TMI Blog2021 (9) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... ON PVT. LTD., DELHI PHOTOCOPIERS, KUTTY IMPEX, PHOTO FAX SYSTEM, GEE KAY COMPUTERS AND BEST MEGA INTERNATIONAL) [ 2021 (9) TMI 183 - CESTAT CHENNAI ] where it was held that The case of the Revenue is that Ministry of Electronics Information Technology has issued a circular No.1/2019 dt. 02.05.2019 clarifying that multi-functional devices are basically printers with additional features and covered under the category of 'printers and plotters' as notified in the order - the case of the Revenue regarding prohibition of import lies on a shaky ground of circular issued by MeitY which effectively enlarged the scope of entry in the order itself. The impugned orders are upheld and appeals filed by Revenue are rejected with consequential relief to the respondents. The impugned goods, if not released already by the Customs, must be cleared for home consumption within 10 days from the date of receipt of copy of this order, if the respondents pay the duty and other dues as per the impugned orders - application disposed off. - C/40568-40569 of 2020, C/40663 -40670 of 2020 and C/40677 of 2020 - FINAL ORDER Nos. 42309-42319 / 2021 - Dated:- 15-9-2021 - Ms. SULEKHA BEEVI C.S, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.959/2020 dt.05.10.2020 3. Brief facts of the case are that respondents herein filed various Bills of Entry to import used Digital Multi-Function Printers / Devices [MFDs] [MFDs] of various makes and models with standard accessories and attachments classifying them under Customs Tariff Heading 84433100. They were examined on first check appraisal in the presence of Chartered Engineer to verify (a) residual life of the goods (b) nature of the accessories (c) the requirement of compliance of conditions imposed under Hazardous Other Wastes (Management and Transboundary Movement) Rules, 2016 [Hazardous Waste Rules] (d) E-Waste (Management) Rules, 2016 [e-Waste Rules] (e) Authorization of DGFT under Foreign Trade Policy 2015-2020 [FTP]; and (f) applicability of Bureau of Indian Standards [BIS] as per Electronics and Information Technology Goods (Requirement for Compulsory Registration) Order 2012 [CRO 2012]. The Chartered Engineer submitted his report and also appraised the value of the goods. After perusal of the documents, the lower authority found as follows : (i) The values declared by the importers are liable to be rejected under the Customs Valuation Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the importers under Section 112 (a) of the Customs Act, 1962 for having rendered the goods liable for confiscation under Section 111 (d) and Section 111 (o) of the Act. (v) imposed penalty on the importer under Section 117 of the Customs Act, 1962 for non-compliance of the procedures under Section 49 of the Customs Act, 1962. 6. Aggrieved, the respondents herein appealed to the Commissioner (Appeals) who, by the impugned orders, partly allowed the appeals as follows : (a) reducing the redemption fine imposed under Section 125 of the Customs Act and allowing respondents to redeem the goods for home consumption. (b) reducing the penalty imposed under Section 112 (a) of the Customs Act, 1962 except in Appeal C/40663/2020 (CC Chennai Vs Delhi Photocopiers) wherein he upheld Section 112 (a) penalty imposed by the original authority. (c) setting aside the penalty under Section 117 of the Customs Act, 1962. 7. Aggrieved by the said orders passed by Commissioner (Appeals), Revenue has filed these appeals along with stay applications. With consent of both sides, stay applications along with main appeals were heard. 8. Ld. A.R Shri S. Balakumar reiterated the grounds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rter has not complied with mandatory conditions under the Hazardous Waste Rules which warrants disposal of imported goods in accordance with Rule 15 (2) i.e., they should be either re-exported or disposed by Customs as waste with permission of the Pollution Control Board. 9. Further, the following points were asserted by Revenue : (1) Imported second hand goods prior to 07.05.2019 required registration with BIS and the importer neither obtained registration under CRO 2012 nor obtained any specific exemption from MeitY. (2) The MeitY has issued DO letters that imported devices are basically printers with copiers like PCs etc. and are covered under the category of printers / plotters vide DGFT notification dt. 03.10.2012 requiring registration with BIS as per CRO 2012. (3) The Directorate of Revenue Intelligence has issued an alert circular that multi-functional copiers should be in accordance with rules and provisions of CRO 2012. The substantial question of law with regard to requirements of BIS registration under CRO 2012 is pending with the Hon'ble Apex Court. The certificate of the Chartered Engineer does not alter the requirement of mandatory statutory complianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lished vide S.O.1248 (E) dt. 18.03.2021. Rule 2 of this order reads as under : 2. Compulsory use of standard mark :- Goods or articles specified in the column (2) of the Schedule below shall conform to the corresponding Indian Standard given in the column (3) of the said Schedule and shall bear the Standard Mark under a license from the Bureau of Indian Standards as per Scheme-lI of Schedule-II of Bureau of Indian Standards (Conformity Assessment) Regulations, 2018, provided that nothing in the Order shall apply in relation to goods or articles, as specified in the column (2) of the said Schedule meant for export which conform to the specification required by the foreign buyer and to goods or articles, for which the Central Government has issued specific exemption letter based on reasons to be recorded in writing. SCHEDULE S.No Goods or Articles Indian Standard Title of Indian Standard (1) (2) (3) (4) . