2014 (5) TMI 563 - AT - Customs

Confiscation of goods - import of consignment of Digital Multifunction Printing and copying Machines - whether the Digital Multifunction Printing and copying Machines (Old and used), imported prior to 05.06.2012 are hit by Para 2.17 of the Foreign Trade Policy, which placed the same under the restricted category with effect from 05.06.2012 - Difference of opinion - Matter referred to larger bench with following question - Whether the Digital Multifunction printing and photocopying machines imported prior to 6.6.2012 do not require a license for importation of the same as held by Member (Judicial) or the same require a license for importation as held by Member (Technical)?.

Summary

Issues Involved:
1. Classification of Digital Multifunction Printing and Copying Machines.
2. Requirement of import license for Digital Multifunction Printing and Copying Machines imported prior to 05.06.2012.
3. Applicability of Para 2.17 of the Foreign Trade Policy.
4. Relevance of previous judicial decisions and technical committee reports.
5. Interpretation of Customs Act and other related statutes.

Issue-wise Detailed Analysis:

1. Classification of Digital Multifunction Printing and Copying Machines:
The core issue revolves around whether Digital Multifunction Printing and Copying Machines fall under the restricted category of photocopier machines as per Para 2.17 of the Foreign Trade Policy. The Tribunal and previous judicial decisions, including the case of M/s Shivam International and M/s Sree Maa Enterprises v. C.C. Cochin, have established that these machines, being multifunctional, do not fall under the restricted category of photocopier machines. The classification dispute was addressed by examining the Harmonized System of Nomenclature (HSN) explanatory notes and the Chartered Engineer Certificate, which confirmed that these machines are multifunctional and not merely photocopiers.

2. Requirement of Import License for Digital Multifunction Printing and Copying Machines Imported Prior to 05.06.2012:
The Tribunal, referencing decisions such as CCE, Delhi v. M/s. Best Mega International and the Hon'ble Madras High Court in Anand Impex and Sai Graphic System, concluded that there was no restriction on importing old and used Digital Multifunction Printing and Copying Machines before 05.06.2012. The Foreign Trade Policy was amended to include these machines in the restricted category only from 05.06.2012 onwards. Therefore, imports prior to this date did not require an import license.

3. Applicability of Para 2.17 of the Foreign Trade Policy:
Para 2.17 of the Foreign Trade Policy initially restricted only photocopier machines. The Technical Review Committee of the Ministry of Environment and Forests, in its meeting on 16.11.2011, treated Digital Multifunction Printing and Photocopying Machines as distinct from photocopiers, leading to their inclusion in the restricted category only from 05.06.2012. This differentiation was crucial in determining that imports before this date were not subject to the same restrictions.

4. Relevance of Previous Judicial Decisions and Technical Committee Reports:
The Tribunal heavily relied on previous judicial decisions and technical committee reports to resolve the issue. The decisions of the Hon'ble Madras High Court and the Tribunal's own prior rulings provided a consistent interpretation that supported the non-restriction of these imports before 05.06.2012. The Tribunal also noted the importance of following High Court decisions over conflicting Tribunal decisions, as seen in the case of Unitech Enterprises.

5. Interpretation of Customs Act and Other Related Statutes:
The Customs Act, 1962, along with other statutes such as the Hazardous Waste (Management Handling and Transboundary) Rules, 2008, governs the import of goods into India. The Tribunal emphasized that the Customs Authority has the jurisdiction to judge the applicability of various laws relating to imports. The decision in Atul Commodities and the subsequent notifications and circulars clarified that second-hand photocopier machines of all kinds were restricted from 19.10.2005. However, the specific inclusion of Digital Multifunction Printing and Copying Machines in the restricted category only occurred from 05.06.2012.

Separate Judgments Delivered:
One member (Judicial) held that the old and used Digital Multifunction Printing and Copying Machines imported prior to 05.06.2012 did not require an import license, aligning with the decisions in Best Mega International and other cases. The other member (Technical) disagreed, emphasizing the broader classification and the DGFT notification, concluding that these machines were restricted and required a license even before 05.06.2012. This difference in opinion led to the matter being referred for a final decision on whether such imports prior to 05.06.2012 required a license.

Conclusion:
The majority view in the Tribunal upheld that Digital Multifunction Printing and Copying Machines imported before 05.06.2012 did not require an import license, based on the interpretation of the Foreign Trade Policy, previous judicial decisions, and technical committee reports. However, the differing opinion highlighted the need for a more detailed examination of the import dates and applicable laws at the time of import.