2007 (2) TMI 79 - AT - Customs

EXIM Revenue contended that appellant is contravened the provision of EXIM policy relating to import of second-hand goods by importing the good without license Held that there is no mala fide on the part of the respondent importer and set aside the penalty and redemption fine

Summary

Issues:
1. Import of old and used Laptop computers/hard disk drives without a specific license.
2. Interpretation of Exim Policy and Handbook of Procedures regarding import of second-hand capital goods.
3. Effect of Policy Circular and Government clarification on retrospective application.
4. Applicability of penalty and redemption fine under the Customs Act.

Analysis:
1. The Revenue appealed against the Order-in-Original allowing the import of old and used Laptop computers and related components without a license, contending that these items do not qualify as capital goods under the Exim Policy.

2. The Adjudicating Authority determined that the imported goods fell within the definition of capital goods as per the Exim Policy and Handbook of Procedures, thereby permitting their importation without a specific license due to being under 10 years old. The Commissioner's reasoning emphasized the broad definition of capital goods and the absence of pre-loaded software not affecting the classification of Laptop computers as automatic data processing machines.

3. The issue of retrospective application arose concerning a Policy Circular and a Government clarification post the Order-in-Original. The Respondents argued for a prospective effect of these documents, citing relevant case laws to support their stance, while the Revenue contended that the circular and clarification reiterated existing legal positions and should have retrospective application.

4. Considering the conflicting interpretations and the absence of mala fide intent on the part of the importer, the Tribunal decided not to impose penalties or redemption fines on the imported goods, particularly due to the rapid obsolescence in the Computer Industry. The Tribunal upheld the original order, emphasizing the lack of justification for penalties and fines in this case.

In conclusion, the Tribunal dismissed the Revenue's appeal, maintaining the decision to allow the import of the goods without penalties or fines, considering the evolving nature of technology and the interpretation of relevant legal provisions.