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed to be imported without prior permission from MeitY. In such cases, the unregistered products shall be detained at customs and the matter should be brought into notice of Meity for necessary action. Yours sincerely Sd/- (Rajiv Bansal) Shri L Satya Srinivasa Joint Secretary (Customs) Central Board of Excise and Customs Department of Revenue, North Block, New Delhi 110 001. 11. Heard both sides. The issue has been considered and analysed by this Tribunal in a batch of appeals vide Final Order No.41931-41971/2021 dated 27.08.2021. The discussions and findings of the Tribunal in the above stated final order are reproduced as under : 20. The CRO order 2012 was notified vide S.O 8.(14)/2006-IPHW (Vol-III) and reads as follows : In exercise of the powers conferred by section 10 (1) (p) of the Bureau of Indian Standards Act, 1986 (63 of 1986) and in pursuance of clause (fa) of rule 13 of the Bureau of Indian Standards Rules, 1987, the Central Government, after consulting the Bureau of Indian Standards, hereby makes the following Order, namely :- 1. Short title and commencement (1) .... (2) .... 2. Definitions : (1) .... (2) ... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to quality maintenance and improvement in products and processes; b. promote harmonious development in standardization, quality systems and certification, and matters connected therewith both within the country and at international level; c. ..... d. ...... e. ... f. .... (fa) formulate, implement and coordinate activities relating to registration for self declaration of conformity to the relevant Indian Standard on voluntary or compulsory basis, of articles as may be considered expedient in public interest and so notified through an order by the Central Government after consulting the Bureau . A perusal of the entire BIS Rules, 1987 also shows that just like BIS Act, 1987, BIS Rules 1987 did not provide for regulating or prohibiting import of goods. Therefore, CRO 2012 has, in clause (3), gone beyond the scope of the Act and the Rules in prescribing a standard for import of goods and in prohibiting import of goods which did not meet the standards. Therefore, it is doubtful, whether in the first place, whether the CRO 2012 is legally sustainable. 22. Be that as it may, even if it is ignored that CRO 2012 was issued beyond the scope of the parent Act an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued specific exemption letter based on reasons to be recorded in writing. .... .... .... .. ..... SCHEDULE S.No. Goods or articles Indian Standard Title of Indian Standard (1) (2) (3) (4) . 7. Printers / Multi-Function Devices(MFD) Plotters/ IS 13252 : Part 1 : 2010 Information Technology Equipment - Safety General Requirements This order was passed under the BIS Act, 2016 which replaced BIS Act, 1986. BIS Act, 2016 specifically provided for regulating imports Section 16 17 of the Act read as follows : '' 16 . (1) If the Central Government is of the opinion that it is necessary or expedient so to do in the public interest or for the protection of human, animal or plant health, safety of the environment, or prevention of unfair trade practices, or national security, it may, after consulti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion thereof, except under a valid licence from the Bureau.'' As may be seen, the BIS Act, 2016 is an advancement of the BIS Act, 1986 and has provided for regulation of imports also. Consequently, the CRO 2021 issued under BIS Act, 2016 also covers imports. 24. The present case however pertains to CRO 2012 with respect to which the following can be concluded: (1) CRO 2012 was issued under the BIS Act, 1986 and BIS Rules 1987 neither of which had any provision to regulate imports. Clause (3) of CRO 2012 therefore went beyond the scope of the Act and Rules and imposed controls over imports as well. (2) CRO 2012 covers only to 'printers and plotters' and not to ''MFDs''. The circular and the letters issued by the MeitY went beyond the scope of CRO 2012 and sought to apply them to MFDs also on the ground that they are also in the form of printers. (3) Customs Act, 1962 is both a fiscal statute and also a penal statute. Import of goods contrary to any prohibitions not only render such goods liable to confiscation under Section 111 of the Act, it amounts to smuggling [as per Section 2 (39) of the Act] and the persons involved will be liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inable and needs to be set aside which we do so. 25. It is undisputed that the goods were second hand in nature and were examined by the Customs under first check and were verified by expert Chartered Engineer and the import duty was recalculated accordingly under CVR 2007. Neither side is disputing the valuation. Therefore, the valuation of the imported goods does not call for any interference. Consequently, the confiscation of the goods or misdeclaration under Section 111 (m) also need not be interfered with. 26. The assertion of the Revenue is that Ld. Commissioner (Appeals) allowed redemption of the goods under Section 125 