2007 (4) TMI 537

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..... ertaking the drilling operations, the appellants had placed a purchase order with M/s. Regent Asia FSE, Dubai, for import of two numbers of Caterpillar engines, model CAT 3408 and imported the same into India. These engines were second hand engines. The appellants claimed the same to be capital goods entitled for exemption under Sr. No. 218 of Notification No. 21/2002-Cus. However, the Commissioner held that engines cannot be treated as capital goods and therefore cannot be imported into India without a valid licence. He accordingly confiscated the engines and allowed the same on payment of redemption fine of Rs. 15 lakhs and also imposed penalty of Rs. 5 lakhs on the appellants under Section 112(a) of Customs Act, 1962. 2. The learned Ad .....

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..... considered as part of rig and when accessories are considered as capital goods, parts stand on a higher footing and therefore they have to be considered as capital goods within the meaning of para of 9.12 of Foreign Trade Policy. In alternate, it was submitted that the engines can be considered both as plant and machinery. It was submitted that the word plant is not defined the Foreign Trade Policy but the Hon ble Supreme Court in the case of Commissioner of Income-tax v. Taj Mahal Hotel - [1971 82 ITR 0044] has held that the sanitary and pipeline fittings of hotel would fall within the expression plant . Similarly, in the case of Scientific Engineering House Pvt. Ltd. v. Commissioner of Income-tax - AIR 1986 S.C. 338 it has been held th .....

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..... eign Trade Policy and if the definition refers only to accessories and not parts, it has to be considered that it was a conscious omission as otherwise definition would have included parts also and therefore the scope of the definition cannot be expanded to include parts merely because accessories are also included. It was submitted that the decisions of the Apex Court relate to Income-tax Act and Employees Liabilities Act, which are on different footing and given in the background of circumstances dealt with under those provisions. However, in the present case, once the definition of capital goods is given in the Foreign Trade Policy, we cannot import the definition of plant in the given case relating to Income-tax Act and Employees Liabil .....

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