Ramesh Nair DECISION
Ramesh Nair, Member (J)
1. The appellant herein namely Ratnamani Metals and Tubes Limited preferred the present appeal against Order-In-Appeal No. MUN-CUSTM-000-APP-176-21-22 dated 03.11.2021 of the Commissioner of Customs (Appeals), Ahmedabad by which he has upheld the Order-In-Original dated 11.08.2020 holding that the second hand furniture/equipment do not qualify as capital goods and hence the import of such goods was restricted in terms of Sr. II of para. 2.31 of the Foreign Trade Policy 2015 - 2020 and that in absence of import authorization having been produced, the said goods are liable to confiscation under Section 111(d) of the Customs Act 1962 and consequently he proceeded to impose redemption fine of Rs. 5,00,000 in lieu of confiscation under section 125 of the Customs Act, 1962 and a further penalty of Rs. 4,00,000/- under Section 112(a) of the Customs Act 1962.
2. Briefly, the facts of the case are that the appellant herein purchased a "Complete Used Stainless Steel Tube Manufacturing Plant" including parts, spares, accessories, tools & tackles and office related furniture/equipment, at a total purchase price of 31,00,000 Euros from SN Aussenhandel E.K. Germany in terms of purchase agreement dated 14.10.2019 and sought clearance of the said goods vide Bill of Entry No. 2351802 dated 02.08.2020. The proper officer of customs, in respect of all other parts of second-hand tube manufacturing plant, permitted clearance. However, in respect of office furniture/equipment he denied clearance on the premise that the said item cannot be construed as "capital goods" and accordingly the same falls under Sr. II of para. 2.31 of Foreign Trade Policy - 2015-2020 whereunder the second-hand goods that are not capital goods are restricted and is importable only against authorization. The appellant by its reply dated 10.08.2020 waived show cause notice and submitted that the office furniture/equipment being part of complete stainless steel tube manufacturing plant and that in view of inclusive definition of capital goods the said goods are required to be construed as "capital goods". However, the Additional Commissioner of Customs, Mundra vide his Order dated 11.08.2020 ordered confiscation of the said goods under Section 111(d) of the Act and gave an option to redeem the goods on payment of fine of Rs. 5,00,000.00 and further imposed penalty of Rs. 4,00,00.00 on the appellant holding that the second hand office furniture/equipment are not "capital goods" as the same are not required for manufacture or production either directly or indirectly, therefore not covered under definition of capital goods. The said order has been upheld by Commissioner of Customs (Appeals) by Order dated 3.11.2021 against which the present appeal is preferred by the appellant.
3. Shri Rahul Gajera, Learned Counsel appearing for the appellant submitted that the impugned order is not tenable; that the authorities below erred in not appreciating that when the office furniture/equipment are part of the compete plant and its use in relation to the manufacturing activity is not disputed, it follows that the said goods qualify as "capital goods" in terms of para 2.31 Sr. I (c) and accordingly are freely importable. He submitted that the definition of "capital goods" is provided under para. 9.8 of the Foreign Trade Policy and the same is wide and inclusive; that term "plant" would include "whatever apparatus is used by a businessman for carrying out his business' and hence the office furniture/equipment which are undisputedly used in relation to the manufacturing plant answers "user test" and accordingly qualify as "capital goods". In this behalf he placed reliance upon the following decisions of Tribunal:-
(i) Warburg Pincus India P. Limited vs. Commr. Of Cus. (Imports), Mumbai -