Case: Collector Of Customs, Bombay Vs. Swastic Woollen (P) Ltd. &amp; Ors

These appeals under section 130E of the Customs Act, 1962 (hereinafter called "the Act") arise from the decision of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (hereinafter "CEGAT"). Section 130E(b) permits appeal to this Court from any order of the said Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment. The appeals are at the instance of the Revenue authorities, namely, the Collector of Customs, Bombay. The respondent No. 1/importer is a company of small-scale sector in Punjab and manufacturers various kinds of yarns. It is stated that on 19th May, 1984, the respondent No. 1 imported consignment of wool materials valued at Rs. 3, 75, 079 and claimed the benefits under Notification No. 240/76-Cus. The respondent also claimed that the wool materials were wool wastes, hence, the goods in question were not liable to customs duty. It is stated that on 6th November, 1984, an Expert Committee, comprised of Deputy Chief Chemist, Assistant Collector and Senior Scientific Officer, was set up for the examination of the goods in question. The Expert Committee after examination opined that the wool goods were other than wool wastes, hence, the goods were liable to duty of customs. On or about 2nd January, 1985, the department issued a notice to the respondents calling upon them to show cause as to why action under section 111(d) and (m) and section 112 of the Customs Act and section 3 of the Imports and Exports (Control) Act, 1947 should not be taken against them. The respondents submitted the reply to the notice. The Additional Collector of Customs examined the whole case and adjudicated on 19th March, 1986 and the respondents were charged with the violation of the Import Control Regulations. The Additional Collector of Customs held that the the classification of the goods should be under the heading 53.01/05 and also found the import to be unauthorised. Accordingly, the goods in question were confiscated but he gave option to the respondents to redeem the goods on payment of Rs. 90, 000 as fine. The respondent No. 1/importer preferred an appeal to the Appellate Tribunal, New Delhi, against the order of the Assistant Collector, Bombay, and the Appellate Tribunal, New Delhi, after going through the provisions of the Act and the notification allowed the appeal and set aside the order of the Additional Collector on 19th January, 1987.The question involved in these appeals before the CEGAT and the question involved herein in these appeals is, whether these goods are wool wastes and, as such, entitled to the benefit of exemption under the aforesaid notification. As it is apparent from the Tribunals order, the assessee or the dealer contends that these are wool wastes. The consignments were examined on percentage basis. On examination, it was found, however, that these items contained long length of slivers/tops, etc. A thorough examination of these consignments was, therefore, ordered to verify the actual description of the goods. A technical panel was constituted for the purpose consisting of the Deputy Chief Chemist, Bombay, as Chairman, the Assistant Collector of Customs and a Senior Scientific Officer of the Office of the Textile Committee as the members. Based on the panels findings, show cause notices were issued to the importers that the goods appeared to be other than wool wastes, there were long lengths of slivers/tops or deliberately broken tops which could be easily joined at the end to prepare them ready for spinning. The importers were charged with the violation of the Import Control Regulations and asked to explain why action should not be taken under section 111(d) and (m) of the Act, and also why the goods should not be charged to duty under heading 53.01 and now 53.01/05(1) of the Customs Tariff Schedule read with Customs Notification No. 154-Cus. dated 4th July, 1979 at the rate of 40 per cent plus auxiliary duty at 10 per cent plus additional duty of customs at Rs. 9.375 per kg. under item No. 43 of the Central Excise Tariff Schedule read with the relevant notification. As mentioned hereinbefore adjudication proceedings were held by the Additional Collector of Customs, Bombay. In the said adjudication proceedings the members of the technical panel were cross-examined by the counsel. The Additional Collector held that the goods were not wool wastes but processed woollen products other than wool tops/raw wool and were classifiable under heading 53.01/05(1). In other words, he found that since the goods were found to be not wool wastes, the licences produced for wool waste were not acceptable and, therefore, the imports were unauthorised. Accordingly, the confiscation of the goods was ordered but option to redeem the goods on payment of fine was permitted. This order as mentioned hereinbefore was challenged before the CEGAT.The Tribunal noted the history of the case and addressed itself to the points at issue. The question before the Tribunal was whether the goods were wool wastes or processed woollen products other than wool tops/raw wool. The Revenues case was that the goods could not be treated as wool wastes. It may be reiterated that the goods were held to be not entitled to duty exemption under the relevant customs notification in issue. The Tribunal went into the details of the report of the expert panel. That report recognised that it was not possible to give opinion by visual observations of the material and that there was no specification laid down for the same by the I.S.I. or International Standard Organisations. The Tribunal noted that the question would have to be understood on the basis of trade understanding.

Court's reasoning:
The expression "wool wastes" is not defined in the relevant Act or in the notification. This expression is not an expression of art. It may be understood as in most of financial measures where the expressions are not defined not in a technical or preconceived basis but on the basis of trade understanding of those who deal with these goods as mentioned hereinbefore. The Tribunal proceeded on that basis. The Tribunal has not ignored the Technical Committees observations. We have noted in brief the Tribunals handling of that report. The Tribunal has neither ignored the observations of C.C.C.N. nor the Boards Tariff Advice. These observations have been examined in the light of the facts and circumstances of the case. One of the basic factual disputes was long length of sliver tops. Having regard to the long length, we find that the Tribunal was not in error.Whether a particular item and the particular goods in this case are wool wastes, should be so considered or not is primarily and essentially a question of fact.The decision on such a question of fact must be arrive at without ignoring the material and relevant facts and bearing in mind the correct legal principles. Judged by these yardsticks the finding of the Tribunal in this case is unassailable. We are, however, of the view that if a fact finding authority comes to a conclusion within the above parameters honestly and bona fide, the fact that another authority, be it the Supreme Court or the High Court, may have a different perspective of that question, in our opinion, is no ground to interfere with that finding in an appeal from such a finding. In the new scheme of things, the Tribunals have been entrusted with the authority and the jurisdiction to decide the questions involving determination of the rate of duty of excise or to the value of goods for purposes of assessment. An appeal has been provided to this Court to oversee that the subordinate tribunals act within the law. Merely because another view might be possible by a competent court of law is no ground for interference under section 130E of the Act though in relation to the rate of duty of customs or to the value of goods for purposes of assessment, the amplitude of appeal is unlimited. But because the jurisdiction is unlimited, there is inherent limitation imposed in such appeals. The Tribunal has not deviated from the path of correct principle and has considered all the relevant factors. If the Tribunal has acted bona fide with the natural justice by a speaking order, in our opinion, even if superior court feels that another view is possible, that is no ground for substitution of that view in exercise of power under clause (b) of section 130E of the Act.In the facts and in the circumstances, in our opinion, the Tribunal has acted within jurisdiction. The Tribunal has taken all relevant and material facts into consideration. The Tribunal has not ignored any relevant and material facts. The Tribunal has not applied any wrong principles of law. Therefore, the decision of the Tribunal is unassailable even in the appeal before this Court.