2003 (1) TMI 626 - AT - Customs

Importers Lose Appeal: Computers Confiscated, Fined Rs. 4 Lakhs, Penalty Rs. 2 Lakhs

The appellate tribunal upheld the decision to confiscate personal computers imported without a valid license, imposing a fine of Rs. 4 lakhs and penalty ... Classification of personal computers as consumer electronic equipment - requirement of specific import licence for computers not covered under OGL - invalidity of REP licence with flexibility for unauthorised imports - confiscation and penalty for unauthorised import under the Customs ActClassification of personal computers as consumer electronic equipment - requirement of specific import licence for computers not covered under OGL - Imported personal computers are consumer electronic equipment and therefore not covered under OGL, requiring a specific import licence for clearance. - HELD THAT: - The Tribunal accepted the adjudicating authority's finding that the imported personal computers can directly satisfy human needs and fall within the description of consumer goods. Given that such computers are not confined to professional or industrial use, they cannot be treated as items covered by the Open General Licence. In consequence, imports of computers/computer-based systems and peripherals not allowed under OGL require a specific import licence and prior clearance as stipulated in the policy. The REP licence produced by the appellants, even with the flexibility provision invoked from para 192, was therefore not valid to cover the subject imports. [Paras 1]The classification and consequent requirement of a specific import licence were upheld; the REP licence did not validate the unauthorised import.Confiscation and penalty for unauthorised import under the Customs Act - invalidity of REP licence with flexibility for unauthorised imports - Confiscation of the imported goods and imposition of penalty were sustainable because the import was unauthorised. - HELD THAT: - Having held that the goods were consumer electronic equipment and that the licence relied upon did not cover the import, the Tribunal found the import to be unauthorised. In view of the unauthorised nature of the import, the measures imposed by the Collector - confiscation with option of redemption on payment of a fine and a monetary penalty on the importers - were held to be legally maintainable. The appellants failed to place any material before the Tribunal to controvert the classification or to justify the licence relied upon. [Paras 2]The confiscation and penalty imposed by the adjudicating authority were upheld and the appeal was rejected.Final Conclusion: The appeal is dismissed. The Tribunal upholds the finding that the imported personal computers are consumer electronic goods not covered by OGL, that the REP licence with flexibility did not validate the import, and that confiscation and the penalty imposed for unauthorised import are sustainable. The appellate tribunal upheld the decision to confiscate personal computers imported without a valid license, imposing a fine of Rs. 4 lakhs and penalty of Rs. 2 lakhs under Section 112(a) of the Customs Act. The importers failed to prove the computers were not consumer goods, which required a specific import license. The appeal was rejected.