Import classification and transitional FTP protection defeated confiscation where goods were assessed as presented.

Imported shafts were required to be assessed in the form in which they were presented, and the Tribunal found that the lower authorities had not properly examined whether they were parts of centrifugal pumps rather than restricted transmission shafts. It also applied the Foreign Trade Policy transitional protection for imports shipped within the original validity of an irrevocable commercial letter of credit established before a later restriction. On that basis, the classification adopted by customs, the import restriction, and the resulting confiscation and penalty were held unsustainable.

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Issues: Whether the imported shafts were correctly classified as transmission shafts attracting restriction and confiscation, and whether the import was protected by the transitional provision in paragraph 1.5 of the Foreign Trade Policy because shipment was made within the validity of an irrevocable commercial letter of credit established before the restriction.

Analysis: The appeal concerned import of shafts which the customs authorities treated as restricted transmission shafts and confiscated under the Customs Act, 1962 with penalty. The Tribunal applied the settled principle that goods are to be assessed in the form in which they are presented, unless the contrary is established. It found that the invoice showed import of four varieties of shafts claimed to be parts of centrifugal pumps, and that the lower appellate authority had not properly considered whether the goods were in fact parts of pumps or whether the policy restriction could override the appellant's pre-existing letter of credit. Paragraph 1.5 of the Foreign Trade Policy permits import notwithstanding a subsequent restriction where shipment is made within the original validity of an irrevocable commercial letter of credit established before the date of imposition of the restriction.

Conclusion: The Tribunal held that the classification and the application of the import restriction were unsustainable, and the confiscation and penalty order could not stand.

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