2015 (2) TMI 1221 - AT - Customs

Classification of imported item - restricted item - Whether the Digital Multifunction Printing and copying Machines (Old and used) imported prior to 5-6-2012 are hit by Para 2.17 of the Foreign Trade Policy which placed the same under the restricted category with effect from 5-6-2012? - Held that - the import of second-hand multifunction machines became restricted only w.e.f. 5-6-2012 and before 5-6-2012 these second-hand capital goods could be imported without any import licence. The Technical Review Committee of the Ministry of Environment and Forest in meeting held on 16-11-2011 considered the photocopier machines and multifunction machines as different goods though with similar function and recommended putting restrictions on import of second-hand multifunction machines. In fact if the word photocopier machines also covered the Digital Multifunction Print and copying machines there would have been no necessity for the DGFT to specifically include the second-hand multifunction machines in Para 2.17 of the EXIM Policy. Appeal rejected - decided against Revenue.

Issues Involved:
1. Whether the Digital Multifunction Printing and Copying Machines imported prior to 5-6-2012 fall under the restricted category as per Para 2.17 of the Foreign Trade Policy.
2. Whether the import of such machines required a license before 5-6-2012.
3. The classification of Digital Multifunction Printing and Copying Machines under the appropriate tariff heading.
4. The applicability of the judgment of the Hon'ble Madras High Court and earlier Tribunal decisions on this matter.

Issue-wise Detailed Analysis:

1. Restricted Category under Para 2.17 of the Foreign Trade Policy:

The core issue is whether Digital Multifunction Printing and Copying Machines imported before 5-6-2012 are restricted under Para 2.17 of the Foreign Trade Policy. The Commissioner (Appeals) granted relief to the respondent, observing that these machines were multifunctional and not merely photocopiers. The Revenue appealed, arguing that these machines should be considered restricted as they fall under the category of photocopiers, which required an import license as per Para 2.17.

2. Requirement of License for Import Prior to 5-6-2012:

The Tribunal found that the issue was settled by a recent decision in the case of CCE, Delhi v. M/s. Best Mega International, where it was held that there was no restriction on the import of old and used Digital Multifunction Printing and Photocopying Machines before 5-6-2012. The Hon'ble Madras High Court in Anand Impex and Sai Graphic System cases also ruled that these machines were not restricted for import before 5-6-2012. The Tribunal noted that the government treated Digital Multifunction Printing and Photocopying Machines as different from photocopiers, which led to the amendment of Para 2.17 on 5-6-2012 to include these machines.

3. Classification under Appropriate Tariff Heading:

The Revenue argued that Digital Multifunction Printing and Copying Machines should be classified under the same heading as photocopiers, thus requiring a license. However, the Tribunal in the Best Mega International case classified these machines under a different sub-heading (8443.31 00), supporting the view that they were not restricted before the amendment on 5-6-2012. The Tribunal also noted that the Chartered Engineer Certificate confirmed these machines were not e-waste and had a remnant life of more than 5 years.

4. Applicability of High Court and Tribunal Decisions:

The Tribunal emphasized that the issue had been settled by the Hon'ble Madras High Court and earlier Tribunal decisions, which must be followed. The Tribunal rejected the Revenue's appeal, holding that the Digital Multifunction Printing and Copying Machines were not restricted for import before 5-6-2012 and did not require an import license.

Separate Judgment Analysis:

Majority Order:

The majority order by Ms. Archana Wadhwa and Shri B.S.V. Murthy concluded that there was no restriction on importing Digital Multifunction Printing and Copying Machines before 5-6-2012, and no import license was required. This conclusion was based on the decisions of the Hon'ble Madras High Court and the Tribunal's previous rulings.

Dissenting Opinion:

Shri Manmohan Singh, Member (T), dissented, arguing that the import of these machines required a license based on the broader interpretation of the term "photocopier machines" and the principles established in the Unitech Enterprises case. He emphasized the importance of considering the date of import and the applicable law at that time, proposing a detailed examination of each case's specifics.

Final Order:

The point of difference was resolved by Shri Rakesh Kumar, Member (T), who agreed with the majority view that the import of these machines did not require a license before 5-6-2012. Consequently, all appeals filed by the Revenue were rejected, affirming that Digital Multifunction Printing and Copying Machines imported before 5-6-2012 were not restricted goods.

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