ORDER
Gowri Shankar, Member (T)
1. The question for consideration in this appeal is whether the ISO containers imported by the appellant are capital goods as defined in the Import and Export Policy 1992-97 and therefore could be imported without an import licence. In the order impugned in this appeal, the Collector (Appeals) has confirmed the finding of the Deputy Collector that the goods are not capital goods and therefore liable to be confiscated under Clause (d) of Section 111 of the Act but reduced the redemption fine from Rs. 2.40 lacs to Rs. 1.20 lacs.
2. Representative of the appellant contends that the containers were imported in order for the appellant to fabricate an ice making plant which was required to be supplied for use in a hydro-electric project. He says that the term “capital goods” as defined in the policy includes accessories and the containers are accessories of the ice plant, as they improve its efficiency.
3. I do not find it possible to accept this contention entirely. The import policy for the relevant period defines capital goods as meaning, inter alia, accessories required for production. An accessory is in turn defined as a part, sub-assembly, or assembly that contributes to the efficiency or effectiveness of a piece of equipment without changing its basic function. Two containers were imported by the appellant, one of which has been found by the Deputy Collector to have been specially designed for the project and to house the ice maker mounted on structural plat form. If that is the position, and this is not challenged, it would follow that container was to form an essential part of the ice maker and hence would be a component as part of it. The ice maker could not exist without it. Therefore, this container did not contribute to the effectiveness of the ice making plant, but form part of it. It would follow that one of these two containers, the one specially designed to hold the plant could not be considered as accessory and hence could not be capital goods.
4. The position would be different with regard to other container. The purchase order placed upon the appellant by its corroborator M/s. Technical Services Company was for supply of one container of ice plant with 20 metric tonne storage. I therefore accept the contention of the representative of the appellant that this second container for shortage of the ice produced by the ice plant and that it was therefore an accessory. This container provides additional storage facility and therefore satisfies the definition of the term “accessory” which improves the efficiency of the ice plant without affecting the basic function. It has therefore to be considered as capital goods.
5. Hence the facility provided under the public notice dated 10-6-1994 of the Ministry of Commerce for import of second hand capital goods subject to the fulfilment of conditions in paragraph 25 of the policy would be available to this container.
6. Accordingly, the redemption fine is reduced from Rs. 1,20,000/- to Rs. 60,000/-.
7. Appeal allowed in part.