1997 (5) TMI 252 - AT - Customs

Summary

Issues:
1. Interpretation of import policy regarding the classification of goods as capital goods or raw materials.
2. Application of import policy provisions on the import of measuring instruments under restricted categories.
3. Determination of whether the goods imported fall under the prohibited category of Appendix 2B of the Import Policy.
4. Consideration of the clarification provided by the Chief Controller of Imports and Exports regarding the import of similar goods.
5. Analysis of the definitions of "instrument," "equipment," and "system" in the context of the import policy.

Detailed Analysis:

1. The appellant imported Magnetic Flow meter Transmitter (MFT) described as equipment to measure liquid flow. The Customs contended that the goods fell under Entry 175 of Appendix 2B of the Import Policy 1990-93. The Collector confiscated the goods, stating they were not entitled to import under the REP Licence due to policy restrictions.

2. The appellant argued that the goods were capital goods, not raw materials, components, or spares, falling outside the scope of Appendix II. They claimed the goods were complete equipment, not listed in Appendix B, and relied on a clarification from the Chief Controller of Imports and Exports.

3. The Departmental representative cited Paragraph 7(12) of the Policy, indicating that Appendix 2B covered capital goods as well. He argued that the CCI & E clarification was for a different product, not applicable to the goods in question.

4. The Collector found the goods aligned with the description in Entry 175 of Appendix II, covering electronic equipment. The Policy provisions specified import procedures for measuring instruments, including import under capital goods procedure or supplementary licensing procedure.

5. The judgment highlighted that modern measuring instruments often contain electrical components. The definitions of "instrument," "equipment," and "system" were discussed to interpret the import policy. The omission of "instrument" from Entry 175 was deemed significant, indicating the intent not to prohibit the import of such instruments permitted under Chapter III.

6. The Tribunal allowed the appeal, setting aside the impugned order, emphasizing the need to consider the interpretation of the import policy provisions and the benefit of doubt to the importer based on the complex nature of measuring instruments and the specific policy framework governing their importation.