2019 (5) TMI 397 - AT - Customs

Import of prohibited goods - Multi-function Digital Photocopiers and Printers - violation of Foreign Trade (Development and Regulation) Act, 1992 - HELD THAT - Admittedly, the importers are not in possession of any authorization / licence issued by the DGFT for import of such goods. As such, the goods are liable for confiscation in terms of Section 111(d) as has been held by the lower authorities. But it is seen that the original authority has ordered for absolute confiscation of these goods without extending option to the importers to redeem the goods on payment of redemption fine and penalties. Having concluded that the imported goods are liable for confiscation but ordering absolute confiscation is not justified, we are left with the task of deciding what would be the appropriate redemption fine and penalty to be imposed on the importers. We adopt the same yardstick in arriving at the redemption fine and penalty and order that imported goods may be allowed for clearance on payment of redemption at 10% and penalty 5% of the re-assessed value, besides payment of applicable Customs duty. Imposition of penalty under Section 114AA of FA - HELD THAT - The proprietor is not different from the proprietory firm. Since the importing firm already stands penalized under Section 112(a) of the Act, we find no requirement to impose separate penalty on the proprietor under Section 114AA. Hence, penalties imposed on the proprietors are set aside. Appeal disposed off.

Issues Involved:

1. Confiscation of imported used Multi-function Digital Photocopiers and Printers (MFDs) as "prohibited" goods.
2. Imposition of penalties under Section 112(a) and Section 114AA of the Customs Act, 1962.
3. Violation of Foreign Trade Policy and Hazardous Waste Rules, 2016.
4. Violation of Electronics and Information Technology Goods (Requirement of Compulsory Registration) Order, 2012 (CRO).
5. Waiver of demurrage charges.

Detailed Analysis:

1. Confiscation of Imported MFDs as "Prohibited" Goods:

The primary issue relates to the importation of used MFDs, which the adjudicating authority deemed as "prohibited" goods, leading to their absolute confiscation without an option for redemption. The Tribunal referenced a similar case (Parag Domestic Appliances) where it was determined that such goods should be classified as "restricted" rather than "prohibited." The Tribunal concluded that absolute confiscation was not justified and allowed the release of goods on payment of redemption fine and penalties.

2. Imposition of Penalties under Section 112(a) and Section 114AA:

Penalties were imposed on importers under Section 112(a) for violating various provisions of the Customs Act. Additionally, penalties were imposed on the proprietors of importing firms under Section 114AA. The Tribunal found no justification for separate penalties on proprietors since the firms themselves were penalized. Consequently, penalties under Section 114AA were set aside.

3. Violation of Foreign Trade Policy and Hazardous Waste Rules, 2016:

The Tribunal acknowledged that the importers did not possess the necessary authorization/license from the DGFT, rendering the imports liable for confiscation under Section 111(d). Despite this, the Tribunal noted that the imported MFDs, having a certified residual life, could not be considered as "waste." Although there were violations concerning the country of origin certificate under Hazardous Waste Rules, other conditions were substantially fulfilled. The Tribunal held that these violations did not warrant absolute confiscation.

4. Violation of Electronics and Information Technology Goods (Requirement of Compulsory Registration) Order, 2012 (CRO):

The adjudicating authority cited violations of the CRO, which mandates compulsory registration for certain notified goods. The Tribunal, referencing the Andhra Pradesh & Telangana High Court's decision, concluded that MFDs were not listed under the CRO. Therefore, the importers could not be held to have violated the provisions of the Compulsory Registration Order.

5. Waiver of Demurrage Charges:

The Tribunal addressed the appellants' request for waiver of demurrage charges, which accrued due to the confiscation order. It directed the jurisdictional Commissioner of Customs to consider this request under Rule 6(l) of the Handling of Cargo in Customs Area Rules, 2009.

Conclusion:

The Tribunal allowed the appeals, setting aside absolute confiscation and ordering the release of the imported goods on payment of redemption fine (10% of reassessed value) and penalty (5% of reassessed value), along with applicable customs duty. Penalties on proprietors were set aside, and the request for waiver of demurrage charges was referred to the jurisdictional Commissioner of Customs for consideration.

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