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M/s. Studio 24 Frames Versus CC, CE&ST, Hyderabad-II

2016 (6) TMI 908 - CESTAT HYDERABAD

Restriction on Import of second hand goods - import of second hand video cameras - confiscation - Foreign Trade Policy - FTP para 2.17 that it deals generally with second hand goods. Para 2.17 has two parts viz. second hand capital goods group and all other second hand goods. In the free category, the second sub-clause deals with all other second hand capital goods - According to the appellant, the imported goods would fall within the definition of capital goods. Para 2.33 of the HBP Vol.I lays .....

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venue generation. The authorities below have reached the conclusion that the activities proposed to be carried out by the appellant with these goods (cameras) are not covered within the scope of the definition of services as mentioned in para 9.52 of FTP. That therefore they would not fall into the category of capital goods. - It is to be noted that the second para of the definition of capital goods say that it includes goods used for service sector. The description of goods as per Bill of E .....

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ted:- 19-2-2016 - MS. SULEKHA BEEVI, C.S., MEMBER(JUDICIAL) Shri P. Dwarakanath, Consultant for the appellant. Shri R. Sekhar, Authorised representative for the respondent. ORDER PER: SULEKHA BEEVI, C.S. The appellants had imported two cameras labeled as Red-one 7529 Mysterium (year of manufacture 2008) and Red-one 5596 (Mfr. Year 2007) vide Bill of Entry No.76282811 dated 16/08/2012. As the original invoice from the manufacturer of goods was not submitted by the appellant, a Chartered Engineer .....

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0/09/2012 confiscated the two numbers of digital still image video cameras giving an option to the appellant to redeem the same on payment of fine of ₹ 1,10,000/-. A penalty of ₹ 50,000/- was also imposed under Section 112(a) of Customs Act, 1962. The appellants carried the issue in appeal and vide the order impugned herein, the Commissioner(Appeals) upheld the confiscation but reduced redemption fine to ₹ 1,00,000/- and the penalty was reduced to ₹ 35,000/-. The appellan .....

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tal goods. The second part deals with import policy and conditions of import of all other second hand goods. Para 2.17 of the FTP draws a dichotomy between the second hand goods and second hand capital goods. Second hand capital goods, again have two categories viz. restricted category and free category. In the free category, the import of all second hand capital goods other than refurbished/reconditioned spares of capital goods are freely importable. Para 9.12 gives the definition of capital go .....

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ld not fall under the category of second hand capital goods. These goods would fall under the category of other second hand goods as provided in para 2.17 of the FTP. That the import of second hand goods is restricted and therefore the goods were rightly confiscated by the authorities below. He submitted that the appellant has failed to establish that the goods imported would fall under the definition of capital goods as provided in para 9.12 of FTP. He argued that para 2.33 is not applicable in .....

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Conditions, if any I. Second Hand Capital Goods Group (a) Restricted category (i) Personal computers / laptops (ii) Photocopier machines / Digital multifunction print & copying machines. (iii) Air conditioners (iv) Diesel generating sets Restricted Allowed to be imported only as per provisions of FTP, ITC(HS), HBP v1, Public Notice or an Authorisation issued for import of the specified second hand item. (b) Free category (i) Refurbished / reconditioned spares of capital goods Free Subject t .....

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able. The definition of capital goods is given in para 9.12 of the FTP which is as under:- 9.12. "Capital Goods" means any plant, machinery, equipment or accessories required for manufacture or production, either directly or indirectly, of goods or for rendering services, including those required for replacement, modernisation, technological upgradation or expansion. It also includes packaging machinery and equipment, refractories for initial lining, refrigeration equipment, power gene .....

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ays down that import of second hand capital goods including refurbished / reconditioned spares except those of personal computers / laptops shall be allowed freely. As per para 2.33 except for personal computers and laptops, there is no restriction for import of second hand capital goods. 7. The Hon ble High Court of Madras in the case of Commissioner of Customs, Tuticorin Vs. City Equipment and others [2013-TIOL-359-HC-MAD-CUS] while considering the import of second hand photocopiers imported f .....

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. Except for those specifically mentioned restricted category of second hand capital goods which are not allowed free import, all other second hand capital goods including other enumerated restricted category of second hand capital goods are permitted free import. Thus, with no distinction maintained between other restricted category of second hand capital goods and second hand capital free goods, we do not find any good ground to read in Clause 2.33, a restriction on the free import of second h .....

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ts, like other goods falling under free category, are permitted to be imported freely. .. … …. ….. 8. The contention raised by the appellant that the goods are second hand capital goods is not accepted by the department. According to the department, the definition of services given in para 9.52 of FTP states that services include all tradable services covered under General Agreement on Trade and Services (GATS) and earning free foreign exchange. That the activities proposed .....

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