Custom, Excise & Service Tax Tribunal
P S Bedi And Co Pvt Ltd vs Chennai(Air Port & Cargo) on 2 February, 2024
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE
TRIBUNAL,
SOUTH ZONAL BENCH, CHENNAI
COURT HALL No.III
CUSTOMS APPEAL No.41743 OF 2013
(Arising out of Order-in-Appeal C.Cus.No.678/2013 dated 30.04.2013 passed by
Commissioner of Customs (Appeals), 60, Rajaji Salai, Custom House,
Chennai 600 001)
M/s.PS Bedi & Co Pvt. Ltd. ....Appellant
D-10, South Extension, Part II
New Delhi 110 049.
Versus
The Commissioner of Customs, ...Respondent
Airport and Air Cargo,
Meenambakkam,
Chennai 600 027.
APPEARANCE :
Ms. G. Varshitha, Advocate
For the Appellant
Mr. Harendra Singh Pal, Assistant Commissioner (A.R)
For the Respondent
CORAM :
HON'BLE Ms. SULEKHA BEEVI. C.S., MEMBER (JUDICIAL)
HON'BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL)
DATE OF HEARING : 02.02.2024
DATE OF DECISION : 02.02.2024
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Customs Appeal No.41743 of 2013
FINAL ORDER No.40124/2024
ORDER :Per Ms. SULEKHA BEEVI. C.S Brief facts are that the appellant imported used and new hand tools of 324 pieces under Bill of Entry dt. 18.9.2012. The Department was of the view that the tools which were imported does not fall under the definition of "Capital Goods" as per para-9.12 of Foreign Trade Policy. The appellant did not have licence to import such goods and therefore the goods were held to be liable for confiscation. The original authority after due process of law passed the order directing for confiscation of goods with an option to redeem the goods on payment of redemption fine. Penalty was also imposed. Against such order, the appellant preferred appeal before the Commissioner (Appeals) who upheld the same. Hence this appeal.
2. Ld. Counsel Ms. G. Varshitha appeared and argued for the appellant. It is submitted by the Ld. counsel that the goods are used goods which are intended for re-export. Appellant has also re-exported the same. The Department has ordered for confiscation of the goods observing that as per the definition of "Capital Goods" under para 9.12 of FTP, the hand tools do not fall within the definition and therefore are not freely importable. The Ld. Counsel submitted that such hand tools would fall under the category of equipments, accessories, apparatus etc. which are included in the definition of "capital goods" as per para 9.12 of FTP. 3
Customs Appeal No.41743 of 2013 The Ld. Counsel also adverted to the definition of "Capital Goods"
under para 5.2 of the EPCG Scheme to argue that as per the scheme the definition does not specify 'machine tool' or 'hand tool'.
All tools are included within the scheme.
3. The decision rendered by the Tribunal in the case of Asia Power Projects Ltd. Vs CC Chennai - 2019 (370) ELT 477 (Tri.-Chennai) was relied by the Ld. Counsel to submit that on identical facts, the Tribunal observed that the goods in the nature of hand tools would fall under the category of equipments, instruments for testing, apparatus, accessories which are included in the definition of "Capital Goods" as per para 9.12 of FTP. So also, it was noted that as per the EPCG scheme, at para 5.2, the definition of 'capital goods' does not differentiate between machine tools or hand tools. The confiscation of goods was held to be not legal and proper. Ld. Counsel prayed that the appeal may be allowed.
4. Ld. A.R Sri Harendra Singh Pal appeared and argued for the department. The findings in the impugned order was reiterated.
5. Heard both sides.
6. The issue to be decided is whether the order of confiscation of the imported goods viz. used hand tools, is legal and proper. The issue has been considered by the Tribunal in the case of Asia Power Projects Ltd. (supra) wherein on identical set of facts the Tribunal observed that as per para 9.12 of FTP, any goods which fall under the category of equipments, apparatus etc. are freely 4 Customs Appeal No.41743 of 2013 importable irrespective of their size and nature. So also, as per the EPCG scheme, there is no difference as to whether tools are machine tools or hand tools. The relevant paragraph of the said decision reads as under :
"5.1 True, the definition of "capital goods" as found in para 9.12 of the FTP does not specifically mention "hand tools" . It is also true that details that have found mention are "machine tools". However, what is important to be adjudged is whether "hand tools" will fall within the scope of machinery, equipment or accessories required for manufacture or production either directly or indirectly of goods or for rendering services. The definition in para 9.12 of the FTP indicates only gives examples of capital goods which can be directly or indirectly used. It certainly does not disbar any equipment based on the size. The definition also includes a wide range of equipments like refractories, catalysts, instruments for testing, research and development, quality and pollution control and so on. Hence the relevant aspect whether the equipments concerned will be used directly or indirectly in the manufacture or production of goods or for rendering services, irrespective of the size of such equipment. It is not the case of the department that in hand tools have no such use.
5.2 In any case, within the same FTP in Chapter 5 relating to import of goods under Export Promotion Capital Goods (EPCG) Scheme "all tools and not just machine tools" have been included within the scope of capital goods in para 5.2 . So also, in para 6.5.1 in the list of capital goods permitted to be imported / procured from DTA "tools"
have been specifically indicated, without restricting its scope only to "machine tools".
... .... .....
5.4 In view of the discussions, conclusions herein above, and also relying upon the case laws cited supra, we are of the considered opinion that it is the functionality and utility of the equipments which would qualify for inclusion as 'capital goods' for the purpose of para 9.12 of the FTP, or otherwise. Nothing has been brought on record to prove that "hand tools" are not equipment and are not required for manufacture or production either directly or indirectly of goods or for rendering services. This being so, the impugned hand tools will very much come within the scope of "hand tools" for the purpose of para 9.12 of the policy and will then not become restricted for import in terms of para 2.17 of the FTP . Impugned order to the contrary cannot then sustain and is therefore set aside."
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Customs Appeal No.41743 of 2013
7. After appreciating the facts, evidence placed before us and following the decision as above, we are of considered view that the order directing for confiscation of the goods and imposition of redemption fine and penalties cannot sustain. In the result, the impugned order is set aside. Appeal is allowed with consequential relief, if any.
(Dictated and pronounced in court)
sd/- sd/-
(VASA SESHAGIRI RAO) (SULEKHA BEEVI.C.S)
Member (Technical) Member (Judicial)
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