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2017 (10) TMI 812 - AT - CustomsEligibility of the importer to clear the goods for home consumption as a trader - e-waste - import of used Multifunction Digital Photocopiers and Printers - violation of Foreign Trade (Development and Regulations) Act, 1992, Foreign Trade Policy 2015-2020 and Pollution Control Regulations applicable to e-waste - absolute confiscation - Held that - the products under import are MFDs having use as digital multifunctional devices as intended. It is not clear as to how when the product imported in the form of whole machine and having certified functional life of 5/7 years, the same can be considered as waste. Even if the items imported require certain reconditioning, repair, it will not make the product as waste - It is specifically mentioned that the items imported are in full form and fit for use for printing A3 size papers and they are capable of being put to productive use and the machines were not in a damaged condition to such an extent which will compromise their functionaility. The residual life of these machines has been certified. In the face of these technical opinions and facts as recorded, the imported items cannot be considered as waste. The importation of the impugned goods is in violation of Import Policy of the relevant time and also of some of the conditions of Hazardous Waste Rules 2016. The violation of Hazardous Waste Rules is with reference to country of origin certificate. Other conditions mentioned therein have substantially been fulfilled. Penalty - whether such violations will result in refusal to release the goods on redemption in terms of Section 125 of Customs Act, 1962? - Held that - Admittedly, the goods are restricted and there are violations of Policy - while confiscation of the imported items cannot be faulted with, we note that the appellants are entitled for release of the goods on payment of appropriate redemption fine - a redemption fine of ₹ 52 lakhs and ₹ 14 lakhs for consignments imported by M/s. Atul Automation Pvt. Ltd. and M/s. Parag Domestic Appliances, respectively can be imposed. Penalty u/s 114AA on both the importers as well as Director of one of the importer - Held that - the provisions of Section 114AA will apply in cases where a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular - there is no situation of any false document submitted by the importer or by the Director of the importer. As such, the application of provisions of Section 114AA is not fully justified by the impugned order and accordingly, the penalties imposed u/s 114AA set aside. Appeal allowed in part.
Issues Involved
1. Violation of Import Policy and Hazardous Waste Rules, 2016. 2. Confiscation and redemption of imported goods. 3. Imposition of penalties under Sections 112(a) and 114AA of the Customs Act, 1962. Detailed Analysis 1. Violation of Import Policy and Hazardous Waste Rules, 2016 The case revolves around the importation of used Multifunction Digital Photocopiers and Printers (MFDs) by the appellants, which were allegedly in violation of the Foreign Trade (Development and Regulations) Act, 1992 (FTDR Act), Foreign Trade Policy 2015-2020, and Pollution Control Regulations applicable to e-waste. The Customs authorities held that the imported goods were old and used MFDs, thereby violating the FTDR Act and Rule 15(1)(2) of the Hazardous and Other Wastes (Management and Transboundary) Rules, 2016. The appellants argued that the imported MFDs were functional and had a residual life of at least 7 years, as certified by Chartered Engineers. They contended that the goods did not qualify as e-waste and that they had complied with the necessary import policy conditions and Hazardous Waste Rules. 2. Confiscation and Redemption of Imported Goods The original authority ordered the confiscation of the imported goods but allowed their redemption on payment of fines for re-export only. The appellants argued that the goods should be allowed for home consumption upon payment of redemption fines, citing past practices and case laws. The Tribunal noted that while the goods were restricted and there were violations of the Import Policy, they were not expressly prohibited. Therefore, the appellants were entitled to the release of the goods on payment of appropriate redemption fines. The Tribunal reduced the redemption fines to ?52 lakhs for M/s. Atul Automation Pvt. Ltd. and ?14 lakhs for M/s. Parag Domestic Appliances, considering the detention and demurrage charges incurred. 3. Imposition of Penalties under Sections 112(a) and 114AA of the Customs Act, 1962 The original authority imposed penalties under Sections 112(a) and 114AA of the Customs Act, 1962. The appellants contested the penalties under Section 114AA, arguing that there was no false or incorrect document submitted knowingly or intentionally. The Tribunal agreed and set aside the penalties under Section 114AA. However, the penalties under Section 112(a) were upheld but reduced. The penalties were reduced to ?25 lakhs for M/s. Atul Automation Pvt. Ltd., ?5 lakhs for Shri Ketan Kamdar, and ?7 lakhs for M/s. Parag Domestic Appliances, considering the consistent practice of imposing penalties of 5% of the assessable value in similar cases. Conclusion The Tribunal concluded that while the confiscation of the imported items was justified, the appellants were entitled to the release of the goods on payment of reduced redemption fines. The penalties under Section 114AA were set aside, and the penalties under Section 112(a) were reduced. The appeals were disposed of accordingly.
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