Import exemption and confiscation principles applied where technical lapses could not defeat substantive eligibility or licence coverage.

CEGAT held that imported medical equipment was not liable to confiscation where a Chartered Engineer's certificate showed substantial residual life and the age restriction was aimed at preventing import of useless old machinery. Accessories and spares integral to the main equipment were also not separately confiscable absent proof that they were distinct prohibited imports or outside the licence coverage. The benefit of Notification No. 138/88-Cus. could not be denied for lack of a notarised foreign affidavit because that requirement was procedural, not substantive. Household articles were not liable to confiscation for non-declaration, but Transfer of Residence relief was denied because the time and shipment conditions were not satisfied.

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Issues: (i) Whether the medical equipment was hit by the age restriction in the import policy and liable to confiscation for misdeclaration and import prohibition. (ii) Whether the accessories and spares were separately liable to confiscation for want of specific licence coverage. (iii) Whether the benefit of Notification No. 138/88-Cus. could be denied for absence of a notarised affidavit abroad. (iv) Whether the household articles were liable for confiscation for non-declaration and whether Transfer of Residence benefits were available.

Issue (i): Whether the medical equipment was hit by the age restriction in the import policy and liable to confiscation for misdeclaration and import prohibition.

Analysis: The equipment was supported by a Chartered Engineer's certificate indicating substantial residual life, and the licensing authority had also issued clarification supporting clearance. The age restriction in paragraph 34(3) was treated as aimed at preventing import of useless old machinery, not equipment with adequate residual life. On that material, the alleged violation of the import policy and the foundation for confiscation were not sustained.

Conclusion: The confiscation and misdeclaration finding relating to the main medical equipment were set aside, in favour of the assessee.

Issue (ii): Whether the accessories and spares were separately liable to confiscation for want of specific licence coverage.

Analysis: The accessories and spares were found to be integral parts of the main equipment, supported by the supplier's invoice and clarificatory material. The licensing authority had treated the imported equipment as covered by the licence, and no contrary evidence established that the items could function independently or were outside the permitted import. The separate confiscation on this basis was therefore unsustainable.

Conclusion: The confiscation of the accessories and spares was set aside, in favour of the assessee.

Issue (iii): Whether the benefit of Notification No. 138/88-Cus. could be denied for absence of a notarised affidavit abroad.

Analysis: The requirement of a notarised affidavit was treated as procedural rather than substantive. The record contained other materials showing residence abroad, and the underlying eligibility condition for the notification was not shown to be violated. Procedural non-compliance of a technical nature was held not sufficient to deny the substantive benefit.

Conclusion: Denial of the notification benefit was set aside, in favour of the assessee.

Issue (iv): Whether the household articles were liable for confiscation for non-declaration and whether Transfer of Residence benefits were available.

Analysis: Household goods imported under baggage rules were held not to require a bill of entry under the relevant chapter, and oral declaration was accepted as sufficient for that purpose. The confiscation for non-declaration was therefore not sustained. However, the Transfer of Residence concession was denied because the time and shipment conditions were not satisfied on the facts found.

Conclusion: The confiscation of household articles was set aside, but the denial of Transfer of Residence benefits was upheld, partly in favour of the assessee and partly in favour of the revenue.

Final Conclusion: The appeal succeeded on the confiscation and notification issues concerning the medical equipment, accessories, and household goods, but failed on the claim for Transfer of Residence relief for the household articles.

Ratio Decidendi: A procedural or technical lapse cannot defeat a substantive import exemption or notification benefit where the substantive eligibility is established, and integral accessories forming part of the imported equipment cannot be separately confiscated absent proof that they are distinct prohibited imports.

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