Split consignments of plastic parts treated as restricted consumer goods when composite commercial identity showed an assembled product

Split consignments of plastic parts were treated as a single commercial product because the items, taken together, constituted plastic containers in SKD/CKD condition requiring little assembly. On that basis, the import was regarded as restricted consumer goods under the Exim Policy, and indirect import of parts could not be used to bypass a direct import restriction. On penalty, the absence of goods for confiscation meant no redemption fine was imposed, while the appellant's use of the goods for packing purposes justified leniency. The penalty was therefore sustained but reduced to Rs. 1 lakh.

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Issues: (i) whether the imported plastic parts, taken together, were consumer goods restricted for import under the Exim Policy; (ii) whether the penalty imposed required interference and, if so, to what extent.

Issue (i): whether the imported plastic parts, taken together, were consumer goods restricted for import under the Exim Policy.

Analysis: The imported items were found to be parts of complete plastic containers imported in a split-up manner. The adjudicating authority recorded that the goods, when viewed collectively, constituted plastic containers in SKD/CKD condition and that very little skill was required for assembly. The classification was upheld on the basis that the import restriction applied according to the capability of the product for consumer use, and that what could not be imported directly could not be brought in indirectly by splitting the consignments.

Conclusion: The import was correctly treated as restricted consumer goods and the finding was upheld against the assessee.

Issue (ii): whether the penalty imposed required interference and, if so, to what extent.

Analysis: The authority noted that the goods were not available for confiscation, so no redemption fine was imposed. At the same time, the appellant had used the goods for packing purposes and not sold them in the market, which justified leniency in the quantum of penalty.

Conclusion: The penalty was sustained but reduced from Rs. 5 lakhs to Rs. 1 lakh in favour of the assessee to that extent.

Final Conclusion: The impugned import was held to be restricted, but the monetary penalty was substantially reduced, resulting in only partial relief to the assessee.

Ratio Decidendi: Goods imported in split consignments may be treated according to their composite commercial identity, and import restrictions cannot be avoided by indirect import of parts where the assembled product is itself restricted.

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