2016 (11) TMI 909 - AT - Customs

Import of old and used Sail Yacht Cunning Plan for personal use - requirement of import licence - whether old and used Sail Yacht Cunning Plan can be considered as second hand capital goods so as to exempt from requirement of import licence? - Held that - during the policy -2004-09 as well 2009-14 the import of second hand goods were restricted. The import was permissible under license/authorization. Since in the judgment of Anand Mahindra Vs. Commr. Of Cus. (Import), Mumbai-I 2008 (2) TMI 104 - CESTAT MUMBAI which was upheld by the Hon ble High Court of Bombay, it was held that the goods Yacht for personal use is second hand goods, other than second hand capital goods, import thereof is restricted and for import license, authorization from DGFT is required. Hence the goods is liable for confiscation. As regards the submission of the Ld. Counsel that as per licensing notes on chapter 89, the ships, vessels, boats etc. are allowed to be imported without a license; old ships, vessels etc., for the purpose of breaking, are freely importable, I am of the view that only new ships, vessels etc. and old ships, vessels etc. imported for breaking purpose are only freely importable. Whereas in the present case the Yacht imported by the Appellant is neither new nor for breaking purpose. Therefore the submission in this regard is of no help to the appellant. As regard quantum of fine and penalty, I find that the issue and facts of Anand Mahindra case is identical in the present case. In the said judgment against the goods valued ₹ 1,21,32,120/-, a redemption fine of ₹ 5Lacs and penalty of ₹ 50,000/- was confirmed. Therefore following the ratio of the Tribunals and Hon ble High Court judgment in case of Anand Mahindra, the appellant deserves the reduction in fine and penalty. I therefore reduce the redemption fine from ₹ 7.5Lacs to ₹ 2Lacs and penalty from ₹ 1Lac to ₹ 20,000/- Appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
- Confiscation of imported Yacht under Customs Act, 1962
- Applicability of import license for second hand goods
- Interpretation of Foreign Trade Policy regarding import of second hand goods
- Quantum of fine and penalty

Confiscation of imported Yacht under Customs Act, 1962:
The appeal challenged the Order-in-Appeal upholding the confiscation of an imported Yacht under Section 111(d) of the Customs Act, 1962. The appellant imported a second hand Yacht for personal use without obtaining an import license, leading to confiscation and imposition of a fine and penalty. The adjudicating authority justified the confiscation citing the requirement of an import license for second hand goods for personal use. The appellant contended that the Yacht was a second hand capital good and hence exempt from the import license requirement.

Applicability of import license for second hand goods:
The appellant argued that as per the Foreign Trade Policy 2009-14, import of second hand capital goods is allowed freely, eliminating the need for an import license. The Assistant Commissioner contended that the Yacht, intended for personal use, did not qualify as a second hand capital good, making it subject to import restrictions. The dispute centered on whether the Yacht fell under the category of goods requiring an import license.

Interpretation of Foreign Trade Policy regarding import of second hand goods:
The Tribunal analyzed the relevant provisions of the Foreign Trade Policy 2004-09 and 2009-14 to determine the import status of second hand goods, including Yachts. The judgment referenced the case of Anand Mahindra, emphasizing that the import of second hand goods, other than second hand capital goods, is restricted and necessitates an import license. The Tribunal compared the policies to establish the applicability of import restrictions and upheld the confiscation based on the failure to produce the required license.

Quantum of fine and penalty:
In light of the Anand Mahindra case, where a similar situation resulted in a redemption fine and penalty, the Tribunal decided to reduce the fine and penalty imposed on the appellant. The fine was reduced from &8377; 7.5Lacs to &8377; 2Lacs, and the penalty from &8377; 1Lac to &8377; 20,000, aligning with the precedent set by the previous judgment. The Tribunal partially allowed the appeal, granting relief to the appellant on the quantum of fine and penalty.

In conclusion, the judgment addressed the confiscation of the imported Yacht, the necessity of an import license for second hand goods, the interpretation of relevant Foreign Trade Policies, and the adjustment of the fine and penalty based on legal precedents. The decision provided clarity on the import regulations for second hand goods and demonstrated the application of legal principles in determining the outcome of the appeal.