2013 (4) TMI 655 - HC - Customs

Imports of used digital multifunction and copying machine under the Foreign Trade Policy 2009-2014 - Whether the import of these goods is restricted as per Para 2.17 of the Foreign Trade Policy or not? As per Notification No.35 (RE02012)/ 2009-2014 the Government had amended Para 2.17 of the Foreign Trade Policy. Held that It is no doubt true that in exercise of the powers conferred under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, read with paragraph 2.1 of the Foreign Trade Policy, 2009-2014, under Notification No.35 (RE02012)/ 2009-2014 the Government had amended Para 2.17 of the Foreign Trade Policy that under the Head of second hand goods , in the category of second hand capital goods , import of (i) personal computers/ laptops, including their refurbished / reconditioned spares; (ii) photocopier machines/Digital multifunction print and copying machines (iii) Air conditioners and (iv) Diesel generating sets can be imported only as against authorisation. Taking the said amendment further, rightly, the Hand Book of Procedures (Vol.1) omitted Clause 2.33. The amendment to the policy has no relevance to the import under consideration. A comparative study of Notification No.35 (RE02012)/2009-2014 dated 28.02.2013 amending Para 2.17 of the Foreign Trade Policy and the provision that existed prior to 28.02.2013, show that the amended notification made the import policy regime as subject to an authorisation for import as against the original requirements viz., allowed to be imported only as per provisions of FTP, ITC(HS), HBPv1, Public Notice or an authorisation issued for import of the specified second hand item. In the light of the amendment and the clear provision, we do not find any justifiable ground to accept the case of the appellants to interfere with the order of the learned single Judge. We have already held that there is no conflict between the policy and the procedure laid down.

Issues Involved:
1. Import policy for second-hand digital multifunction print and copying machines under the Foreign Trade Policy 2009-2014.
2. Interpretation of Para 2.17 of the Foreign Trade Policy and Clause 2.33 of the Handbook of Procedures (Vol-1).
3. Conflict between Foreign Trade Policy and Handbook of Procedures.
4. Applicability of amendments to Para 2.17 post 28.02.2013.

Issue-wise Detailed Analysis:

1. Import Policy for Second-Hand Digital Multifunction Print and Copying Machines:
The respondents sought a Writ of Mandamus to direct customs authorities to assess and permit clearance of used second-hand digital multifunction print and copying machines upon payment of applicable duties. They contended that the restriction imposed under Notification No.I(RE-2012)2009-14 dated 05.06.2012 did not govern these goods. The learned single Judge allowed the writ petitions, directing the appellants to release the imported goods on payment of customs duties by treating them as freely importable under Clause 2.33 of the Handbook of Procedures (Vol-1).

2. Interpretation of Para 2.17 of the Foreign Trade Policy and Clause 2.33 of the Handbook of Procedures (Vol-1):
Para 2.17 of the Foreign Trade Policy categorizes second-hand goods into restricted and free categories. The appellants argued that digital multifunction and copying machines are restricted items and not freely importable. However, the respondents contended that Clause 2.33 of the Handbook of Procedures (Vol-1) allows the free import of second-hand capital goods, including digital multifunction print and copying machines. The court agreed with the respondents, stating that Clause 2.33 allows free import of second-hand capital goods except personal computers/laptops, and thus, digital multifunction print and copying machines are freely importable.

3. Conflict Between Foreign Trade Policy and Handbook of Procedures:
The appellants argued that in case of any conflict between the Foreign Trade Policy and the Handbook of Procedures, the policy should prevail. They cited various judgments to support their contention. However, the court found no conflict between Para 2.17 of the Foreign Trade Policy and Clause 2.33 of the Handbook of Procedures. The court held that the import policy regime on second-hand capital goods is laid down clearly in Clause 2.33, and there is no restriction on the free import of digital multifunction print and copying machines.

4. Applicability of Amendments to Para 2.17 Post 28.02.2013:
The appellants relied on Notification No.35 (RE02012)/2009-2014 dated 28.02.2013, which amended Para 2.17 to require authorization for importing second-hand digital multifunction print and copying machines. The court noted that this amendment is relevant only for the period post 28.02.2013 and does not apply to imports made before this date. The court rejected the appellants' contention that the amendment has retrospective effect, stating that the clear terms of the policy and procedure do not call for any interpretative process.

Conclusion:
The court dismissed the writ appeals filed by the Commissioner of Customs, Additional Commissioner of Customs (Imports), Director General of Foreign Trade, and the Additional Secretary to the Government of India. The court confirmed the order of the learned single Judge, directing the appellants to release the imported goods to the respondents within four weeks. The court found no conflict between the Foreign Trade Policy and the Handbook of Procedures and held that the import of second-hand digital multifunction print and copying machines is freely permissible under Clause 2.33 of the Handbook of Procedures (Vol-1).

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