1990 (9) TMI 105 - HC - Customs

Summary

Issues:
1. Disallowance of Transfer of Residence (TR) benefit for a portable Honda Generator.
2. Classification of the portable Generator as a "household effect" under Transfer of Residence Rules, 1978.

Detailed Analysis:
Issue 1:
The petitioner, who served as an Attache and Private Secretary in Japan, returned to India and claimed TR concession for a portable Honda Generator and a Music System purchased during his stay in Japan. The Assistant Collector of Customs disallowed the TR benefit for both items, citing the generator as non-household type. The Collector of Customs (Appeals) upheld this decision, but the Joint Secretary partially allowed the revision, granting TR benefits for the Music System but not the generator. The Joint Secretary's reasoning was based on the petitioner's limited use of the generator during picnics, deeming it unsuitable as a household item. The petitioner challenged this decision through a writ petition, arguing that the generator was in use for over a year, supported by purchase documents and possession confirmation. The court found the revisional authority's decision erroneous, emphasizing the continuous possession and use of the generator for more than a year, overriding the new appearance factor.

Issue 2:
The court delved into the definition of "household effect" to determine if the portable Generator qualified for TR benefits. Referring to legal definitions, it concluded that household effects encompass items contributing to the householder's use or convenience. Considering the Customs Act and Transfer of Residence Rules, the court highlighted the distinction between "baggage" and "bona fide baggage," with household effects falling under both categories. Analyzing the rules and explanations, the court affirmed that the generator met the criteria for exemption from duty under TR Rules. It further justified the generator as a personal use item, essential for daily life, and not intended for commercial purposes. Additionally, inconsistencies within the Customs department's treatment of generators as household effects supported the petitioner's claim. Ultimately, the court ruled in favor of the petitioner, directing the release of the Honda Portable Generator under TR benefits without demurrage, with costs awarded to the petitioner.

In conclusion, the court's judgment overturned the disallowance of TR benefits for the portable Honda Generator, establishing its classification as a "household effect" under Transfer of Residence Rules, 1978, based on the petitioner's continuous possession and personal use for over a year, and the item's essential nature for daily living.