COMMISSIONER OF CUSTOMS (IMPORT) Vs. WARTSILA INDIA LTD

JUDGEMENT

(1.) This appeal at the instance of the Revenue is directed against the order dated 3rd August, 2005 passed by the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench, Mumbai ("CESTAT" for short) holding that the second-hand reconditioned Wartsila Vasa Basic Engine would qualify as a "capital goods" for the purpose of para 9.12 of Foreign Trade Policy 2004-2009 and can be imported without a licence as per para 2.17 of Foreign Trade Policy 2004-2009 though it becomes operational only after it is attached or fitted/coupled with equally important machine namely an alternator.

(2.) The said appeal was admitted by this Court vide order dated 8th June, on 2006 to consider following substantial question of law:

(3.) The facts giving rise to the present appeal are that the respondent filed bill of entry on import of reconditioned "Wartsila Vasa Basic Engine". The respondent claimed that it was a complete fuel fired engine by itself, hence a complete machine in itself and that, it was not a spare part of a bigger machine. The respondent claimed that it could run a whole factory by being attached to a proper transmission attachment to the clutch and gear box. It can run a whole rolling unit. That is how the respondent claimed that engine was an independent machine complete by itself. It could be put into direct use depending upon its use. As such, the engine could not have been classified as a spare part.