Per P.C. Jain :

The respondents herein filed a Bill of Entry for clearance of goods declared as "Inverter with battery charger with battery and power cables" and sought clearance under OGL para 5.6 Import-Export Policy 1997-2002.

2. As per ITC (HS) classification of Export & Import Item 1997-2002 electric inverter is classifiable under ITC Heading 8504.4001 as a restricted item which can be imported only against a licence or a Public Notice issued in this regard.

3. The respondents herein vide their letter dated 8.3.98 stated that vide Customs Public Notice No. 25/96-Cus. dated 24.4.96 an UPS system has been defined including various components. They further stated that since the goods imported by them included all those components, it should be classified as an UPS system which is required under OGL under the Policy. The adjudicating authority did not agree with this submission of the respondents herein. It held that an inverter and UPS are two different items. He, therefore, confiscated the goods with an option to the respondents to redeem the goods on payment of fine of Rs. 75,000/-. He also imposed a penalty of Rs. 10,000/-.

3.1. On appeal before the lower appellate authority