2018 (2) TMI 1504 - AT - Customs

Import of restricted item - old and used ballast wagon for demag - It appeared to Revenue that the same is not capital goods but only accessory and as such, being a second hand used part, was not importable without specific licence as per para 2.17 of the Foreign Trade Policy for the period 2004-09. Held that - the appellant have imported a second hand spare parts for equipment which enhanced capacity of the existing crane and the same has resulted in modernization or technological upgradation of the existing crane - the same was appropriately imported under the provisions of Foreign Trade Policy 2004-09, as is evident from para 9.2 read with para 9.12 of the Policy. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Import of 'old and used ballast wagon for demag' held liable for confiscation under Customs Act, 1962.
- Interpretation of capital goods under the Foreign Trade Policy.
- Appeal against the order of the Commissioner of Customs.

Issue 1: Import of 'old and used ballast wagon for demag'
The appellant, M/s ABG Infralogistics Ltd, appealed against an Order-in-Original passed by the Commissioner of Customs, Mumbai, regarding the import of an 'old and used ballast wagon for demag.' The goods were valued at ?2,02,86,653 and were held liable for confiscation with an option to redeem on payment of a fine and penalty under Section 112(a) of the Customs Act, 1962.

Issue 2: Interpretation of capital goods under the Foreign Trade Policy
The Commissioner observed that for machinery to be considered capital goods, it must be required to render services directly. In this case, the ballast wagon, although enhancing the crane's capacity, was not directly rendering services. The appellant contended that the spare parts imported enhanced the capacity and upgraded the existing crane, falling under the definition of capital goods as per the Foreign Trade Policy.

Issue 3: Appeal against the order of the Commissioner of Customs
The Tribunal, after considering the provisions of the Foreign Trade Policy, noted that the imported spare parts enhanced the capacity and upgraded the existing crane, resulting in modernization or technological upgradation. The Tribunal found that the import was appropriately done under the Foreign Trade Policy, allowing the appeal and setting aside the impugned order. The appellant was entitled to consequential relief as per the law.

This judgment highlights the importance of correctly interpreting the definitions of capital goods under relevant policies while considering appeals against orders related to import liabilities under the Customs Act, 1962. The Tribunal's decision was based on a thorough analysis of the facts, provisions of the Foreign Trade Policy, and the impact of the imported spare parts on the existing machinery's capacity and efficiency.