Valid SEZ import permission and technical description error did not justify confiscation, fine or penalty.

Import of reconditioned computer monitors by an SEZ unit was treated as permissible where the unit acted under a valid letter of permission for manufacture and reconditioning of electronic items and the goods fell within the DGFT classification making such imports freely importable. The alleged description of the goods as parts and accessories instead of computer monitors was held to be a technical, non-revenue-neutral error, not a substantive misdeclaration. On that basis, confiscation, redemption fine and penalties were set aside, with consequential relief to the importer.

---

---

Issues: (i) whether import of reconditioned computer monitors by a Special Economic Zone unit was hit by the restrictions in the Foreign Trade Policy, and (ii) whether the declaration of the goods as parts and accessories instead of computer monitors justified confiscation, redemption fine and penalty.

Issue (i): Whether import of reconditioned computer monitors by a Special Economic Zone unit was hit by the restrictions in the Foreign Trade Policy.

Analysis: The unit was operating under a letter of permission issued by the Development Commissioner for manufacture and reconditioning of electronic items. Paragraph 2.17 of the Foreign Trade Policy restricted second-hand goods but permitted imports in accordance with the relevant policy provisions and permissions. The goods were also covered by the DGFT policy circular classifying reconditioned computer monitors under Heading 8471 60, under which such goods were freely importable.

Conclusion: The import was not in violation of the policy and did not warrant confiscation on the ground of restriction.

Issue (ii): Whether the declaration of the goods as parts and accessories instead of computer monitors justified confiscation, redemption fine and penalty.

Analysis: The declaration error did not confer any advantage on the importer and had no revenue implication. The description error was treated as a technical and procedural lapse rather than a substantive misdeclaration warranting penal consequences.

Conclusion: Confiscation of the goods and truck, redemption fine and penalties were not justified.

Final Conclusion: The appeals succeeded and the confiscation and penalties were set aside with consequential relief.

Ratio Decidendi: Where imports are made under valid permission and the alleged declaration defect is merely technical without revenue consequence, confiscation and penalty are not warranted.

---