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Appeal against order of Commissioner of Customs (Appeals) rejecting three appeals on the same issue regarding classification of imported toy parts under OGL. Analysis: The appellants, who are manufacturers of toys, imported toy parts under OGL as per Exim Policy 1992-97. A classification issued by DGFT dated 21-8-96 classified the goods as 'free' instead of 'Restricted'. However, the lower authorities confirmed the goods as restricted and imposed confiscation and penalty, leading to the appeals. Upon examination, the Tribunal found that the goods were imported before the classification change on 25-3-96, rendering the 'Restricted' classification inapplicable. The subsequent clarification by DGFT rectified an error, acknowledging that toy parts, as raw materials for a toy manufacturer, were not consumer goods. The Tribunal noted that the DGFT circular itself admitted incorrect classification in many cases, indicating no change in policy. Consequently, the Tribunal concluded that the confiscation and penalty imposed were unwarranted in this case. Citing the DGFT circular's acknowledgment of incorrect classification and the nature of the imported goods as raw materials, the Tribunal set aside the redemption fine, canceled the penalty, and allowed the appeals. Therefore, the Tribunal ruled in favor of the appellants, overturning the lower authorities' decision and ordering the setting aside of redemption fine and penalty, based on the findings that the goods were wrongly classified as restricted and were rightfully imported under OGL as raw materials for toy manufacturing.
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