TMI Blog2021 (3) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... een filed post 01.04.2020. Even if certain bills of entry have been filed prior to notification, the law prevailing on the date of examination for considering the release of goods would have to be made applicable and if so, the notification S.O.1236(E) dated 01.04.2020 needs to be applied. In the light of the above reasoning, we are of the considered view that the stand taken by the Department was fully justified. On perusal of the application filed by the respondent/writ petitioner dated 09.06.2020, it is found that the application is not a simple application for provisional release but in fact it covers most of the grounds which have been raised in the writ petition. It is rather surprising that an application for provisional release would contain such details without even the Department calling upon the respondent importer to furnish details or to give explanation. The orders of provisional release passed pursuant to the directions issued by the Writ Court being interlocutory in nature cannot be considered as a precedent - Merely by stating that identical imports were allowed to be provisionally cleared can be no reason to permit the respondent to clear the goods by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als. With the consent on either side, W.A.No.642 of 2021 is taken as the lead case which has been filed challenging the order in W.P.No.8574 of 2020 filed by M/s.Best Mega International, New Delhi. 3.We have elaborately heard Ms.Aiswarya Bhati, learned Additional Solicitor General assisted by Ms.R.Hemalatha, learned Senior Standing Counsel for the appellant/revenue and Mr.Arvind Datar and Mr.A.R.L.Sundaresan, learned Senior Counsels appearing for Mr.N.Viswanathan and Mr.S.Baskaran, learned counsels appearing for the writ petitioner and Mr.V.Chandrasekaran, learned Standing Counsel for the Director General of Foreign Trade [DGFT] who have also filed an independent appeal which is yet to be numbered. 4.We note the facts in W.P.No.8574 of 2020 to understand the background under which the respondent importer had approached the Writ Court. The respondent importer is a partnership firm engaged in the business of import and trading of Second hand Digital Multifunction Printing and Copying Machines, Medical Equipments, etc. and during the course of business had imported a consignment of 136 units of old and used digital multifunction from the overseas supplier at Singapore. The bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.2019 and notification dated 01.04.2020 whereas the Ministry of Commerce and other Ministries have classified the product under the nomenclature as imported multifunction print and copying machines. Thus, it is the argument of the writ petitioner that the machines which have been imported by them are freely importable and since the Department has refused to release the goods, the petitioner has approached this Court by way of filing the writ petitions. 6.The Customs Department had filed a counter affidavit in the writ petition raising preliminary objections. Firstly, the Customs Department are implementing authorities who are bound to act only in accordance with the directions/policy decisions of the nodal authorities as constituted for the same and the import of second hand MFDs are regulated under various statutory provisions and has to be allowed clearance subject to fulfilment of each and every condition stipulated independently. The conditions being hereunder. i.Compliance of procedures and production of mandatory documents specified in the provisions of Hazardous and other Wastes (Management Transboundary Movement) Rules, 2016 read with E- Waste Management Rules, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f BIS registration for the imported/used MFDs. 8.The other objection raised was that these statutory authorities which are nodal authorities which have laid down the condition have not been impleaded in the writ petition and the writ petition was filed only again the implementing agency and therefore, liable to be dismissed. The various orders passed by this Court and the other High Courts on which the respondent/writ petitioner had placed reliance have been dealt with and in paragraph 22 of the counter affidavit, the following tabular column has been incorporated which is quoted herein below: Sl.No. Date Particulars Remarks 1. 06.04.2018 W.P.No.2728 of 2018 High Court of Andhra Pradesh The High Court directed release of the goods which was challenged by MeitY before the Hon'ble Apex Court in Special Leave to Appeal (c) No.17307/2019 and Record of Proceedings dated 24.07.2020 evident of the same. [Kindly refer to Page No.27 of Respondents typed set] 2. 24.01.2019 Atul A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eking to DECLARE Para 2.31 of the FTP issued by DGFT as ultravires along with Interim prayer for provisional release of the MFDs pending final adjudication. The division bench granted INTERIM DIRECTION for the release of the MFDs upon the payment of duty on the enhanced value as determined by the Chartered Engineer. The main writ petition challenging the vires of Para 2.31 of the FTP is still pending. 7. 27.09.2019 W.M.P.No.24857 of 2019 in W.P.No.25286 of 2019 by the Division Bench of this Hon'ble High Court. This Hon'ble Court took note of the final order passed by a coordinate Division Bench in Serial No.3 above and also the Interim Order granted by another coordinate Division Bench in Serial No.6 above but inter alia was not inclined to grant provisional release and instead ordered notice in the main Writ Petition. The Division Bench was further pleased to grant Liberty to the petitioner therein to submit a representation seeking relief in terms of the amendment to the policy dated 07.05.2019. 8. 