action be not taken under Section 112 of the Act. The writ petitioner submitted that it stuck to the statement made by Shri Mahajan on 24th January, 1973, and the same should be treated as its reply to the show cause notice. On 27th February, 1973, another communication was addressed to the petitioner alleging that the second-hand clothing recovered by the officials of the Customs Department could not have been legally imported into India. Thereafter, the Assistant Collector Customs, Amritsar, confiscated the goods under Section 111 of the Customs Act, vide order dated 23rd November, 1973 (Annexure P-5 ). It has been mentioned in the order that the value of the seized goods was Rs. 800 only. The petitioner was unsuccessful in appeal and revision before the higher authorities. These three orders, as mentioned in the opening paragraph, were challenged by the petitioner by way of writ petition. The main stand of the writ petitioner was that it was authorised to import rags from a foreign country and the material recovered from its premises was in fact rags and not second-hand clothes as alleged by the Customs Department. No written statement was filed on behalf of the respondent Union of India (now appellant ). The learned Single Judge holding that what the petitioner had imported were rags, allowed the writ petition and quashed the impugned orders. Dissatisfied with the judgment of the learned Single Judge, the Union of India had filed the present appeal, as stated above.