Capital goods classification under import policy failed for compressors used only as manufacturing inputs, sustaining confiscation and penalty.

Compressor imports for use as components in manufacturing air conditioners were treated as inputs, not capital goods, because their admitted end use was consumption in production rather than installation as plant, machinery, equipment or accessories for production or services. On that basis, the imports fell outside the licence and Exim Policy coverage, and confiscation and penalty were sustained. The document also notes that a composite adjudication order based on identical facts and a common defence should not be disturbed selectively where no contrary final order against the co-noticee is shown, since inconsistent outcomes in the same matter are impermissible.

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Issues: (i) Whether compressors imported for use as components in the manufacture of air conditioners were "capital goods" covered by the import licence and the Exim Policy. (ii) Whether the common adjudication order sustaining confiscation and penalty could be interfered with when no contrary final order against the co-noticee was shown.

Issue (i): Whether compressors imported for use as components in the manufacture of air conditioners were "capital goods" covered by the import licence and the Exim Policy.

Analysis: The expression "capital goods" under the policy was read in its wide sense, but its character depended on the user and purpose for which the goods were brought in. Goods that are installed as plant, machinery, equipment, or accessories for production or rendering services fall within the description. Compressors imported here were not meant for use as independent factory machinery; they were to be consumed as inputs/components in the manufacture of air conditioners for sale in the market. On that footing, they did not answer the description of capital goods under the licence or policy.

Conclusion: The compressors were not capital goods and the import was not covered by the licence; the finding of confiscation and penalty was sustained against the petitioners.

Issue (ii): Whether the common adjudication order sustaining confiscation and penalty could be interfered with when no contrary final order against the co-noticee was shown.

Analysis: The adjudication arose from one composite notice and a single indivisible order based on identical facts and a common defence. Penalty had been imposed on both noticees on inseparable findings, and there was no material to show that the order against the co-noticee had been set aside. In that situation, inconsistent outcomes in the same lis were impermissible.

Conclusion: The common order was not liable to be disturbed on this additional ground.

Final Conclusion: The petition failed on merits and on the additional ground arising from the indivisible nature of the adjudication, so the impugned order was left undisturbed.

Ratio Decidendi: Goods imported under a licence for capital goods are not covered when, on their own admitted end use, they are only inputs or components consumed in manufacturing the final product rather than plant, machinery, equipment, or accessories used for production or services.

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