Second-hand capital goods importability upheld for manufacturing fixtures and rollers despite no refurbishment certificate

Used projection fixtures and used pinned rollers were treated as second-hand capital goods because their functional role was in manufacturing, testing and training, not as restricted parts or spares. On that basis, they were held freely importable under paragraph 2.17 of the Foreign Trade Policy, 2004-2009, and no licence was required. The absence of refurbishment or reconditioning did not make the imports impermissible, and the objection based on the need for a Chartered Engineer certificate was not accepted on the material before the tribunal. The importer's position was upheld and the Revenue's challenge failed.

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Issues: (i) Whether the imported used projection fixture and used pinned rollers were second-hand capital goods freely importable under paragraph 2.17 of the Foreign Trade Policy, 2004-2009, or restricted second-hand parts/spares requiring a licence; (ii) whether the absence of refurbishment or reconditioning and the alleged need for a Chartered Engineer certificate barred free import.

Issue (i): Whether the imported used projection fixture and used pinned rollers were second-hand capital goods freely importable under paragraph 2.17 of the Foreign Trade Policy, 2004-2009, or restricted second-hand parts/spares requiring a licence.

Analysis: The imported items were examined in the context of their functional use in the manufacturing process. The projection fixture was used for fitting and testing pins on rollers in the course of manufacture, and the used pinned rollers were stated to be samples and prototypes used for training and manufacture of new rollers. On that basis, and reading the imports with the definition and scheme of capital goods, the items were treated as second-hand capital goods rather than restricted second-hand parts.

Conclusion: The items in question were held to be freely importable second-hand capital goods, not restricted parts requiring a licence.

Issue (ii): Whether the absence of refurbishment or reconditioning and the alleged need for a Chartered Engineer certificate barred free import.

Analysis: Paragraph 2.17 permits import of second-hand capital goods and also refers to refurbished or reconditioned spares, but the Court treated that reference as not excluding the present imports. The argument that the goods were merely parts and therefore needed refurbishment or a certificate was not accepted, and the Chartered Engineer certificate objection was also not accepted in light of the material on record.

Conclusion: The absence of refurbishment or reconditioning did not render the imports impermissible, and the certificate objection failed.

Final Conclusion: The Revenue failed to establish any ground to disturb the order allowing the imports, and the impugned order in favour of the importer was sustained.

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