Capital goods exemption for plant imports upheld where goods were not treated as mere spares or parts.

Imported machinery and related goods were treated as capital goods, not merely spares and parts, because they fell within the broad Foreign Trade Policy and notification definition and were brought for plant setup under a single contract. The 10% restriction was held applicable only to components, spares and parts of capital goods imported earlier, not to the goods in question. The Chartered Engineer's certificate supported their use and installation, and the earlier decision relied on was considered factually applicable. On that basis, the import qualified for exemption under Notification No. 104/2009-Cus, and the duty demand, confiscation proposal and penalty proposal were not sustainable.

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Issues: Whether the imported goods were capital goods or only spares and parts, and whether the respondent was entitled to the benefit of Notification No. 104/2009-Cus dated 14-09-2009, as amended.

Analysis: The imported goods were held to fall within the wide definition of capital goods under the Foreign Trade Policy and the notification. The restriction of 10% applied only to components, spares and parts of capital goods imported earlier, whereas the goods in question were treated as capital goods or accessories imported for setting up the plant under a single contract. The Chartered Engineer's certificate was accepted as supporting the use and installation of the imported goods, and the earlier decision relied on by the respondent was found applicable on the facts.

Conclusion: The import was held eligible for the exemption under the notification, and the duty demand, confiscation proposal and penalty proposal were not sustainable.

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