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Issues:
1. Interpretation of Import Policy 1992-1997 regarding clearance of imported goods. 2. Classification of diesel engine and tools as capital goods or consumer goods. 3. Requirement of license for import under different paragraphs of the policy. Issue 1: Interpretation of Import Policy 1992-1997 The case involved the import of goods by the respondent under paragraphs 25 and 29 of the Import Policy 1992-1997. The department disputed the clearance of certain items, specifically diesel engines, as they were deemed not suitable for industrial use. The Deputy Commissioner confirmed the proposal for clearance with a fine. Issue 2: Classification of Diesel Engine and Tools The Commissioner (Appeals) accepted the respondent's argument that the diesel engine was intended to provide extra power in the factory during power shortages. The diesel engine was considered not to be consumer goods but rather a capital good. The tools, although found to be rusted and second hand, were classified as capital goods under paragraph 22 or second hand goods under paragraph 25 of the policy. Issue 3: Requirement of License for Import The department contended that the diesel engine, being part of a motorcar, did not qualify as capital goods under paragraph 25 and should require a license under paragraph 29. Similarly, the tools, being second hand and not clearly specified, were argued to fall under paragraph 29, necessitating a license for import. However, the Commissioner's reasoning was based on the broad definition of capital goods under the policy, encompassing equipment indirectly required for production or service, which covered the tools in question. In conclusion, the appeal was dismissed, upholding the Commissioner (Appeals)'s decision regarding the classification of the diesel engine and tools as capital goods under the Import Policy 1992-1997.
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