2018 (4) TMI 1668 - HC - Customs

Release of detained goods - applicability of Electronics and IT Goods (Requirement for Compulsory Registration) Order (CRO), 2012 - grievance of the petitioner firm is that the Customs authorities are refusing to release these two later consignments despite completion of required formalities - Held that - There is no explanation forthcoming as to the contradiction between the Foreign Trade Policy 2015-20 which came into effect from 01.04.2015 and the notification dated 17.01.2017. It is however an admitted fact that the petitioner firm suffered the Order-in-Original dated 05.07.2017 passed by the Joint Commissioner of Customs, Kolkata, confiscating its first consignment under Sections 111(d) and 111(m) of the Customs Act, 1962 but permitting it the option of redeeming the said goods on payment of fine of ₹ 3,30,000/- under Section 125 thereof and penalty of ₹ 1,45,000/- under Section 112(a) thereof. The petitioner firm admits that it paid the aforestated fine and penalty in Para 3 of the writ affidavit. This order therefore attained finality. That being so, there is no reason as to why the later consignments of the petitioner firm, which have been withheld, should not be treated alike. Applicability of the Electronics and IT Goods (Requirement for Compulsory Registration) Order (CRO), 2012 - Held that - The communication dated 06.12.2016 makes it clear that only repaired/refurbished/second hand items, if notified, would require registration. The learned Assistant Solicitor General could not produce before us any notification issued thereunder relating to the MFD (Multi Function Devices) printers and photocopiers, whereby such registration would be a condition precedent prior to their import. In the absence of such a notification, it is not open to the Customs Authorities to blindly apply the directive of the Department of Electronics and Information Technology, Ministry of Communications and Information Technology, under the letter dated 06.12.2016, to the petitioner firm s goods. Petition allowed.

Summary

Issues:
1. Detention of containers by Customs authorities at Kolkata Port and ICD-Bangalore.
2. Refusal of clearance for goods based on the Electronics and IT Goods (Requirement for Compulsory Registration) Order (CRO), 2012.
3. Compliance with Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016.
4. Interpretation of Foreign Trade Policy 2015-20 regarding import of second-hand goods.
5. Confiscation of the first consignment and subsequent treatment of later consignments.

Analysis:
1. The petitioner firm challenged the detention of its containers at Kolkata Port and ICD-Bangalore by Customs authorities, seeking a declaration that the refusal of clearance for goods was illegal. The firm, registered under the Micro, Small and Medium Enterprises Development Act, imported used MFD printers and photocopiers. The Customs authorities cited the Electronics and IT Goods (Requirement for Compulsory Registration) Order (CRO), 2012, for withholding the goods.

2. The Customs authorities relied on the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, which specify the documents required for the import of used multifunction print and copying machines. The petitioner firm failed to submit the necessary documents for the withheld consignments, leading to the refusal of clearance. The Foreign Trade Policy 2015-20 also outlined restrictions on the import of second-hand goods, requiring authorization for certain categories, including photocopier machines and digital multifunction print and copying machines.

3. The judgment highlighted a discrepancy between the Foreign Trade Policy 2015-20 and a notification dated 17.01.2017, which indicated free import policy for certain machines. The court noted the confusion regarding the import policy for second-hand goods and emphasized the need for consistency in government notifications and policies to avoid ambiguity in trade regulations.

4. The court acknowledged the confiscation of the first consignment by Customs authorities under the Customs Act, 1962, but allowed redemption upon payment of fines and penalties. The petitioner firm complied with the order, making it a precedent for the treatment of subsequent consignments. The court directed Customs authorities to consider releasing the later consignments after the firm submits the required documents within a week.

5. Regarding the applicability of the Electronics and IT Goods (Requirement for Compulsory Registration) Order (CRO), 2012, the court noted the absence of a specific notification requiring registration for MFD printers and photocopiers. The Customs authorities were instructed to evaluate the submitted documents in line with statutory regulations and the previous order, ensuring a lawful decision on the release of the withheld consignments. The writ petition was allowed accordingly, with pending petitions closed without costs.