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1. Contravention of Import Export Policy by importing second-hand goods. 2. Reduction in redemption fine and setting aside of penalty. 3. Classification of imported computers as capital goods. 4. Liability for penal action due to importing prohibited goods. Issue 1: Contravention of Import Export Policy by importing second-hand goods The Revenue appealed against an order-in-appeal passed by the Commissioner (Appeals) regarding the import of second-hand computers. The adjudicating authority confiscated the goods, citing the need for a special import license for second-hand goods. The Commissioner (Appeals) reduced the redemption fine but set aside the penalty. The Revenue contended that the import contravened the Import Export Policy, requiring a special import license for second-hand goods. The Tribunal noted that the imported goods were over 10 years old, making them prohibited under the policy. The Tribunal upheld the reduction in redemption fine but imposed a penalty of Rs. 20,000 under Section 112(a) of the Customs Act due to the import of prohibited goods. Issue 2: Reduction in redemption fine and setting aside of penalty The Commissioner (Appeals) had reduced the redemption fine from Rs. 2 lakhs to Rs. 40,000 and set aside the penalty imposed on the appellant. The Revenue argued that this reduction and setting aside of the penalty were not sustainable as the import contravened the Import Export Policy. However, the Tribunal found no infirmity in the order reducing the redemption fine to Rs. 40,000. Despite this reduction, the Tribunal held that penal action was warranted due to the importation of prohibited goods, imposing a penalty of Rs. 20,000 under the Customs Act. Issue 3: Classification of imported computers as capital goods The respondent contended that the imported second-hand computers were to be used for the service of schools and were considered capital goods for their software development business, thus not requiring an import license. However, the adjudicating authority noted that the computers were outdated and used, making them prohibited under the Import Export Policy. The Tribunal agreed with the adjudicating authority's assessment that the imported goods were prohibited due to their age and condition, leading to the imposition of a penalty for importing such goods. Issue 4: Liability for penal action due to importing prohibited goods Despite the reduction in the redemption fine, the Tribunal held the respondents liable for penal action for importing prohibited goods. The Tribunal imposed a penalty of Rs. 20,000 under Section 112(a) of the Customs Act, considering the age and condition of the imported computers as outdated and used, thus violating the Import Export Policy. The appeal was allowed in part, with the penalty being upheld while the redemption fine was reduced, reflecting the Tribunal's assessment of the case. ---
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