Canalised import classification and consumer goods scope upheld for motor vehicle lubricating oil; penalty reduced

Lubricating oil imported in consumer packs was treated as falling within the residuary canalised category under the Import and Export Policy 1992-97, so import under OGL failed. The same goods were also held to be consumer goods because they functioned as end-use consumables for motor vehicles, and the definition was not confined to edible items or to SKD/CKD goods. The redemption fine was found proportionate and sustained, while the penalty was considered deserving of relief and was reduced, leaving the challenge successful only to that limited extent.

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Issues: (i) Whether lubricating oil imported in consumer packs was a canalised item under para 157 of the Import and Export Policy 1992-97 and was therefore not importable under OGL. (ii) Whether the goods fell within the definition of consumer goods under para 156 of the Import and Export Policy 1992-97. (iii) Whether the redemption fine and penalty required interference.

Issue (i): Whether lubricating oil imported in consumer packs was a canalised item under para 157 of the Import and Export Policy 1992-97 and was therefore not importable under OGL.

Analysis: The goods were imported as lubricating oil for motor vehicles. Para 157 contained canalised categories, including a residuary category covering other oils not specifically mentioned elsewhere. The imported item was held to fall within this residuary coverage, and the clarification relied upon by the appellants was not sufficient to displace the canalisation under the policy.

Conclusion: The goods were held to be a canalised item and the plea for OGL import failed.

Issue (ii): Whether the goods fell within the definition of consumer goods under para 156 of the Import and Export Policy 1992-97.

Analysis: Para 156 covered all consumer goods, and the definition of consumer goods extended to goods that directly satisfy human needs without further processing, including consumer durables and accessories, components, parts and spares. Lubricating oil used in motor vehicles was treated as a consumable product for end use and was not confined to articles capable of ingestion or to SKD or CKD goods.

Conclusion: The goods were held to be consumer goods and the challenge on that ground failed.

Issue (iii): Whether the redemption fine and penalty required interference.

Analysis: The redemption fine was found not to be excessive in relation to the value of the goods. However, the circumstances justified some relief in respect of penalty.

Conclusion: The redemption fine was sustained, while the penalty was reduced to Rs. 25,000.

Final Conclusion: The confiscation and redemption fine were maintained, but the penalty was reduced, leaving the appeal successful only to that limited extent.

Ratio Decidendi: Goods falling within the residuary canalised category of the import policy remain canalised, and a product used as an end-use consumable may qualify as consumer goods notwithstanding that it is neither edible nor in SKD or CKD condition.

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