TMI Blog2010 (2) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... ith further penalty in the sum of ₹ 1,15,000/- on the present petitioners and ₹ 1,15,000/- on M/s Fedders Lloyd Corporation Ltd., New Delhi in terms of section 112(a) of the Customs Act. THE FACTS 2 The factual matrix reveals that the petitioners sought to import the consignment of Compressors for Air Conditioners for the value of ₹ 6,69,505.50 against Bill of Entry No.2523/1236 (M-V Maerkicle-mentine) against six Import Licences bearing different dates endorsed in terms of para 51(iii) of the Import Export Policy 1985-88 permitting importation of Non-OGL Capital Goods to eligible actual users (industrial) in terms of para 263(A) of AM 85-88. The petitioners sold these goods on High Seas to M/s Fedders Lloyd C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the compressors were capital goods and that the petitioners were entitled to import the same against the license held by them. 5 The aforesaid submission did not find favour with the adjudicating authority. The Adjudicating Authority after hearing the parties found that the imports made by the petitioners were not in accordance with the import and export policy. The findings recorded in this behalf read as under: I have gone through the records of the above case and have carefully considered the submissions made by the importer and the High Sea Buyers. No doubt, the item is specific in the License List, but license also mentions In terms of para 51(iii) of AM 85-88 Para 51(iii) stipulates the policy for import of NON-OGL Capital goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by sub para (ii). The impugned goods, therefore, are not covered by licences submitted by importer and are liable for confiscation under section 111(d) of the Customs Act 1962 read with section 3(2) of the Import and Export Act, 1947. M/s Fedders Lloyds and M/s Kamal Traders, have knowingly imported and attempted to clear the compressors as capital goods knowing fully well that they are going to use them as components, they are liable to penal action under sec.112(a) of Customs Act, 1962. Since Kamal Traders purchased the goods even before the order for the goods was placed they have aided and abetted in the un-authorised import. 6 Not satisfied with the aforesaid adjudication order the present petition was preferred by the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l goods under the very same licences as such impugned action of the customs authorities is arbitrary and discriminative. 9 Per contra, Mr. Jetley learned Counsel appearing for the revenue urged that it is not in dispute that the compressors imported against the said license were to be used in manufacture of air conditioners which were to be sold in the open market. Since the compressors in question were to be used as components for manufacture of air conditioners by M/s Fedders Lloyed Corporation Pvt. Ltd, a registered manufacturer, the compressors imported against subject license could not be considered as capital goods. 10 In the submission of Mr. Jetly, capital goods means any plant, machinery, equipment or accessories required for ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use in manufacturing, mining, agriculture, aquaculture, animal, husbandry, floriculture, horticulture, pisciculture, poultry, sericulture and viticulture as well as for use in the services sector. Having seen the definition of capital goods, the said definition of capital goods is very wide. The capital goods can be machines, machinery, plant equipment, apparatus, tools or appliances. Any of these goods, if used for producing or processing of any goods or for bringing about any change in any substance OR for the manufacture of final produce would be capital goods. It is, therefore, clear that the user will determine whether the item imported would fall within the swipe of capital goods. 12 In the case in hand the goods namely compres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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