1988 (11) TMI 252 - AT - Customs

Summary

Issues:
1. Whether the imported goods qualify as permissible spares under OGL Appendix 10(4) of AM 82.
2. Whether the goods imported are considered as complete units of machinery or merely spares.
3. Whether the goods imported meet the criteria for being classified as spares under the import policy.
4. Whether the penalty imposed on the appellants is justified.

Analysis:

1. The appeal was filed against the order of the Addl. Collector of Customs, Bombay, regarding the clearance of four consignments declared as Electrolytic Tinning Line Machinery Spares under OGL Appendix 10(4) of AM 82. The appellants imported these consignments, which were found to be complete units of machinery, old, and used. The appellants argued that these imports were necessary to replace worn-out parts of their plant, claiming they were permissible spares. The Addl. Collector confiscated the consignments and imposed penalties, citing violation of Para 5(3)(iii) of the Imports (Control) Order, 1955, requiring new goods for import under a license. The Tribunal upheld the confiscation, stating that the goods did not qualify as permissible spares under OGL.

2. The Tribunal considered whether the imported goods were indeed spares or complete units of machinery. The appellants contended that the goods were only 10% of the value of a new plant and did not require a Chartered Engineer's certificate for import. However, the department argued that the goods were sections of a plant, not individual spares. The Tribunal found that the appellants failed to provide evidence, such as a Chartered Engineer's certificate, to support their claim that the imports were spares. Considering the size, value, and weight of the items, the Tribunal agreed with the Addl. Collector's decision that the goods were not spares but parts of machinery, justifying the confiscation.

3. The Tribunal assessed whether the imported goods met the criteria for being classified as spares under the import policy. The appellants argued that the goods were ready to replace worn-out parts of the machinery, qualifying as spares under OGL Ap. 10 Item 4 of AM 82. However, the Tribunal found that without a Chartered Engineer's certificate confirming the items as spares, the claim was not substantiated. As the goods did not satisfy the policy's spare parts criteria, the Tribunal upheld the confiscation based on the Addl. Collector's findings.

4. Regarding the penalty imposed on the appellants, the Tribunal acknowledged the doubt surrounding deliberate mis-declaration, as the appellants consistently claimed the goods were spares as per the policy. While upholding the confiscation under relevant customs and import laws, the Tribunal set aside the personal penalties imposed on the appellants, granting them the benefit of doubt. Any paid penalties were to be refunded to the appellants, concluding the judgment.