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2019 (5) TMI 169 - HC - CustomsImport of restricted item - Old and Used Digital Multifunction Print and Copying Machines - requirement of production of authorisation/import licence issued by the DGFT authorities or any other notification or clarification issued by the DGFT - HELD THAT - The goods imported by the respondent/writ petitioner are second hand machinery. In terms of the policy guidelines issued by the DGFT, authorisation/import licence ought to have been obtained, as the goods are restricted for import in terms of Para 2.31 of the Foreign Trade Policy 2015-20. The respondent/writ petitioner was fully aware of the fact and that an import licence and appropriate BIS clearance certificate under the relevant order is a prerequisite and having been well acquainted with the legal position, they have applied for grant of such licence which was either rejected or not entertained or kept pending without orders. In such a factual position, we would be fully justified in holding that the appellant can insist upon orders for provisional release of the imported goods by raising a plea that the provisions of the Foreign Trade Policy and the various notification and orders are not sustainable or inapplicable to the goods imported by them. Whether Section 110A of the Customs Act could be invoked by the respondent/writ petitioner? - HELD THAT - Prerequisite for Section 110A to be attracted is seizure of the goods under Section 110 and in terms of sub-Section (1) of Section 110, if the proper officer has reason to believe that any goods are liable to confiscation under the Customs Act, he may seize such goods. Admittedly, till date, the goods have not been seized. The respondents do not dispute the said factual position. This is more so because, the goods have been warehoused in terms of Section 49 of the Act - Proviso to Section 49 states that the Principal Commissioner of Customs or Commissioner of Customs may extend the period of storage for a further period not exceeding thirty days at a time. This warehousing is done on the application made by the respondents/importer requesting time for production of requisite documents and the Assistant Commissioner of Customs being satisfied that the goods cannot be cleared within the reasonable time, pending clearance, has permitted the goods to be stored in a warehouse. Thus, in the absence of seizure, the provision of Section 110A would be inapplicable. The respondent would not be entitled to make a prayer for provisional clearance, as there is non compliance of the vital requirement regarding BIS certificate as required under Electronics and Information Technology Goods (Requirements for Compulsory Registration) Order 2012 dated 07.09.2012 and subsequent orders dated 25.06.2013 and 07.11.2014 issued by MeitY. Appeal allowed - decided in favor of Revenue.
Issues Involved:
1. Requirement of authorization/import license for importing second-hand machinery. 2. Compliance with BIS certification under Electronics and Information Technology Goods (Requirements for Compulsory Registration) Order 2012. 3. Compliance with procedures under Hazardous and other Wastes (Management & Transboundary Movement) Rules, 2016 and E-Waste Management Rules, 2016. 4. Applicability of Section 110A of the Customs Act for provisional release of goods. 5. Comparison with the decision in the case of Commissioner of Customs vs. Athul Automations Private Limited. Detailed Analysis: 1. Requirement of Authorization/Import License: The respondent imported second-hand MPCMs which are restricted under Para 2.31 of the Foreign Trade Policy 2015-20, necessitating an authorization/import license from DGFT. The respondent failed to produce this authorization. The court noted that the respondent was aware of the need for such a license, as evidenced by their application for it, which was rejected by MeitY. The court emphasized that the importers must comply with all three independent conditions (authorization/import license, BIS certification, and compliance with waste management rules) for the clearance of goods. 2. Compliance with BIS Certification: The respondent did not produce the required BIS certificate under the Electronics and Information Technology Goods (Requirements for Compulsory Registration) Order 2012 and subsequent orders. The court highlighted that the BIS certification is a mandatory requirement and cannot be overlooked. The respondent's argument that the subject machines are not notified in the MeitY order was not accepted, as the customs authorities insisted on compliance with the BIS certification. 3. Compliance with Waste Management Rules: The respondent complied with the procedures under the Hazardous and other Wastes (Management & Transboundary Movement) Rules, 2016, and E-Waste Management Rules, 2016. However, this alone was insufficient as the other two conditions (authorization/import license and BIS certification) were not met. The court acknowledged the partial compliance but reiterated the necessity of fulfilling all three conditions for the clearance of goods. 4. Applicability of Section 110A of the Customs Act: The respondent sought provisional clearance of goods under Section 110A of the Customs Act. The court clarified that Section 110A applies to goods seized under Section 110, which was not the case here, as the goods were warehoused under Section 49 at the respondent's request. The court rejected the argument that detention of goods without a formal seizure order could invoke Section 110A, distinguishing the facts from the case of E.S.I. Ltd. vs. Union of India, where the goods were detained and sealed by customs officers. 5. Comparison with Commissioner of Customs vs. Athul Automations Private Limited: The court examined the applicability of the Supreme Court's decision in Athul Automations Private Limited, where the importers were allowed to redeem restricted goods upon payment of market value and fine. The court noted that the decision arose from an adjudicatory process, unlike the present case where the goods were warehoused, and the respondent sought provisional clearance without fulfilling all conditions. The court found the facts distinguishable, particularly the non-compliance with the BIS certification, which was not an issue in Athul Automations. Conclusion: The court set aside the order passed in the writ petitions, emphasizing that the respondent must comply with all three conditions for the clearance of imported second-hand machinery. The court directed the appellants to commence the adjudication process and issue a show cause notice to the respondents, allowing them to submit their reply and affording an opportunity for a personal hearing. The writ appeals were allowed, and the connected miscellaneous petitions were closed.
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