Case Law Details
PS Bedi & Co Pvt. Ltd. Vs Commissioner of Customs (CESTAT Chennai)
Introduction: In the case of PS Bedi & Co Pvt. Ltd. vs. Commissioner of Customs, the dispute revolves around the classification of imported hand tools. The Customs Department confiscated the goods, alleging they didn’t qualify as capital goods under Foreign Trade Policy (FTP). However, the appellant contested this decision, arguing that hand tools fall under the category of equipment and apparatus. This article delves into the details of the case and the tribunal’s ruling.
Detailed Analysis: PS Bedi & Co Pvt. Ltd. imported used and new hand tools, intending them for re-export. However, the Customs Department confiscated the goods, citing non-compliance with FTP regulations regarding capital goods. The appellant argued that hand tools should be considered capital goods under FTP para 9.12, as they fall under the category of equipment and apparatus.
The tribunal referred to the case of Asia Power Projects Ltd. vs. CC Chennai, where a similar issue was addressed. The tribunal in that case observed that hand tools should be treated as capital goods under FTP, as they contribute directly or indirectly to manufacturing, production, or service rendering. Additionally, the EPCG scheme includes all tools within the scope of capital goods, without distinction between machine tools and hand tools.
Examining the definition of capital goods under FTP and EPCG, the tribunal concluded that hand tools qualify as equipment necessary for manufacturing or production. As such, they are not restricted for import under FTP regulations. Therefore, the tribunal set aside the confiscation order and associated penalties.
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