2021 (2) TMI 1109 - HC - Customs

Confiscation of imported goods - Old/Used Analogue Photocopiers and Old/Used Digital Multi functional (Print and Copying) Machines - restricted goods - appellant did not produce the license for import of the said machines - redetermination of value of the goods under Rule 9 of the Customs Valuation Determination of Price of Imported Goods Rules, 2007 - appraisal of value of goods - whether the finding rendered by the Tribunal holding that what was imported by the appellant was a restricted item was correct? - whether the reasons assigned by the Tribunal to confirm the order of the adjudicating authority calls for any interference? - HELD THAT - The appellant had imported 36 units of Old/Used Analogue Photocopiers without obtaining a license. Having accepted the stand taken by the Department, the appellant requested that his case may be adjudicated. All second hand goods except second hand capital goods are restricted for import. It is not in dispute that 201 machines which were imported by the appellant were second hand goods. Thus, going by the first limb of para 2.17, license is required. In the second para, the Policy allows import of second hand capital goods including refurbished/reconditioned spares without obtaining any license. There is a restriction for import of second hand Photocopier machines and other items mentioned therein. The appellant did not produce a Chartered Engineer's certificate when the goods were imported. Therefore, the goods were subjected to examination by Docks Officer in the presence of a Chartered Engineer and certified that the goods are 4 to 10 years old, they are used and not reconditioned and the value of the second hand goods was appraised as USD 69395 C F - The photocopying machines do not have any single entry in Tariff and copying machines whether or not combined with printers and facsimile machines are classified elsewhere as also machines which perform two or more functions of printing, copying or facsimile transmission as in the case of the imported goods. Further the Tribunal noted that DGFT notification No.31/2005 dated 19.10.2005 uses the expression photocopier machines and therefore, there is no warrant to read the expression appearing in the DGFT notification as conforming to any one particular expression used in the Tariff as these expressions are not identical and no Tariff item is mentioned in the DGFT notification. The Tribunal rightly rejected the case of the appellant - Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Sustenance of the Tribunal's order in light of a prior judgment by the High Court.
2. Tribunal's power and jurisdiction to hold a co-ordinate bench's decision as erroneous.
3. Interpretation of the term "photocopier machines" in the Foreign Trade Policy.

Issue-wise Detailed Analysis:

1. Sustenance of the Tribunal's Order:
The appellant challenged the Tribunal's order dated 02.03.2012, which was based on the adjudication of the import of "Old/Used Analogue Photocopiers and Old/Used Digital Multifunction (Print and Copying) Machines." The Tribunal upheld the adjudicating authority's decision that the imported goods were restricted items under para 2.17 of the Foreign Trade Policy (FTP) and required a license for import. The Tribunal's decision was based on the interpretation that the imported machines, despite being multifunctional, fell under the category of photocopiers, which are restricted for import without a license.

2. Tribunal's Power and Jurisdiction:
The appellant argued that the Tribunal erred in not following the decision of the co-ordinate bench or referring the matter to a larger bench. The Tribunal, however, provided reasons for not following the earlier decision, stating that the functionality of the imported machines matched that of photocopiers, thus falling under the restricted category. The Tribunal emphasized judicial discipline and consistency in its decision-making process.

3. Interpretation of the Term "Photocopier Machines":
The core issue was whether the imported digital multifunction machines could be classified as photocopiers under para 2.17 of the FTP. The Tribunal analyzed the functionality of both analog and digital photocopiers, concluding that the digital multifunction machines performed the same primary function of photocopying, with additional features like printing when connected to a computer. The Tribunal referred to various Customs Tariff Headings and determined that photocopiers are classified under multiple headings, supporting the view that the imported machines were indeed photocopiers and restricted for import without a license.

The Tribunal also rejected the appellant's reliance on the decision in Anand Impex, noting that it was rendered in a different context (provisional release of goods) and did not involve an adjudicatory process. The Tribunal's decision was further supported by the common parlance test and the functionality test, which confirmed that the imported machines were essentially photocopiers.

Conclusion:
The High Court upheld the Tribunal's decision, dismissing the appeal and confirming that the imported digital multifunction machines were restricted items under para 2.17 of the FTP, requiring a license for import. The substantial questions of law were answered against the appellant, and the Tribunal's interpretation and application of the relevant legal provisions were found to be correct and justified.