Per V.K. Agrawal :

The issue involved in the appeal filed by M/s. Modi GBC Ltd. is whether the Shredder Machines imported by them are restricted goods being consumer goods as decided by the Department or were office equipments used for shredding paper.

2. Briefly stated the facts are that the Appellants imported shredder machines in 1994, the clearance of which was sought under para 22 of the Export Import Policy 1992-97, according to which reimport licence was required for importation of the goods imported did not figure in the negative list. However, the Additional Commissioner, Customs, in order in original dated 24.3.95, confiscated the shredder machines with an option to the appellants to redeem the same on payment of fine of Rs. 50,000/- and imposed a penalty of Rs. 25,000/-, holding that the operating manual indicated shredders in question as 'personal shredders' for shredding the documents; that though the shredders could be used in offices, it did not mean that these are not consumer goods; that as per ITC provisions, fax machines and Photocopier, which are office equipments, were specifically referred as consumer goods/consumer durables under the exclusion clause of the negative list under para 156 (A) of the EXIM Policy; that similarly currency counting machines and industrial Kitchen Machines were mentioned as consumer goods under Appendix XXXV of the Hand Book of Procedure 1992-97 and permissible against special licences; that personal shredder is an item of similar groups and accordingly a consumer goods for the import of which specific import licence was required. The Commissioner (Appeals) confirmed the order of the adjudicating authority after seeing the shredder at the time of hearing and observing that impugned shredders are not designed for industrial use and are covered by the expression, 'consumer goods' in the policy; that the shredders, described in the operating manual, are designed for use by individual executives; that such use could be anywhere in an office or at home and use of the shredder in the office cannot take them out of the definition of consumer goods.

3. Shri A.R. Madhav Rao, Ld. Advocate, mentioned that according to para 7 (12) of the Policy consumer goods means "Any consumer goods which can directly satisfy human needs without further processing and include consumer durables and accessories thereof." He submitted that the impugned shredders are meant only for shredding papers/documents; that this type of machines find use only in big commercial offices and also in factories where packing materials in the form of cut pieces of papers are required; that as such shredders in question cannot be considered to be a machine satisfying the human needs directly; that these machines rather satisfy the commercial needs in an office; that according to Explanatory Notes of H.S.N., shredders are classifiable as office machines, falling under Heading 84.72. He further submitted that the Collector (Appeals) has laid stress on the terminology personal shredders used in the catalogue; that the catalogue does not mention at any place that the shredders can be used at home; that the word "personal" has been indicated to show that these types of shredders are kept by senior executives in their room for getting the papers destroyed through persons; that it does not mean that the shredders are used domestically also; that human needs are entirely different from office needs or commercial needs. The Ld. Advocate further mentioned that simply because some items are listed in Appendix 35 which are permitted to be imported against special import licence, that does not mean that all those items come within the scope of "consumer goods"/consumer durables; that to clarify the position only in the policy as amended on 1.4.95, a specific note has been inserted in para 156 that all items including consumer goods which are importable against freely transferable special import licence can be imported only against such