TMI Blog2006 (4) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... f goods or rendering services. Thus, we are inclined to allow these appeals and set aside the orders passed by the Tribunal. - HON'BLE K.S. PANICKER RADHAKRISHNAN AND K.M. JOSEPH, JJ. For the Appellant : John Varghese, ASG For the Respondent : S.K. Bagaria, Sr. Counsel, V.M. Kurian, Mathew B. Kurian and K.T. Thomas, Advs. JUDGMENT K.S. Panicker Radhakrishnan, J. 1. These appeals have been preferred by the Commissioner of Customs. Common questions arise for consideration in all these appeals and hence we are disposing of these cases by a common judgment. Question posed is whether second-hand photocopiers are capital goods or consumer goods and whether the import of second-hand photocopiers require licence and whether the import is governed by paragraph 2.17 of the Export Import Policy 2004-2009. Conflict of opinions were expressed by various Benches of the Tribunals and consequently the matter was referred to a Full Bench of CESTAT. CESTAT took the view that second-hand photocopiers are capital goods within the meaning of paragraph 9.12 and freely importable under paragraph 2.17 and are not consumer goods within the meaning of Exim Policy for the year 2004-2009 Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this policy it was clarified by the DGFT vide circular 16 dated, 29-9-2003 that second-hand personal computers and laptops are covered under definition of second-hand goods and their import is governed by para 2.17 of the policy and not covered under the definition of capital goods as defined under para 9.10 of policy and para 2.33 of hand book of procedures. In continuation to that it was further clarified by DGFT vide Circular 19, dated 11-11-2003 that second-hand photocopier machines, air-conditioners, diesel generating sets are also covered under the definition of 'second-hand goods' and their import is governed by 2.17 of policy which restricts import of second-hand goods without licence. Thus, by Circular 16, dated 29-9-2003 and 19 dated 11-11-2003 DGFT clarified that import of second-hand photocopiers are governed by para 2.17 and not by para 2.33. Para 2.17 restricts import without licence. It was further reaffirmed by DGFT under the current policy (2004-2009) also vide policy Circular 20 (2004-09) dated 23-2-2005 that the used photocopiers are restricted for import under para 2.17. Copy of policy circular is enclosed. Thus in view of the clarification cited above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given option to the importer to redeem the same on payment of a fine of Rs. 6 lakhs. Further a penalty to Rs. 2 lakhs was also imposed under section 112 of the Customs Act, 1962. Aggrieved by the said order matter was taken up before the CESTAT. CESTAT allowed the appeal vide its order dated 11-5-2005. 5. Tribunal took the view that second-hand photocopiers are capital goods within the meaning of paragraph 9.12 and freely importable under paragraph 2.17 and are not consumer goods. Tribunal has also found the circulars Nos. 16/03, 19/03 and 20/05 issued by the Director General of Foreign Trade dealt with imports under the EPCG Scheme and those circulars have no application to the general imports of the nature made by the importer and therefore held that second-hand photocopiers are capital goods within the meaning of paragraph 9.12 and freely importable under paragraph 2.17 and are not consumer goods. 6. Sri John Varghese, Assistant Solicitor General contended that since the respondent assessee is a trader dealing in the purchase and sale of photocopiers it cannot be said that purchase and sale of second-hand photocopiers can be considered as capital goods. Counsel further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er EPCG Scheme. Counsel elaborately took us through various provisions of the Exim Policy in order to support his contentions. 8. Indisputedly on the issuance of the notification by Government of India on 19th October, 2005 in exercise of powers conferred under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 read with paragraph 1.3 of the Foreign Trade Policy, 2004-2009. Import of second-hand personal computers, laptops, photocopier machines, air conditioners, diesel generating sets will only be allowed against a licence issued in this behalf. Question to be considered is as to whether import of second-hand photocopiers effected prior to 19th October, 2005 would be governed by the circulars Nos. 16/03, 19/03 and 20/05 issued by DGFT warranting a licence for import. As per paragraph 2.3 of the EXIM Policy if any question or doubt arises in respect of the interpretation of any provision contained in the Exim Policy or regarding the classification of any item in the ITC (HS) or Handbook (Vol. I) or Handbook (Vol. 2) or Schedule of DEPB Rate, the said question or doubt shall be referred to the Director General of Foreign Trade whose decision thereon shall be final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted under EPCG Scheme provided they required for manufacturing of goods or rendering services. On a combined reading of circular Nos. 16/03, 19/03 and 20/05 we are of the view the second-hand photocopiers are not covered under the definition of capital goods as defined under paragraphs 9, 10 of Exim Policy. Same is the position under the EPCG Scheme as well and the only exception is that import of new photocopier machines may be permitted under the EPCG Scheme provided they required for manufacturing of goods or rendering services. Above being the meaning and purport of the various circulars we are of the view the finding of the Tribunal that those circulars relate only to import under EPCG Scheme cannot be sustained. 10. We are of the view, second-hand photocopier machines imported by the importer would also be governed by the above-mentioned circulars the exemption which we have already stated is with regard to the import of new photocopier machines, under EPCG Scheme provided they are required for manufacturing of goods or rendering services. The goods imported by the importer will not fall under that category. Consequently the order passed by the Tribunal cannot be sustained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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