Capital goods under REP licence: computers used for production-related pattern marking fell within policy flexibility and were importable.

Imported computers and peripherals used for pattern marking and grading of garment designs were treated as capital goods because they were deployed in production-related work, even though they could also serve other purposes. The REP licence permitted import of admissible items within its flexibility portion, subject to the 1988-91 Import Policy conditions, and the specific flexibility for such imports was not displaced by the general restrictions in Appendix 2B. The later 1990-1993 Policy was not relevant because the licence was issued under and governed by the 1988-91 Policy. On that basis, import of the computers under the REP licence was permissible.

---

---

Issues: Whether the imported computer and peripherals, intended for use in marking and grading garment patterns, were capital goods and could be imported under the flexibility available under the REP licence and the relevant Import Policy provisions.

Analysis: The goods were found to answer the description of capital goods because they were to be used by the importer for production-related work, namely pattern marking and grading, with the aid of the imported software. The fact that the computer could also be used for other purposes did not take it outside the category of capital goods for the importer's use. The licence expressly allowed import of admissible items within the flexibility portion subject to the conditions in paragraphs 177 and 177A of the 1988-91 Policy. The policy also showed that computers and computer-based systems were separately dealt with, and the restrictions in Appendix 2B did not override the specific flexibility permitted under the licence. Recourse to the later 1990-1993 Policy was not warranted because the licence was issued under, and expressly governed by, the 1988-91 Policy.

Conclusion: The import of the computers under the REP licence was permissible and the denial of the benefit of the licence was unsustainable.

---