2003 (10) TMI 91 - AT - Customs

Summary

Issues:
Unauthorized import of medical equipment without appropriate import license and Importer-Exporter Certificate, confiscation of equipment, imposition of redemption fine and penalty under Section 112(a) of the Customs Act, interpretation of EXIM Policy 1997-2002 regarding import of second-hand capital goods, request for leniency in penalties.

Analysis:
The case involved the unauthorized import of medical equipment without the necessary import license and Importer-Exporter Certificate. The original authority had ordered the confiscation of the equipment, imposed a redemption fine of Rs. 1,50,000, and a penalty of Rs. 50,000 under Section 112(a) of the Customs Act. The Commissioner (Appeals) upheld this decision, leading to the appeal before the Tribunal.

During the hearing, the appellant's counsel argued that the imported medical equipment fell under the definition of "capital goods" as per the EXIM Policy 1997-2002. It was contended that the import of second-hand capital goods not more than 10 years old was permissible under the policy. The Department claimed that the import was governed by the policy in place until 31 March 2000, requiring the surrender of a Special Import Licence equivalent to 5 times the CIF value of the imported goods. As the appellants failed to produce the necessary license, they were held liable for fines and penalties.

Upon reviewing the submissions and provisions of the EXIM Policy applicable until 31 March 2000, the appellant's counsel conceded the unauthorized nature of the import. However, they requested leniency in the penalties imposed. The Tribunal acknowledged the unauthorized import but noted that after 31 March 2000, the importation of old medical equipment not exceeding 10 years old was freely permissible. Considering the charitable nature of the importers and the intended use for medical services, the Tribunal decided to show leniency. Consequently, the redemption fine was reduced to Rs. 5,000, and the penalty was set aside, allowing the appeal in favor of the appellants.