Import classification by suitability for use controls where goods are capable of use and binding DGFT interpretation applies.

Blank video cassettes were treated as freely importable because the relevant entry used "suitable" to mean capable of being used, and the goods were capable of use in S-VHS type VCRs. The classification therefore fell under Exim Code 852390 03.20 rather than 852390 03.90, which required a specific import licence. The DGFT's interpretation of ITC (HS) classification was binding on Customs under the Exim Policy, so Customs could not ignore it. As a result, confiscation, redemption fine, and penalty were not sustainable, and consequential relief followed.

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Issues: Whether the imported blank video cassettes were correctly classifiable under Exim Code No. 852390 03.20 as freely importable, or under Exim Code No. 852390 03.90 requiring a specific import licence.

Analysis: The relevant entry used the expression "suitable", which was construed to mean "capable of being used". Since the imported cassettes were capable of use in S-VHS type VCRs, they fell within the scope of Exim Code No. 852390 03.20. The ruling of the DGFT on interpretation and classification under the ITC (HS) classifications was binding under para 4.13 of Chapter 4 of the Exim Policy 1997-2000, and the Customs authorities could not disregard it.

Conclusion: The goods were correctly classifiable under Exim Code No. 852390 03.20 and were freely importable. The confiscation, redemption fine, and penalty could not be sustained.

Final Conclusion: The appeal succeeded and the impugned order was set aside with consequential relief.

Ratio Decidendi: Where a tariff or import-policy entry turns on suitability for use, the expression covers goods capable of such use, and a binding DGFT interpretation on classification under the import policy must be followed by Customs authorities.

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