17.12.2019 W.P.No.5372 of 2019 and etc cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made mandatory for these category of goods. Further, with regard to the decisions relied on by the respondent/writ petitioner, it is submitted that they are not applicable to the cases on hand as there was a challenge when the goods were classified as restricted category and not prohibited category and that appears to be the reason for issuing direction for release of the goods in the earlier decision. With the above averments, the Director General of Foreign Trade prayed for dismissal of the writ petition. 10.Mr.V.Chandrasekaran, learned Standing Counsel appearing for DGFT submitted that the Department has filed a separate writ appeal but the same is yet to be numbered and there may be a slight delay in filing the appeal because necessary instructions had to be obtained from New Delhi. In any event, the decision rendered in these writ appeals will equally apply to the appeal filed by the DGFT. 11.The learned Writ Court while allowing the writ petition by the impugned order has chronicled the relevant events in paragraph 2 of the order. In paragraph 2(vii), the learned Writ Court has stated that the import being the subject matter of adjudication before the revenue autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly, writ petitions were allowed with the aforementioned directions. 14.The four broad propositions which have been framed by the learned Additional Solicitor General are that (1) decisions granting provisional release may not be treated as a precedent, (2) there are three statutory requirements which are to be taken note of, namely, the CRO 2012, the Foreign Trade Policy and the Hazardous Waste Management Rules, (3) the writ petition is not maintainable as there is no vested right for provisional release, there is an efficacious statutory mechanism prescribed under Section 110A and 130 of the Act, that there has been no fact finding by the competent authority under Section 110A, that the customs authorities being only the implementing authority, the writ petition ought to have been dismissed on the ground of non-impleadment of MeitY, the respondent/writ petitioner having not challenged any of the statutory requirements, provisional release cannot be ordered and (4) the change in the legal position after the notification dated 07.05.2019 under the Foreign Trade Policy and the notification dated 01.04.2020 in the CRO are very relevant which would dis-entitle the respondent/writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered as restricted item. In this regard, the learned senior counsel painstakingly took us through various entries as well as the amendments which were brought to the circular by adding several items to the original list of fifteen items. Further, it is submitted that by circular No.1/2019, the Department wanted to expand and clarify what is a printer by stating that the MFD is also a printer, however, by way of circular, the earlier notification cannot be superseded. By notification dated 01.04.2020 while adding certain other items to the original list, further clarification was issued and such clarification can at best be prospective. These three limbs of arguments made by the learned senior counsel are without prejudice to each other. Elaborate reference was made to the entries in the Customs Tariff Act, HSN classification, etc. which we had pointed out is beyond the realm of writ proceedings and it was never pressed into service when the writ petitions were heard. In any event, these classification issues cannot be dealt with by us. Once we have expressed our opinion on this issue, the learned senior counsel proceeded to canvass other points. With regard to the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to draw such a distinction and treat all types of wrongful imports on an equal footing might result in miscarriage of justice and that is perhaps, why Section 110A has been worded in the way it has, leaving some margin to the Customs in the exercise of their discretion subject, of course, to the recognized legal limits. The above decisions were relied on in the case of Additional Director General [Adjudication] vs. Its my Name Private Limited [MANU/DE/1823/2020] . 20.In the case of Malabar Diamond Gallery Pvt. Ltd. vs. The Additional Director General, Directorate of Revenue Intelligence and others [2016 (241) ELT 65 (Madras)] , the Division Bench of this Court pointed out that one of the important aspects to be taken note by the authorities while exercising their powers under Section 110A of the Act is whether, import of goods is prohibited, within the meaning of Section 2(33) of the Customs Act and where, in the Customs Act or any other law for the time being in force, such prohibition is mentioned. Therefore, we need to examine as to whether such goods are restricted or prohibited items. 21.The Ministry of Communication and Information Technology by notification S.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24.By notification S.O.2905(E) dated 07.11.2014, the Government included another fifteen products in addition to the fifteen products which were mentioned in the notification dated 07.09.2012. The MeitY issued office memorandum dated 10.03.2017. The necessity for such office memorandum was on account of investigation into large scale import of used MFD in violation of Environment Protection Act and Rules and Foreign Trade Policy. The memorandum mentions about how traders from various parts of India especially Delhi and Kolkata are regularly importing large quantifies of MFDs through Cochin Port and none of the importers produce any documents to Customs Department to prove compliance of the Registration Order, 2012. Further, it was mentioned that printers are covered under Electronics and IT Goods (Requirements for Compulsory Registration) Order, 2012 mandating Indian safety standards for the notified goods and must be registered with BIS before sale in India. It is further stated that since second hand Multifunction printers are registered with BIS nor they have sought permission from MeitY for their import, such imports would be in violation of Compulsory Registration Order, 2012. