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TMI Blog2021 (9) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/2020 dt. 07.10.2020 4. C/40664/2020 C/S/40202/2020 Excel Copiers C. Cus.II No.960/2020 dt. 05.10.2020 5. C/40665/2020 C/S/40203/2020 City Office Equipments C. Cus.II No.963-964/2020 dt. 07.10.2020 6. C/40666/2020 C/S/40204/2020 Atul Automation Pvt. Ltd. C. Cus.II No.965-969/2020 dt. 07.10.2020 7. C/40667/2020 C/S/40205/2020 -do- -do- 8. C/40668/2020 C/S/40206/2020 -do- -do- 9. C/40669/2020 C/S/40207/2020 -do- -do- 10. C/40670/2020 C/S/40208/2020 -do- -do- 11. C/40677/2020 C/S/40209/2020 Skylark Office Machines C.Cus.II 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-Was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered to be deformed beyond use and disposed off as scrap by the importer at their own cost in terms of Rule 3 (2) of Electronics and Information Technology Goods (Requirements for Compulsory Registration) Order 2012 read with para-2 (c) of the Import Policy for Electronic Goods and Information Technology Goods as specified in Schedule-1 of Import Policy ITC (HS) 2017 and in accordance with procedures set out in Rule 15 (2) of Hazardous & Other Wastes (Management and Transboundary Movement) Rules, 2016. (iv) imposed penalties on 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Apex Court in the S.L.P filed by MeitY in RR Marketing case against the order of Hon'ble High Court of A.P & Telangana in W.P.No.2728 of 2018. (v) The Commissioner (Appeals) held that subject goods were examined by the Chartered Engineer and were found to be functional machines with residual life and they are neither sub-standard nor defective and sub-rule 3 (2) of CRO 2012 was illegally invoked in the matter. (vi) Commissioner (Appeals) has ignored the finding of the lower authority that the importer 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 printe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht under control through a separate gazette publication called "Electronics & Information Technology Goods (Requirement of Compulsory Registration) Order, 2021" [CRO 2021] published 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) ... ... .... ... 7. Printers/ Multi-Function Devices (MFD) / Plotters IS 13252 : Part 1 : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. 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) ... 3. Prohibition regarding manufacture, storage, sale and distribution etc. of Goods - (1) No person shall by himself or through any person on his behalf manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered 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 and Rules, the Schedule to CRO 2012 covers only "printers and plotters‛ at Sl.No.7. It did not cover multi-functional devices. 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. Revenue also relies upon another D.O. letter dt. 16.08.2021 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided 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 consulting the Bureau, by an order published in the Official Gazette, notify- (a) goods or article of any scheduled industry, process, system or service; or (b) essential requirements to which such goods, article, process, system or service, which shall conform to a standard and direct the use of the Standard Mark under a licence or certificate of conformity as compulsory on such goods, article, process, system or service. Explanation.-For the purpose of this sub-section,- (i) the expression "scheduled industry" shall have the meaning assigned to it in the Industries (Development and Regulation) Act, 1951; (ii) it is hereby clarified that essential requirements are requirements, expressed in terms of the parameters to be achieved or requirements of standard in technical terms that effectively ensure that any good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso 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 to arrest [Section 104] and conviction [Section 135]. It is a well settled Rule of Interpretation that fiscal and penal statues must be strictly interpreted. Therefore, a prohibition / restriction cannot be imposed and goods confiscated based on letters / circulars of MeitY. If there is no explicit prohibition / restriction, nothing can be read into the entry in CRO 2012 so as to enlarge the scope of prohibition. Sections 111(d), (l) and (m) under which the goods were confiscated by the lower authorities are reproduced below: ''SECTION 111. Confiscation of improperly imported goods, etc. - The following goods brought from a place outside India shall be liable to confiscation: - (a) ... ... ... ... ... ... (d) any goods which are imported or attempted to be imported or are brought within the Indian customs wate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 not apply as there was no standard prescribed under the CRO for MFDs. The circulars and letters of the Ministry are at best executive opinions and they cannot take the place of law. We have also observed that the CRO itself has imposed restriction on imports going beyond the scope of BIS Act, 1986 and BIS Rules 1987 neither of which (unlike BIS Act, 2016) provided for prescribed standards or for regulating imports. Therefore, the question of mutilation of goods does not arise. In so far as Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2008 is concerned, these define hazardous waste, other waste and waste, under Rule 3 (1) (l) as follows : "3. Definitions: - (1) In these Rules, unless the context otherwise requires, - ... ... .... .... ... .... (17) "hazardous waste" means any waste which by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified 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 authorities. Revenue has placed emphasizes on Rule 15 of the Hazardous Waste Rules which reads as under : "15. Illegal traffic.- (1) The export and import of hazardous or other wastes from and into India, respectively shall be deemed illegal, if,- (i) it is without permission of the Central Government in accordance with these rules; or (ii) the permission has been obtained through falsification, mis-representation or fraud; or (iii) it does not conform to the shipping details provided in the movement documents; or (iv) it results in deliberate disposal (i.e., dumping) of hazardous or other waste in contravention of the Basel Convention and of general principles of international or domestic law. (2) In case of illegal import of the hazardous or other waste, the importer shall re-export the waste in question at his cost within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "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 are useful goods with some residual life and cannot be called hazardous waste by any stretch of imagination. Therefore, the Hazardous Waste Rules do not apply to the impugned goods. 30. So far as the Foreign Trade Policy is concerned, it is true that import of Second Hand MFDs were restricted and required an authorization which the respondents did not have. Therefore, the confiscation of the goods under Section 111 (d) is valid. Having confiscated, the goods can be allowed for redemption under Section 125 of the Customs Act, 1962 which reads as follows : 'SECTION 125. Option to pay fine in lieu of confiscation. - (1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese 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 provided for such contravention or failure, shall be liable to a penalty not exceeding one lakh rupees". SECTION 49. Storage of imported goods in warehouse pending clearance or removal. - Where,-- (a) in the case of any imported goods, whether dutiable or not, entered for home consumption, the Assistant Commissioner of Customs or Deputy Commissioner of Customs is satisfied on the application of the importer that the goods cannot be cleared within a reasonable time; (b) in the case of any imported dutiable goods, entered for warehousing, the Assistant Commissioner of Customs or Deputy Commissioner of Customs is satisfied on the application of the importer that the goods cannot be removed for deposit in a warehouse within a reasonable time, the goods may pending clearance or removal, as the case may be, be permitted to be stored in a public warehouse for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avention 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 were not waste in the first place but are useful articles with residual life whose value has been enhanced by Customs authorities and therefore the provisions of Hazardous Waste Rules do not apply. In view of the above, we hold as under :- (1) Electronics & Information Technology Goods (Requirement for Compulsory Registration) Order 2012 has gone beyond the Act and Rules in imposing a restriction from imports. Even these restrictions were confined only to printers and plotters. Multi-Functional Devices were not covered under this order. The letters and circulars of the MeitY cannot take the place of law and therefore the goods were not prohibited for import. (2) The impugned goods are useful second hand goods with residual life and are not hazardous waste and hence are correctly allowed redemption for home consumption. (3) Valuation of the goods by Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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