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TMI Blog2017 (12) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... l with the appeals. 2. After examining the records and hearing both sides, we find that the short question arising for considering in these appeals is whether the second-hand photocopying machines imported by the assessee were capital goods or not. The lower appellate authority has held the said machines to be capital goods and, accordingly, it has refrained from confiscating the goods or imposing penalty on the importer. The Revenue is aggrieved by the decision of the Commissioner (Appeals). Ld.counsel has submitted that the question whether the second-hand photocopiers could be treated as "capital goods" or "consumer goods" has already been settled by the Tribunal in the case of Atul Commodities (P) Ltd. Vs Commissioner, 2005 (184) ELT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayer sought for, learned counsel for the respondent relied on the decision of the Hon'ble Supreme Court in Atul Commodities Pvt. Ltd. vs. Commissioner of Customs, Cochin reported in 2009 (235) E.L.T. 385 (S.C.), wherein it was held as follows: "18. We have referred to the provisions of the 1992 Act and Para 2.3 of the FTP to demonstrate the difference between amendment and clarification. The power to amend the FTP is exclusively vested in the Central Government whereas the power to clarify is vested in DGFT. On 31.8.2004, the Central Government vide Notification No. 1/2004-09 notified the FTP 2004-09. The Policy was announced on 31.8.2004. The Policy came into force from 1.9.2004. That Policy came to be amended vide Notification No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegory of "free" to the category of "restricted" imports. This aspect is important for two reasons. Firstly, notification no. 31 dated 19.10.2005, quoted hereinabove, is an amendment to the Policy. It operates only from 19.10.2005. It recites that second-hand capital goods are importable freely. The Notification states that after 19.10.2005, however, import of second-hand photocopying machines will be allowed only against a licence. This amendment pre-supposes that photocopying machines are kept out of the purview of "second hand capital goods" only after 19.10.2005. Secondly, as stated above, broadly imports fall in two categories - general and restricted categories including prohibited category. When there is change of categorization, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... answered vide Policy circular No. 16 dated 29.9.2003 in the manner indicated above. Accordingly, by Policy circular No. 16/03, it was clarified that second-hand PCs/Laptops would not fall under "second hand capital goods" as defined under Para 2.33 of the Handbook and consequently their import could only be against a licence. In continuation of Policy circular no. 16/03, circular no. 19/03 came to be issued by which photocopying machines were sought to be brought in the connotation of "second hand goods" in contradistinction to "second hand capital goods". However, both these Policy circular nos. 16/03 and 19/03 pertain to period prior to January, 2005 when appellant imported photocopying machines. Both the said circulars referred to FTP ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fall in the restricted category (see Policy circular No. 19/03). Para 1 of Policy circular no. 20/05 recites that photocopying machines are not to be imported without a licence even if they are less than 10 years old and even if the photocopying machines are imported for service providers. Vide para 3, the Policy circular no. 20/05 clarifies that second- hand photocopying machines are covered under the definition of "second- hand goods", therefore, their import shall be governed by the provisions of para 2.17 of the Policy and shall not be permitted to be imported under para 5.1 of the Policy. Reverting to para 2.17 of FTP (2004-09) read with para 2.33 of the Handbook (2004-09) one finds that import of second-hand capital goods is made "fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. One more aspect needs to be mentioned. Para 2.33 expressly states that import of old and used computers/second-hand computers are restricted. Para 2.33 of the Handbook do not restrict photocopying machines. Import of photocopying machines are expressly restricted only by Notification no. 31 dated 19.10.2005. This itself indicates that categorization/re-categorization cannot be done by policy circulars. Such exercise has to be undertaken by specific amendment to the Policy vide Section 5 of the 1992 Act. In this case, Notification no. 31 dated 19.10.2005 indicates that the Central Government has brought in photocopying machines into the category of second-hand goods vide amendatory Notification, therefore, import of photocopying machines ..... X X X X Extracts X X X X X X X X Extracts X X X X
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