2001 (9) TMI 609 - AT - Customs

Summary

Issues:
- Import of old and used industrial sewing machines by a trader vs. an actual user
- Interpretation of Import Export Policy regarding import of second-hand capital goods
- Confiscation of imported machines, redemption fine, and imposition of personal penalty

Analysis:

Issue 1: Import of old and used industrial sewing machines by a trader vs. an actual user
The appellant imported old and used industrial sewing machines under the Import Export Policy. The main dispute was whether such machines could be imported by a trader or only by an actual user. The appellant argued that nowhere in the policy did it mention that only actual users were eligible for importing second-hand capital goods. They cited para 5.4 of the handbook of procedure, which allowed import of second-hand capital goods on surrender of a Special Import Licence equivalent to five times the CIF value, with a commitment not to transfer or sell the goods for two years. The Commissioner, however, implied an actual user condition and referred to a clarification by the Deputy Director of DGFT stating that import could only be done by actual users.

Issue 2: Interpretation of Import Export Policy regarding import of second-hand capital goods
The Commissioner confiscated the machines based on the implied actual user condition, as per para 5.4 of the policy and the DGFT's clarification. However, the appellant argued that the policy did not explicitly restrict import to actual users and that the language of para 5.4 was clear about the conditions for import, without specifying that only actual users could import. The appellant also highlighted that the policy allowed for disposal or sale with DGFT permission, indicating that traders could approach DGFT after importation for such actions.

Issue 3: Confiscation of imported machines, redemption fine, and imposition of personal penalty
The Commissioner's order was based on the advice of the DGFT, introducing an implied actual user condition. However, the appellate tribunal noted that the policy language was clear and unambiguous, and the intention of the legislature was irrelevant when the language was explicit. Since the policy did not specify that only actual users could import, the introduction of such a condition was deemed improper. The tribunal set aside the impugned order, allowing the appeal and providing consequential relief to the appellants.

In conclusion, the judgment clarified the interpretation of the Import Export Policy regarding the import of second-hand capital goods, emphasizing the importance of clear policy language and rejecting the introduction of implied conditions not explicitly stated.