Free import of old and used capital goods for off-shore pipeline work defeats confiscation, fine and penalty.

Old and used buoyancy tanks, wire ropes, shackles, chain blocks and hydraulic pumps imported for off-shore pipeline laying were treated as capital goods used for rendering services. On that basis, para 2.17 of the Foreign Trade Policy 2004-09 permitted their free import without a specific licence. The import was therefore not in breach of the policy, and confiscation was not justified. As the goods were freely importable as old and used capital goods, redemption fine and penalty were not imposable.

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Issues: Whether old and used buoyancy tanks, wire ropes, shackles, chain blocks and hydraulic pumps imported for laying off-shore pipeline were capital goods freely importable under para 2.17 of the Foreign Trade Policy 2004-09, and whether confiscation, redemption fine and penalty were sustainable.

Analysis: The imported goods were used in laying off-shore pipeline projects and were therefore treated as capital goods used for rendering services. Under para 2.17 of the Foreign Trade Policy 2004-09, old and used capital goods could be imported freely without a specific licence. On that footing, the import did not violate the policy and the goods were not liable to confiscation.

Conclusion: The import licence was not required, confiscation was not justified, and redemption fine and penalty were not imposable.

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