2011 (8) TMI 950 - HC - Customs

Import - valuation and environmental concern - Import of Secondhand Digital Multifunction Printing and Copying Machines and secondhand Photocopier Machines and it accessories, parts and consumables. - Enhancement of duty -the third respondent and had issued the Standing Order No.13/2011, dated 14.6.2011 relating to the valuation of the second hand goods in general followed by note instruction, dated 14.6.2011 to all concerned specifically relating to the import of the old and used photocopiers and multifunction machines alone prescribing various modalities and cumbersome procedure. If these procedures are followed, the clearance of goods out of customs will become next impossible. It was stated that only the Central Board of Excise and Customs alone are competent to issue instructions with a view to maintain uniformity in assessment under Section 151-A of the Customs Act. Therefore, the Standing Ordrs and the note instructions issued by the third respondent are without jurisdiction. - held that - Standing Orders and note instructions, do not call for any interference. - Decided against the importer.

Issues Involved:
1. Legality of the Standing Order No. 13/2011 and Note Instruction No. 4 dated 14.6.2011 issued by the third respondent.
2. Requirement for importers to produce licenses under the Foreign Trade Policy.
3. Enhanced valuation and classification of imported secondhand digital multifunction printing and copying machines.
4. Alleged harassment and arbitrary actions by the Customs authorities.
5. Environmental concerns regarding the import of secondhand machines.

Detailed Analysis:

1. Legality of the Standing Order No. 13/2011 and Note Instruction No. 4 dated 14.6.2011
The court examined whether the third respondent had the jurisdiction to issue the Standing Order and Note Instruction. It was argued that only the Central Board of Excise and Customs (CBEC) is competent to issue instructions under Section 151-A of the Customs Act. However, the court noted that the Standing Order and Note Instruction were internal communications intended to guide subordinate officers and were not public documents. The court held that the third respondent is entitled to issue guidelines to ensure non-arbitrary actions by subordinate officers. The petitioners, being third parties, have no locus standi to challenge these internal communications unless they are legally injured by a statutory authority's order.

2. Requirement for Importers to Produce Licenses under the Foreign Trade Policy
The petitioners contended that the Customs authorities' insistence on producing licenses for importing secondhand digital multifunction machines was contrary to the Foreign Trade Policy. The court referenced a CESTAT Bangalore decision, which held that the Customs authorities' action of confiscating goods for non-production of licenses was contrary to law. However, the court found that the Standing Order and Note Instruction were primarily concerned with valuation and environmental concerns, not with licensing requirements under the Foreign Trade Policy.

3. Enhanced Valuation and Classification of Imported Secondhand Digital Multifunction Printing and Copying Machines
The petitioners argued that the Customs authorities were enhancing the value of imported goods arbitrarily and not respecting Supreme Court ratios and CBEC circulars. The court noted that the Standing Order and Note Instruction were intended to regulate the procedure for engaging Chartered Engineers to assess the value and condition of imported goods. The court found that these guidelines were necessary to ensure accurate valuation and prevent the import of e-waste. The court also referenced the CESTAT decision, which supported the use of Chartered Engineers for assessment but noted that the specific Chartered Engineer (M/s. SGS India Pvt. Ltd.) had been delisted for poor quality work.

4. Alleged Harassment and Arbitrary Actions by the Customs Authorities
The petitioners claimed that the Customs authorities were harassing importers by imposing cumbersome procedures and arbitrary actions. The court held that the guidelines issued by the third respondent were intended to prevent arbitrary actions and ensure uniformity in assessment. The court found no evidence of harassment or mala fide intentions by the Customs authorities. The court also noted that administrative orders are not open to scrutiny under Article 226 of the Constitution unless shown to be mala fide.

5. Environmental Concerns Regarding the Import of Secondhand Machines
The court emphasized the importance of environmental concerns in the import of secondhand machines. The court referenced a circular issued by the CBEC regarding the import of hazardous waste and the need to adhere to the Hazardous Waste (Management, Handling, and Transboundary) Rules, 2008. The court noted that the Standing Order and Note Instruction were consistent with these environmental regulations and aimed to prevent the import of e-waste. The court also cited the precautionary principle, which mandates that environmental measures must anticipate and prevent degradation even in the absence of scientific certainty.

Conclusion:
The court dismissed all writ petitions, upholding the legality of the Standing Order No. 13/2011 and Note Instruction No. 4 dated 14.6.2011. The court found that the guidelines were necessary for accurate valuation, preventing the import of e-waste, and ensuring uniformity in assessment. The court also emphasized the importance of environmental concerns and the precautionary principle in regulating imports.

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