SWASTIKA WOOLLEN INDUSTRIES Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioners in these six writ petitions are carrying on the trade of manufacturing and sale of yarn and non -worsted yarn having factories at Alwar in the State of Rajasthan, at Amritsar, Panipat (Haryana) and village Dhoom Manikpur in the district of Ghaziabad in the State of U.P. etc. Through these writ petitions, order or directions as under have been sought : -

(2.) ACCORDING to the petitioners the raw material required for the manufacturing process of finished goods by the factory of the petitioner companies consist of woollen rags, shoddy wool and synthetic rags. This material is generally imported under the Open General Licence from different European countries and the United States of America. The import of woollen rags, shoddy wool and synthetic rags is allowed under the Import and Export Policy 1990 -93 only when they are imported in completely pre -mutilated condition. The import of woollen rags, synthetic rags and shoddy wool is allowed through two ports only viz. Bombay and Delhi ICD, although ICD at Sanganer has been settled with effect from 19th September, 1989. The Collector of Customs and Central Excise, Jaipur has in exercise of powers conferred upon him under Section 45(1) of the Customs Act, 1962 appointed the Rajasthan Small Industries Corporation Ltd. (A Government of Rajasthan Undertaking) to be the custodian of imported goods received at Inland Container Depot, Sanganer Industrial Area, Jaipur as would be evident from the Public Notice No. 20/90 issued by the office of the Collector, Customs and Central Excise, Jaipur. The Inland Container Depot, Sanganer has been established with a view to give benefit of containerisation by 'moving so as to be available at the points in proximity to the important industrial places. The responsibility for movement of the containers from Bombay to Jaipur has been entrusted to the Shipping Corporation of India and Rajasthan Small Industries Ltd., Jaipur. An agreement for the said purpose has been entered into between Shipping Corporation of India and Rajasthan Small Industries Corporation Ltd., Jaipur to give boost to the export from the State of Rajasthan to outside countries while imports to the State of Rajasthan from outside the countries are yet to be encouraged and the result is that the ICD, Sanganer have to move empty containers from Gateway Port, Bombay to Sanganer, which in turn increases the cost of transportation. According to the petitioners, there are about 25 plants engaged in the manufacturing and sale of shoddy yarn and non -worsted yarn in the State of Rajasthan. The importation of the goods to the ICD Sanganer has been completely banned. It is further the case of the petitioner that importation of goods through ICD, Sanganer is convenient and cheaper to the petitioners. Since the Shipping Corporation of India has entered into an agreement with the Rajasthan Small Scale Corporation Ltd., Jaipur and they are jointly responsible for unloading of the goods from Gateway port, Bombay and loading it into trucks engaged by them for the purpose of transporting the goods from Bombay to Sanganer in just 40 hours. As against this, the port at Bombay being the busiest port of this country is highly congested and clearance of goods in Bombay after off -loading from ship consumes a substantial time any where between one to two weeks, and thereafter it is required to be transported to Delhi by trains, while the trains are not promptly available for the transportation of goods and normally consumes not less than one month to reach the goods to Delhi where again about a fortnight is consumed in making the goods reach the factory premises possible. It has been further submitted that restricting importation of the said goods through Bombay port and Delhi ICD would also visit the petitioners with otherwise avoidable extra costs which were never in the contemplation of the petitioners. The goods imported through Delhi ICD in containers would continue to remain under the bond of the Customs Officers and it would necessitate an extra cost. The petitioners intend to import the said goods regularly through ICD Sanganer where, according to the petitioners, all facilities exist for clearance of the said goods, including the facilities for checking and pre -mutilation and warehousing etc.

(3.) THE petitioners have come with the case that prior to the Import and Export Policy, 1988 -91 different Collectors of Customs at different ports had issued various public notices laying down the standard of mutilation. This gave them unbridled powers to act in a most arbitrary fashion and adopt the policy of pick and choose. The representatives of the trade impressed upon the Government of India to issue a uniform policy with regard to the standard of required mutilation so that the business community was not harassed and there should be no scope for arbitrariness and corruption. With this end in view for the first time, in the policy 1988 -91, specific clause was inserted stating that mutilation must conform to the requirement specified by the Customs Authorities in their notification. Despite the assurance given by the Government of India that such notification would be issued shortly, no such notification laying down the guidelines for the required standard of mutilation has so far been issued. The Import Policy uses the expression 'completely pre -mutilated condition'. The policy required that the rags should be so worn out and soiled or it must appear to be beyond cleaning or beyond repair. Open General Licence which is statutorily issued document in contradiction to the public notice also contains the same conditions with regard to the required mutilation. The sole idea is that the imported items should not be capable of being re -used as garments. But the policy was never intended to impose any condition that the mutilation should be in a particular manner or that the goods should be in a particular shape, size or form. The importability is to be determined with respect to the conditions under the policy and that the Open General Licence and the condition to be applied would be whether the goods can be said to be pre -mutilated and as such cannot be re -used as they are imported. According to the petitioners, the customs authorities have no power to impose any special condition or set any other standard for determining as to what is rags. But the Customs Authorities are seeking to impose further condition with regard to the condition of the rags, which tantamounts to amending the import policy, whereas the modification of such policy is a matter for the Import Trade Policy Control Authority alone and the Customs Authorities have only to give effect to the policy and cannot seek to alter or amend the same.