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Issues involved:
The issues involved in this case are the confiscation of goods under section 111(d) of the Customs Act, 1962, the interpretation of the Import Export Policy 1985-88, and the classification of goods as capital goods under the EXIM Policy. Confiscation of Goods: The petition challenged an order confiscating goods u/s 111(d) of the Customs Act, 1962, for attempting to import compressors for air conditioners against a license not valid for such use. The adjudicating authority found the imports unauthorized and liable for confiscation under the Customs Act. Interpretation of Import Export Policy: The petitioners argued that the goods were covered by the license issued by the licensing authority, citing precedents where customs authorities cannot question the validity of licenses. They contended that the interpretation of the licensing authority on EXIM policy matters should bind customs authorities. Classification of Goods as Capital Goods: The dispute centered on whether the imported compressors qualified as capital goods under the EXIM Policy. The definition of capital goods under the policy includes machinery, equipment, or accessories required for production. The compressors were deemed not to be capital goods as they were used as components in manufacturing air conditioners for sale. Judgment: The High Court upheld the adjudication order, ruling that the compressors were not capital goods as they were used as inputs in the manufacture of end products for sale. The court noted that the penalty imposed on both petitioners was based on common findings and defense, making the order joint and indivisible. As the penalty against one party was not set aside, the petition was dismissed with no costs.
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