2013 (11) TMI 947 - AT - Customs

Tribunal classifies scaffoldings as 'secondhand capital goods' under Foreign Trade Policy

The Tribunal ruled in favor of the appellant, holding that the imported scaffoldings were correctly classified as 'secondhand capital goods' under the ... Confiscation of goods - Import of old and used scaffoldings - Held that:- These goods were classified by the importer under SH 7308 40 00 of the CTA Schedule and this classification was accepted by the assessing authority for levy of duty. That duty was paid by the importer also. The assessment was final. In this scenario, the description of goods given against the tariff entry is significant and the same reads “equipments for scaffoldings…”. Once the declared classification has been accepted, there can be no dispute whether the scaffolding could be considered as equipments. old and used scaffoldings imported by the appellant are to be considered as “secondhand capital goods”. It is nobody’s case that secondhand capital goods were not freely importable during the material period. They were freely importable without any license whatsoever. If that be so, the appellant’s action did not attract Section 111(d) of the Customs Act and, for that matter, Section 112 of the Act - confiscation ordered by the Commissioner and the penalties imposed by him are set aside - Decided in favour of assessee. Issues:1. Classification of imported goods as 'used scaffoldings' under Customs Tariff Act, 1975.2. Claim of goods being freely importable without specific license.3. Confiscation of goods under Section 111(d) of the Customs Act.4. Penalty imposed on the importer.5. Interpretation of the term 'capital goods' under Foreign Trade Policy.6. Dispute over whether scaffoldings can be considered as 'equipments' under the definition of capital goods.7. Validity of Commissioner's decision in confiscating the goods.Analysis:1. The appellant imported goods declared as 'used scaffoldings' classified under SH 7308 40 00 of the Customs Tariff Act. The goods were examined, identified as old and used scaffoldings, and valued based on various factors.2. The appellant claimed the goods to be freely importable without a specific license, citing them as 'used capital goods' under para 2.17 of the Foreign Trade Policy. The customs authorities, however, raised a case against the importer from a licensing perspective.3. The Commissioner of Customs confiscated the goods under Section 111(d) of the Customs Act, with an option for redemption against payment of fines. The penalty imposed on the party amounted to Rs. 5 lakhs.4. The appellant argued that the scaffoldings fell within the definition of 'capital goods' under the Foreign Trade Policy and should be considered freely importable. The appellant's classification of goods was accepted by the assessing authority for duty levy.5. The Commissioner's decision was challenged, with the appellant contending that the scaffoldings were indeed 'equipments' for scaffolding, falling under the definition of capital goods. The appellant's submission was based on the accepted classification of goods and the definition of capital goods in the Foreign Trade Policy.6. The Tribunal found that the scaffoldings imported by the appellant were old and used, classifiable as 'secondhand capital goods.' As per the Foreign Trade Policy, secondhand capital goods were freely importable without a license. Therefore, the confiscation and penalties were set aside.7. The Tribunal concluded that the appellant's action did not violate the Customs Act, as the imported scaffoldings were considered freely importable secondhand capital goods. The confiscation and penalties imposed by the Commissioner were overturned, and the appeals were allowed.