Ad hoc exemption for used clinical equipment defeats redemption fine and penalty on import

Imported used clinical equipment treated as capital goods and intended for charitable use was later covered by an ad hoc Government exemption. In view of that subsequent exemption being available on record, the basis for confiscatory consequences no longer survived. Redemption fine and penalty were therefore not warranted and were set aside.

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Issues: Whether the redemption fine and penalty imposed on import of used clinical equipment were sustainable after the Government subsequently granted ad hoc exemption.

Analysis: The imported goods were used clinical equipments, treated as capital goods under the Exim Policy, and had been gifted for charitable use. At the time the appellate authority decided the matter, the ad hoc exemption sought by the importer was still pending. The exemption was later granted by the Government of India and was available on record. In view of the subsequent exemption, the basis for sustaining confiscatory consequences and penalty no longer survived.

Conclusion: The redemption fine and penalty were not warranted and were rightly set aside.

Ratio Decidendi: Where imported second-hand capital goods are ultimately covered by an ad hoc exemption granted by the Government, imposition of redemption fine and penalty is not justified.

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