Accessory and capital goods treatment of crane spare parts under Foreign Trade Policy upheld; confiscation and penalty could not stand.

Imported second-hand ballast wagon spare parts fitted to a crane were treated as an accessory or attachment because they enhanced the crane's capacity and effectiveness without altering its basic function. On that basis, the item also qualified as capital goods under the Foreign Trade Policy 2004-09, as equipment or accessories used for service rendering and for modernisation or technological upgradation. The import was therefore considered permissible under the policy, and the confiscation and penalty order was unsustainable.

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Issues: Whether the imported second-hand ballast wagon spare part, when fitted with the crane, qualified as an accessory or attachment and capital goods under the Foreign Trade Policy 2004-09, so as to permit import without the restriction applied by Revenue.

Analysis: The imported item was found to enhance the capacity of the existing crane and to improve its effectiveness without changing its basic function. On that basis, it answered the policy definition of an accessory or attachment and also fell within capital goods as equipment or accessories required for rendering services, including for modernisation or technological upgradation. The Tribunal therefore accepted that the import was covered by the relevant policy provisions.

Conclusion: The import was held to be permissible under the Foreign Trade Policy 2004-09 and the confiscation and penalty order was unsustainable.

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