Restricted import rules for second-hand yacht upheld, but redemption fine and penalty reduced on parity with precedent.

A second-hand yacht imported for personal use was treated as a restricted second-hand good under the Foreign Trade Policy because it was not second-hand capital goods. Import without the required authorisation rendered it liable to confiscation, and the chapter note on import of ships, vessels and boats without licence did not assist because the yacht was neither new nor imported for breaking. On parity with comparable yacht-import precedent, the redemption fine and penalty were found excessive and reduced.

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Issues: (i) whether the imported second hand yacht for personal use was a restricted item requiring authorisation and was liable to confiscation in the absence of such authorisation; (ii) whether the redemption fine and penalty required reduction.

Issue (i): whether the imported second hand yacht for personal use was a restricted item requiring authorisation and was liable to confiscation in the absence of such authorisation.

Analysis: Para 2.17 of the Foreign Trade Policy 2009-14 treats all second hand goods, other than second hand capital goods, as restricted for import, while second hand capital goods are freely importable. The yacht was found to be a second hand good imported for personal use and not a second hand capital good. The reliance on the chapter notes permitting import of ships, vessels and boats without licence did not assist the importer, as the item was neither new nor imported for breaking.

Conclusion: The yacht was rightly held liable for confiscation for import without the required authorisation.

Issue (ii): whether the redemption fine and penalty required reduction.

Analysis: The facts were treated as identical to the earlier yacht import matter relied upon by the Tribunal and the High Court. In that comparable matter, a lower redemption fine and penalty had been sustained on a higher declared value. Applying the same approach, the quantum imposed in the present case was found excessive.

Conclusion: The redemption fine and penalty were reduced.

Final Conclusion: The confiscation and the finding of restricted import were maintained, but the monetary burden was substantially reduced, resulting in a partial allowance of the appeal.

Ratio Decidendi: A second hand yacht imported for personal use falls within the restricted category of second hand goods under the Foreign Trade Policy unless it qualifies as second hand capital goods, and import without the required authorisation renders it liable to confiscation; the quantum of redemption fine and penalty may be reduced on parity with comparable precedents.

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