1983 (12) TMI 312 - AT - Customs

Summary

Issues:
1. Interpretation of the term "spare" under the Import Policy.
2. Classification of the Inclinometer as a spare or capital goods.
3. Validity of the penalty imposed on the appellant.

Analysis:
1. The appellant, a manufacturer of aluminium products, imported an Inclinometer for use in its Rotary Kiln. The dispute arose regarding whether the Inclinometer qualifies as a spare under the Import Policy. The appellant argued that the Inclinometer falls under the definition of spare as per the policy and should be allowed for import under O.G.L. The appellant's representative highlighted the definition of spare as a part ready for substitution and pleaded for the acceptance of the Inclinometer as a spare. The appellant also pointed out the low value of the Inclinometer compared to the company's overall capital goods.

2. On the other hand, the Revenue contended that the Inclinometer should not be classified as a spare but as a complete instrument itself. The Revenue representative referred to the definitions of spare and capital goods under the Import Policy to support their argument. They emphasized that the Inclinometer can independently function and should not be considered a spare part. Additionally, the Revenue cited specific items and policies to assert that the Inclinometer did not qualify for import under O.G.L.

3. After hearing both parties, the Tribunal focused on determining whether the Inclinometer could be considered a spare for the Rotary Kiln as per the Import Policy. The Tribunal noted that the Inclinometer is an independent instrument that can function without the Kiln. Despite the Revenue's acceptance of the classification, the Tribunal concluded that such acceptance did not automatically align with the Import Policy for the relevant year. The Tribunal upheld the Collector (Appeals)'s decision regarding the classification of the Inclinometer. However, the Tribunal found the penalty imposed excessive and reduced it to &8377; 1,650. The Revenue was directed to refund any excess amount paid by the appellant within two months. Ultimately, the appeal was dismissed for statistical purposes.

This judgment clarifies the interpretation of the term "spare" under the Import Policy, the classification of imported goods, and the imposition of penalties in customs cases.