P.C. Jain, Member (T)

1. Question involved in this appeal is whether the goods found on examination as "broken pearls" not in powder form, but of non-jewellery quality", are covered by OGL under Appendix 6, List 4, Part B, SI. No. 8 of the I.T.C. Policy or whether they require an Import Control Licence in terms of SI. No. 388 (a) of Appendix-3-(A) of I.T.C. Policy April, 1985-March' 1988. The other question involved is whether these goods are classifiable under Tariff Heading 71.01 and enjoy the benefit of Notification 247/76-Cus., dated 2.8.1976 or whether they are classifiable under Chapter 5, Heading 05.01/15 (1) as products of animal origin not elsewhere specified or included.

2. The department contends that Appendix-6, List 4, Part-B SI. No. 8 read with Footnotes (i) and (ii) allows import of Pearls, when the pearls are in powder form and of non-jewellery quality. In other words, the pearls allowed under the aforesaid SI. No. OGL should be both in powder form and of non-jewellery quality. Since the pearl under import are not in powder form, though on non-jewellery quality, these are not permissible to be imported under the OGL under the aforesaid SI. No. and therefore, lice