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issued dated 10.03.2017 made this position clear. The argument of the respondent is that the schedule in the control order cannot be modified by way of office memorandum/circular. The MeitY had issued circular dated 02.05.2019. A reading of the said circular shows that it is a clarification issued with regard to MFDs. A clarification is to be understood as a clarification of an existing position and not a new inclusion. This being the settled interpretation, the respondent/writ petitioner cannot contend that MFDs cannot be included under the category of Printers by way of a clarification. The position appears to be that the Department has always classified MFDs under the category of Printers and the position stood clarified thereafter and the need for such clarification arose on account of unethical imports which was taken note of by MeitY while issuing office memorandum dated 10.03.2017. It has clearly stated that the traders of various parts of India, especially Delhi and Kolkata, are regularly importing large quantities of used MFDs through Cochin Port and none of them have produced any documents before the Customs Department to prove compliance of the Registration Order, 2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Department was fully justified. 33.It was argued by the learned senior counsels for the respondents that invariably the Department does not take a decision on the request for provisional release and to demonstrate the same, the details of certain other writ petitions which were filed even earlier by other importers was placed before this Court for consideration. One startling feature which struck our eye on perusal of the details is that there has been import of substantial quantity/number of these type of machines and invariably in all cases writ petitions have been filed before this Court without exhausting the remedy of provisional release under the Act or without undergoing the process of adjudication. By way of illustration, if we take up the case of the respondent, M/s.Best Mega International, the petitioner in W.P.No.8574 of 2020, we find that the application for provisional release was filed on 09.06.2020 and the writ petition was filed on 18.06.2020. Thus, it is clear that no reasonable time was granted to the Department to examine the application. On perusal of the application filed by the respondent/writ petitioner dated 09.06.2020, we find that the applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... needs to be adjudicated, then we may have to do the role of an Officer of Customs or an Officer who deals with classification of the products for the purpose of levying and collecting customs duty which we are not required or expected to do. As mentioned above, the circulars being clarifications would date back to the date of notification originally issued and the argument that it will be prospective, i.e. post 01.04.2020 is rejected. 36.The learned Additional Solicitor General is also right in her submissions in contending that MeitY is proper and necessary party to the writ petition as the Customs Department is only an implementing authority who obviously cannot supersede or over reach the notification issued by the MeitY exercising power under the provisions of the Bureau of Indian Standards Rules and the CRO. 37.The learned Writ Court in paragraph 7 of the impugned order has pointed out that there are conflicting decisions of the two Division Benches. As already mentioned, there can be no two similar orders in respect of directions for provisional release unless and until the Department concedes that the goods are identical and the same relief needs to be granted and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court by way of an appeal under Section 130 of the Customs Act in C.M.A.No.4719 of 2018 in the case of M/s.Unitech Enterprises vs. CESTAT by judgment dated 17.02.2021, we dismissed the appeal with the following reasoning: 18.The appellant had imported 36 units of Old/Used Analogue Photocopiers without obtaining a license. Having accepted the stand taken by the Department, the appellant requested that his case may be adjudicated. Therefore, the dispute was only with regard to 201 units of Old/Used Digital Multi functional (Print and Copying) Machines. The import was effected by filing of Bill of Entry dated 13.08.2009. The Department was of the prima facie view that the item imported is a restricted item in terms of para 2.17 of the FTP which allows import of second hand capital goods including refurbished/reconditioned spares without obtaining a license. There are two limbs to para 2.17 of the FTP and for easy reference, we quote the same hereunder: Para 2.17 of the Foreign Trade Policy All second hand goods, except second hand capital goods, shall be restricted for imports and may be imported only in accordance with provisions of FTP, ITC(HS), HBP vl. Public No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The image is directly projected on to the photoreceptor 2. The optical image is converted to digital data which is sent to the printer engine to create the printed image on to the photoreceptor 3. The image is developed on the photoreceptor and copied on the paper. 3. The image is developed on the photoreceptor and copied on the paper. 20.From the above, it is seen that except for additional feature in column No.2, there is no other distinction between a digital photocopier and a analog photocopier. This factual position is not being seriously contested by the appellant but the appellant would seek to bring their goods under the category 'freely importable' because they are capital goods. This contention was rejected by the Tribunal after taking note of the functionality of the machine which was imported and after taking note of the various Customs Tariff Headings and pointed out that photocopying machines are classified under various Tariff Headings such as 8443 3920, 8443 3930, 8443 3940, 8443 3950. Thus, it was pointed out that photocopying machines do not have any single entry in Tariff and copying ..... X X X X Extracts X X X X X X X X Extracts X X X X
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