2017 (4) TMI 420 - AT - Customs

Import of Old Furniture by Service Providers Deemed Capital Goods: Tribunal Decision

M/s Warburg Pincus India Pvt. Ltd. Versus Commissioner of Customs (Imports), Mumbai

The Tribunal allowed the appeal in favor of the appellant, ruling that the import of old furniture by a service provider falls within the definition of ... Prohibited goods - import of old and used furniture, not more than 10 years old - confiscation on the ground that import of the goods more than 10 years old was not permitted - the appellants are service provider - Held that: - The term plant would include whatever apparatus is used by a businessman for carrying out his business. The appellants are in business of providing service on financial market like identical in security and funds. In terms of the definition of capital goods provided in the EXIM Policy, it can be seen that the capital goods include any plant required for rendering services - In the instant case, the nature of services provided by the appellant is such that even furniture would fall under the category of capital goods used for providing services. In these circumstances, the defence of the appellant that import policy allows import of second hand capital goods has merit - appeal allowed - decided in favor of appellant. Issues: Import of old furniture, interpretation of Import Policy, definition of capital goods for service providers.Analysis:1. Import of Old Furniture: The appellant imported furniture that was found to be old and used, less than 10 years old, leading to a show-cause notice under Section 111(d) of the Customs Act, 1962 as import of goods over 10 years old was prohibited. The appellant argued that the Import Policy allows import of second-hand capital goods under Chapter 94, covering OGL goods like office furniture. The original adjudicating authority ruled in favor of the appellant, considering the goods as capital goods. However, the Commissioner (Appeals) set aside this decision, leading to the appeal before the Tribunal.2. Interpretation of Import Policy: The appellant contended that as a service provider, the definition of capital goods includes furniture as per the EXIM Policy. The definition of capital goods in the policy encompasses machinery, equipment, or accessories required for manufacturing goods or rendering services, including furniture. The appellant relied on previous Tribunal decisions like Jawahar Mills Ltd. and BE-Office Automation Pvt. Ltd. to support their argument. The Revenue relied on the impugned order, contesting the appellant's interpretation.3. Definition of Capital Goods for Service Providers: The Tribunal analyzed the definition of capital goods in the EXIM Policy and the interpretation provided in previous cases. The Tribunal referred to the case of Jawahar Mills Ltd. and highlighted that the term 'plant' includes any apparatus used in a businessman's trade. Considering the nature of services provided by the appellant in the financial market, the Tribunal concluded that even furniture could be considered capital goods for service providers. The Tribunal found merit in the appellant's argument that the import policy allows for the import of second-hand capital goods. Consequently, the appeal was allowed in favor of the appellant.This detailed analysis of the judgment showcases the interpretation of the Import Policy, the definition of capital goods for service providers, and the Tribunal's decision in the case of importing old furniture, providing a comprehensive understanding of the legal aspects involved.