By TIOL News Service

MUMBAI, APRIL 24, 2017: THE appellant had imported furniture which was found to be old and used.

The customs authorities issued a SCN seeking to confiscate the said goods u/s 111(d) of the Customs Act, 1962 on the ground that import of goods more than 10 years old was not permitted.

In reply to the SCN, the appellant submitted –

(i) The Import Policy allows import of Second Hand capital Goods including spares, freely and includes computers etc. The relevant Chapter is 94 which covers OGL goods i.e. office furniture, metal and wooden.

(ii) Para 2.45 of the Policy clearly allows import of Overseas Office Equipment and states that used office equipment and other items could be imported without a Licence/Permission.

(iii) Para 9.10 of the Policy - reproduces the definition of capital goods which is and inclusive definition and includes any plant, machinery, equipment or accessories required for manufacture of production either directly or indirectly of goods or for rendering services and capital goods also include packaging machinery, machine tools equipment and instruments.

Agreeing with the submission made, the original adjudicating concluded that the impugned goods being capital goods could be freely imported.

Revenue was aggrieved with the dropping of the proceedings and hence appealed to the Commissioner(A) who set aside the o-in-o.

Therefore, the importer is before the CESTAT.

The appellant argued that they are service providers and the definition of capital goods would include furniture also. They emphasise on the term "plant" in the definition of capital goods as appearing in the EXIM policy. Reliance is also placed on the decisions in Jawahar Mills Ltd. – 2002-TIOL-33-CESTAT-DEL, affirmed by Apex Court 2002-TIOL-87-SC-CX; BE-Office Automation Pvt. Ltd. & Anr. – 2004-TIOL-682-CESTAT-DEL.

The Bench adverted to paragraph 32 of the decision of the Tribunal in the case of Jawahar Mills Ltd. (supra) and after reproducing the same observed thus –

"4.1 The term plant would include ‘whatever apparatus is used by a businessman for carrying out his business'. The appellants are in business of providing service on financial market like identical in security and funds. In terms of the definition of capital goods provided in the EXIM Policy, which I reproduced in para 2 above, it can be seen that the capital goods include ‘any plant required for rendering services'. In the instant case, the nature of services provided by the appellant is such that even furniture would fall under the category of capital goods used for providing services…."

Concluding that the defence of the appellant that import policy allows import of second hand capital goods has merit, the appeal was allowed.

(See 2017-TIOL-1359-CESTAT-MUM)