TaxTMI 
TaxTMI 
05 Jul 2014 
What is the policy provision for import of second hand Capital Goods?
Import of second hand Capital Goods which are not more than 10 years old shall be allowed freely. However, the same shall not be transferred, sold or otherwise disposed off within a period of two years from the date of import, except with the prior permission of DGFT.
Further, Second Hand Capital Goods including refurbished/reconditioned spares are freely permitted. But other second hand goods are restricted. Import of Second hand PC, laptop, air conditioner, DG set, photocopier will require authorization. Import of re-manufactured goods will also require authorization. [para 2.17 of FTP 2009-14].
Can second hand capital goods be imported under this scheme?
Second hand capital goods, without any restriction on age, may also be imported under EPCG Scheme. [Refer para 5.2 of FTP 2009-14Concessional 3% Duty EPCG Scheme, w.e.f. 23.08.2010].
Import of Second Hand Capital Goods para 2.33HBP Vol 1 2009-14
Import of second hand capital goods including refurbished / reconditioned spares, except those of personal computers / laptops, shall be allowed freely, subject to conditions for following categories:
Import of second hand computers including personal computers / laptops and refurbished/reconditioned spares thereof is restricted.
Import of refurbished / reconditioned spares of capital goods, other than those of personal computers/laptops will be allowed on production of a Chartered Engineer certificate that such spares have at least 80% residual life of original spare.
Para 2.33A, Customs or any other Central or State Government authority may avail of services of Inspection and Certification Agencies in Appendix 5 of the HBP v1, for certifying residual life as well as valuation / purchase price of capital goods.
Whether pre-importation expenses are required to be added?
Pre-importation expenses like ‘Dismantling Charges’ are to be added in case of second hand machinery – Bombay Dyeing v CC-1991 1990 (2) TMI 212 - CEGAT, NEW DELHI – Confirmed in Bombay Dyeing and Mfg v CC 1997 (2) TMI 101 - SUPREME COURT OF INDIA . Essar Gujarat Ltd. v CC -1991 (2) TMI 250 - CEGAT, NEW DELHI – Confirmed in CC V Essar Gujarat Ltd. 1996 (11) TMI 426 - SUPREME COURT OF INDIA