for home consumption and that the goods should have been ordered to be either re-exported, or destroyed as being sub-standard and defective goods under CRO clause (3) (2). It is also the assertion of the Revenue that the goods fall under 'hazardous waste' and are regulated by Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2008. We have considered these submissions. We have already held that CRO 2012 does not cover the impugned goods. Therefore, the question of mutilation of the goods under clause 3 (2) of CRO 2012 does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not intended to be produced but gets produced in the production process of intended product and is used as such; 27. In this case, the goods in question were examined by the Chartered Engineer in the presence of the importers and the Customs officers and it was found that they have residual life and they are not waste as per Rule 3 (38) of the Hazardous Waste Rules because the goods in question have further use. It is true that as per Rule 2 (23) of these Rules means wastes specified in Part B and Part D of Schedule III for import or export‛. Schedule III, Part D does include at entry B1110 Used multifunction print and copying machines (MFDs)***. The footnote ***‛ states Import permitted in the country only to the actual users from Original Equipment Manufacturers (OEM) and subject to verification of documents specified in Schedule VIII of these Rules by the Customs Authority. 28. Even if used MFDs are listed as other wastes they must be wastes‛ in the first place as per the very Rules. The impugned goods in these cases are not. They have further use and therefore cannot be called waste‛. In fact, their value was enhanced by the Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Rule. While used MFDs are listed in the Schedule as Other Waste and hence covered by the mischief of these Rules for them to be classified as other waste , they must be waste in the first place. Goods with further use are not waste as per the Rules. 29. Analogy can be drawn from the Central Excise Act which levies duty on excisable goods which are manufactured or produced in India. Excisable goods are defined as those listed in the Central Excise Tariff . Through a series of judicial pronouncements, it is well settled that it is not sufficient for something to be listed in the Tariff to be excisable goods but they should be goods in the first place, i.e., they must be capable of being bought and sold in the market. Similarly, in this case while other wastes listed in the Schedule includes used MFDs, they must be waste and the impugned goods do not qualify as waste as per Rule 3 (38). Therefore, the requirement of re-export or destruction under Rule 15 does not apply to the impugned goods. Revenue has, in fact, increased the value of imported goods. Had they been a waste, value should have been Nil or something close to it. Therefore, they ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation) Order (CRO) 2012, the communication dated 06.12.2016 makes it clear that only repaired/refurbished/second hand items, if notified, would require registration. The learned Assistant Solicitor General could not produce before us any notification issued thereunder relating to the MFD (Multi Function Devices) printers and photocopiers, whereby such registration would be a condition precedent prior to their import. In the absence of such a notification, it is not open to the Customs Authorities to blindly apply the directive of the Department of Electronics and Information Technology, Ministry of Communications and Information Technology, under the letter dated 06.12.2016, to the petitioner firm s goods. 32. As far as the penalty under Section 117 is concerned, it was imposed by the original authority for violation of provisions of Section 49. These two sections read as follows : SECTION 117. Penalties for contravention, etc., not expressly mentioned. - Any person who contravenes any provision of this Act or abets any such contravention or who fails to comply with any provision of this Act with which it was his duty to comply, where no express penalty is elsewhere provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st shall be payable. Section 71 prohibits anybody from taking out warehoused goods except on clearance for home consumption or export or for removal to another warehouse or as otherwise provided under the Act. Provisions have been made for dealing with cases where goods have been improperly removed from the warehouse under Section 72. None of these provisions apply to goods deposited in a warehouse under Section 49 in view of the first proviso to Section 49 which says that the provisions of Chapter IX do not apply to goods deposited under Section 49. Therefore, there is neither any obligation to do anything nor prohibition of any act under Section 49. Therefore, there cannot be any contravention under Section 49. It is only an enabling provision for the Assistant Commissioner and the Commissioner. Therefore, no penalty can be imposed under Section 117 for contravention of Section 49 and the Ld. Commissioner (Appeals) is correct in setting aside penalty under Section 117. 34. There is no dispute regarding reduction of penalty under Section 112 (a) by the Commissioner (Appeals) which we also find is fair and reasonable. 35. We have already discussed above that goods in question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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