Free import of refurbished capital goods spares depends on Chartered Engineer certification and environmental clearance, not restrictive classification.

Refurbished or re-conditioned spares of capital goods are treated as freely importable under the Foreign Trade Policy 2009-2014 when the prescribed conditions are met, including a Chartered Engineer certificate confirming at least 80% residual life of the original spare. On the hazardous waste issue, the goods could not be treated as restricted where the relevant environmental clarification and permission were already on record. In that setting, confiscation and penalty based on a contrary classification were unsustainable, and the impugned order was set aside.

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Issues: (i) Whether refurbished or re-conditioned spares of capital goods were freely importable under the Foreign Trade Policy 2009-2014 when supported by the prescribed Chartered Engineer certificate; (ii) Whether the import could be treated as restricted or liable to confiscation for want of additional permission under the hazardous waste framework.

Issue (i): Whether refurbished or re-conditioned spares of capital goods were freely importable under the Foreign Trade Policy 2009-2014 when supported by the prescribed Chartered Engineer certificate.

Analysis: Para 2.17 of the Foreign Trade Policy 2009-2014 distinguishes restricted second-hand capital goods from free-category refurbished or re-conditioned spares of capital goods. The latter are permitted subject to the conditions in para 2.33 of the Handbook of Procedures Volume 1, including a Chartered Engineer certificate showing at least 80% residual life of the original spare. The certificate was available on record and the prescribed condition stood satisfied.

Conclusion: The refurbished or re-conditioned spares were freely importable and not hit by the restricted category.

Issue (ii): Whether the import could be treated as restricted or liable to confiscation for want of additional permission under the hazardous waste framework.

Analysis: Circular No. 27/2011-Cus dated 04.07.2011 clarified the treatment of the relevant items under Schedule 3 of the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008, and permission from the Ministry of Environment and Forests had already been granted. In these circumstances, the reasoning adopted by the lower authorities to treat the goods as restricted could not be sustained, and the confiscation and penalty based on that premise could not survive.

Conclusion: The import was not liable to be treated as restricted on the hazardous waste ground, and the confiscation and penalty were unsustainable.

Final Conclusion: The impugned order was set aside and the appeals were allowed with consequential relief.

Ratio Decidendi: Refurbished or re-conditioned spares of capital goods are freely importable when the policy conditions, including the prescribed Chartered Engineer certification of residual life, are satisfied, and the import cannot be confiscated as restricted on a contrary interpretation once the relevant environmental permission and policy clarification are on record.

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