9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2009 (2) TMI 18 - SC - CustomsWhether Photocopiers were freely importable or required a licence SCN issued alleging that Used Photocopying Machines were restricted items for import under para 2.17 of the FTP 2004-09 r.w. circular No. 20/05 LB of tribunal concluded that Used Photocopier Machines are capital goods - hence, import of old & used photocopying machines stands covered by the concept of second-hand capital goods impugned judgment of HC is set aside & decision of the Larger Bench of the Tribunal is restored
Issues Involved:
1. Whether Photocopying Machines (Photocopiers) were "freely importable" or required a licence/permission/certificate during the relevant period. Detailed Analysis: Facts: The appellant imported photocopying machines in January 2005 under the category "general imports." A show cause notice was issued by the Dy. CoC (Import) alleging that the used photocopying machines were restricted items for import under para 2.17 of the current FTP 2004-09 read with circular No. 20 dated 23.2.2005 issued by DGFT. The adjudicating authority confirmed the show cause notice, leading to an appeal to the Tribunal, which ruled in favor of the appellant. The High Court reversed this decision, leading to the current appeal. Judgment of the Larger Bench of the Tribunal: The Larger Bench of CESTAT had concluded that used photocopying machines are capital goods. It held that the circulars 16/03, 19/03, and 20/05 issued by DGFT were applicable only to imports under the EPCG Scheme and not to general imports. This decision was overruled by the High Court, prompting the current appeal. Contentions: - Appellant's Argument: The appellant argued that the imports in question were general imports and not under the EPCG or other specific schemes. They contended that DGFT circulars were clarificatory and not amendatory, and that only the Central Government had the power to amend the policy under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992. They emphasized that the DGFT circulars did not apply to general imports and that the High Court erred in applying these circulars to conclude that a licence was required for the import of photocopying machines. - Revenue's Argument: The Revenue argued that second-hand goods, other than second-hand capital goods, were restricted for import under the FTP 2004-09 and required a licence. They relied on circular no. 20 dated 23.2.2005, which stated that second-hand photocopying machines were restricted and required a licence for import. Interpretation of Policy Circular Nos. 16/03, 19/03, and 20/05: The Supreme Court noted the distinction between amendment and clarification under the 1992 Act. The power to amend the FTP is vested exclusively in the Central Government, whereas the DGFT can issue clarifications. The Court observed that the Notification No. 31 dated 19.10.2005, which restricted the import of second-hand photocopying machines, was an amendment and applied only from that date. The earlier DGFT circulars were clarificatory and did not have the power to change the categorization of items from "free" to "restricted." Interpretation of Circular No. 20 dated 23.2.2005: The Court found that Policy circular No. 20/05 was in continuation of Policy circular Nos. 16/03 and 19/03, which pertained to the FTP 2002-07 and not the FTP 2004-09. The FTP 2004-09 allowed the free import of second-hand capital goods, including photocopying machines, under para 2.17. The Court agreed with the Tribunal that photocopying machines are capital goods, particularly in view of their definition in para 9.12 of the FTP 2004-09. Conclusion: The Supreme Court set aside the High Court's judgment and restored the decision of the Larger Bench of the Tribunal, allowing the civil appeal filed by the assessee. The Court held that the import of second-hand photocopying machines was freely allowed under the FTP 2004-09 and did not require a licence. The civil appeals filed by the Department were dismissed. Final Orders: - The judgment of the High Court was set aside. - The decision of the Larger Bench of the Tribunal was restored. - The civil appeal filed by the assessee was allowed with no order as to costs. - The civil appeals filed by the Department were dismissed with no order as to costs.
|
