Capital goods treatment for imported pump upheld, making licence-free import permissible and cancelling confiscation and penalty.

Imported second-hand reconditioned radial piston pumps required for an extrusion press were treated as capital goods under Para 25 of the Export Import Policy, 1992-1997, because they were indirectly used in manufacture and formed an integral, inseparable part of the plant. The pump was also regarded as a complete article classifiable under Heading 8413.19. On that basis, import without a licence was permissible, and the confiscation and penalty were set aside in favour of the assessee.

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Issues: Whether the imported second-hand reconditioned radial piston pump was capital goods under Para 25 of the Export Import Policy, April 1992 to March 1997, so as to make its import permissible without a licence.

Analysis: The imported pump was required for manufacture of the extrusion press and was therefore indirectly used in connection with manufacture of the appellants' final products. It was also a complete article by itself and classifiable under Heading 8413.19. The Tribunal applied the principle that goods which are inseparable components in the plant used for manufacturing further goods can qualify as capital goods. On that basis, the pump was treated as capital goods within the policy.

Conclusion: The imported pump was held to be capital goods, no import licence was required, and the confiscation and penalty were set aside in favour of the assessee.

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