Secondhand scaffoldings treated as freely importable capital goods; confiscation and penalties under customs law were set aside.

Old and used scaffoldings classified under SH 7308 40 00 were treated as equipment for scaffoldings, and the accepted tariff classification supported that characterisation. On that basis, the goods fell within the Foreign Trade Policy treatment of equipment used for rendering services as capital goods, making such secondhand capital goods freely importable. The customs licensing restriction therefore did not apply, and the confiscation and penalties imposed under the Customs Act were held unsustainable and set aside.

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Issues: Whether old and used scaffoldings imported under the accepted tariff classification were to be treated as equipment and, consequently, as secondhand capital goods freely importable under the Foreign Trade Policy, so as to negate confiscation and penalty under the Customs Act.

Analysis: The imported goods were old and used scaffoldings. Their classification under SH 7308 40 00 of the First Schedule to the Customs Tariff Act, 1975 had been accepted for assessment and duty had been paid on that basis. The description against that tariff entry referred to equipment for scaffoldings, which supported the conclusion that the goods were equipment. Paragraph 9.12 of the Foreign Trade Policy 2009-14 treated equipment used for rendering services as capital goods, and paragraph 2.17 made such goods freely importable. On that footing, the imported scaffoldings were secondhand capital goods and did not attract the licensing restriction invoked by the customs authorities.

Conclusion: The confiscation and penalties were unsustainable and were set aside.

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