Permissible spares imported with capital goods were held unrestricted, and confiscation and redemption fine were unsustainable.

Permissible spares imported by an actual user along with capital goods were treated as outside the 5% value restriction under Appendix 10, because Item 54 did not impose any such ceiling and the earlier connected precedent was followed. The fact that the spares were imported together with the main machinery did not deprive the importer of the benefit of unrestricted import of permissible spares. On that basis, confiscation and redemption fine were unsustainable and consequential relief followed.

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Issues: Whether permissible spares imported by an actual user along with capital goods were subject to a 5% value restriction under Appendix 10 of the relevant Import Policy, and whether excess-value import of such spares justified confiscation and redemption fine.

Analysis: The spares imported were held to be permissible spares and not covered by Appendices 3 and 5. Item 54 of Appendix 10 did not impose any value restriction on such spares, and the earlier decision in the connected precedent was applied. The mere fact that the spares were imported along with the main machinery did not deprive the importer of the benefit of the unrestricted import of permissible spares.

Conclusion: The 5% value restriction was inapplicable, and the orders of confiscation and redemption fine were unsustainable; the appeal succeeded.

Final Conclusion: The import of permissible spares by the actual user was held to be allowable without the asserted value ceiling, and the impugned confiscation and fine were set aside with consequential relief.

Ratio Decidendi: Where the import policy permits spares without a value cap, an actual user cannot be denied that benefit merely because the spares were imported together with capital goods.

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