The Customs, Excise And Service Tax Appellate (CESTAT) of the Chennai bench while setting aside the Confiscation of Goods ruled that any goods which fall under the category of equipment apparatus are freely importable as per Foreign Trade Policy (FTP).
M/s.PS Bedi & Co Pvt. Ltd, the appellant imported used and new hand tools of 324 pieces under Bill of Entry dt. 18.9.2012. The Department was of the view that the tools that were imported do not fall under the definition of “Capital Goods” as per para-9.12 of Foreign Trade Policy. The appellant did not have a licence to import such goods and therefore the goods were held to be liable for confiscation. The original authority after due process of law passed the order directing for confiscation of goods with an option to redeem the goods on payment of a redemption fine. The penalty was also imposed. Against such an order, the appellant preferred an appeal before the Commissioner (Appeals) who upheld the same.
Ms. G. Varshitha appeared and argued for the appellant. It was submitted that the goods are used goods which are intended for re-export. The appellant has also re-exported the same. The Department has ordered for confiscation of the goods observing that as per the definition of “Capital Goods” under para 9.12 of FTP, the hand tools do not fall within the definition and therefore are not freely importable. The Counsel submitted that such hand tools would fall under the category of equipment, accessories, apparatus etc. which are included in the definition of “capital goods” as per para 9.12 of FTP.
In the case of Asia Power Projects Ltd. Vs CC Chennai, the Tribunal observed that the goods like hand tools would fall under the category of equipment, instruments for testing, apparatus, and accessories which are included in the definition of “Capital Goods” as per para 9.12 of FTP. So also, it was noted that as per the EPCG scheme, in para 5.2, the definition of ‘capital goods’ does not differentiate between machine tools or hand tools. The confiscation of goods was held to be not legal and proper.
A two-member bench comprising of Ms Sulekha Beevi C S, Member (Judicial) and Mr Vasa Seshagiri Rao, Member (Technical) relying on the decision viewed that FTP, any goods which fall under the category of pieces of equipment, apparatus etc. are freely importable irrespective of their size and nature.
The Tribunal held that the order directing for confiscation of the goods and imposition of redemption fine and penalties cannot be sustained. The impugned order was set aside by the CESTAT.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
