2014 (11) TMI 300 - AT - Customs

Tribunal overturns penalties for importing pipes as capital goods

The Tribunal set aside the confiscation of goods, Redemption Fine, and penalty imposed on the appellant for importing old and used pipes classified under ... Confiscation of goods - Imposition of redemption fine - import of old and used pipes - Held that:- the appellant has imported Propping pipes and classified the same under CTH 7308 4000. The CTH 7308 40 deals with equipment for scaffolding, shuttering, propping or pit-propping. - Therefore, same are held as capital goods - impugned goods are freely importable as per para 2.17 of the Foreign trade Policy. Therefore, as no licence is required for importation of the said goods, the confiscation of the impugned goods was not warranted. Accordingly, confiscation is set aside. - Following decision of Cinda Engineering & Constructions P. Ltd. [2013 (11) TMI 947 - CESTAT BANGALORE] - Decided in favour of assessee. Issues:Appeal against order for confiscation of goods, imposition of Redemption Fine and penalty.Analysis:The appellant imported old and used pipes classified under CTH 7308 4000, held not covered as capital goods initially. Appellant challenged the imposition of Redemption Fine and penalty. Counsel argued goods classified as equipment under CTH 7308 4000, freely importable under FTP. Cited precedent Cinda Engineering & Constructions P. Ltd. 2012 (289) ELT 509 (Tri-Bang) to support the contention.The department opposed, stating CTH 7308 deals with structures, not capital goods. Confiscation and penalties justified due to lack of necessary license. Tribunal observed CTH 7308 40 pertains to equipment for scaffolding, propping, or pit-propping. Defined 'capital goods' in FTP includes equipment for rendering services. Referenced Cinda Engineering & Constructions case where scaffoldings were considered equipment. Tribunal concluded propping pipes imported for construction service qualify as capital goods, freely importable under FTP.Confiscation set aside as propping pipes deemed capital goods, no license required for importation. Consequently, Redemption Fine and penalty overturned. Appeal allowed with consequential relief.