2021 (3) TMI 696 - HC - Customs

Seeking direction upon the appellants herein to forthwith release of 136 units of old and used multifunction print, copying and scanning machines - classification of printers - covered under CTH and ITC HS Code No.8443 32 10 to 8443 32 50 and 8471 60 24 or not - HELD THAT - The non-compliance of the CRO may lead to serious consequences. However, we do not wish to express anything in this regard because the learned Single Bench was not inclined to touch upon the merits of the matter but proceeded to grant release based on various orders passed by the High Courts and Hon'ble Supreme Court - the orders of provisional release cannot be pressed into service by the respondent/writ petitioner, more particularly, after the issuance of the notification dated 01.04.2020 and this is of utmost relevance because the bills of entry in almost all the cases have been filed post 01.04.2020. Even if certain bills of entry have been filed prior to notification, the law prevailing on the date of examination for considering the release of goods would have to be made applicable and if so, the notification S.O.1236(E) dated 01.04.2020 needs to be applied. In the light of the above reasoning, we are of the considered view that the stand taken by the Department was fully justified. On perusal of the application filed by the respondent/writ petitioner dated 09.06.2020, it is found that the application is not a simple application for provisional release but in fact it covers most of the grounds which have been raised in the writ petition. It is rather surprising that an application for provisional release would contain such details without even the Department calling upon the respondent importer to furnish details or to give explanation. The orders of provisional release passed pursuant to the directions issued by the Writ Court being interlocutory in nature cannot be considered as a precedent - Merely by stating that identical imports were allowed to be provisionally cleared can be no reason to permit the respondent to clear the goods by way of issuance of a writ of Mandamus. This is more so in the instant case, because the matter is being considered after the notification in CRO dated 01.04.2020 which has made the items as prohibited items. Admittedly, none of the statutory notifications or amendments are put to challenge before this Court and we do not accede to the argument that the respondent need not challenge the provisions of the statutory notification as according to them, MFDs are not printers. The appellant, Customs Department is directed to consider the applications filed by the respondent/writ petitioners for provisional release and pass orders on merits and in accordance with law within a period of four weeks from the date of receipt of a copy of this judgment - petition dismissed.

Issues Involved:

1. Provisional release of imported goods.
2. Compliance with statutory requirements and notifications.
3. Classification of imported goods.
4. Maintainability of the writ petition.
5. Non-joinder of necessary parties.

Detailed Analysis:

1. Provisional Release of Imported Goods:
The petitioners sought the release of 136 units of old and used multifunction print, copying, and scanning machines upon payment of applicable customs duty. The High Court observed that provisional release orders are interlocutory and do not adjudicate liability. The Court cited precedents where provisional release was not considered a precedent, emphasizing the discretionary nature of such orders under Section 110A of the Customs Act.

2. Compliance with Statutory Requirements and Notifications:
The Customs Department argued that the import of second-hand MFDs is regulated under various statutory provisions, including:
- Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016.
- E-Waste Management Rules, 2016.
- Foreign Trade Policy (FTP) 2015-20.
- Electronics and Information Technology Goods (Requirements for Compulsory Registration) Order, 2012 (CRO).

The Department emphasized that BIS registration is mandatory for the import of MFDs, as clarified by MeitY through notifications and circulars. The High Court noted that the goods must conform to specified standards and bear the words “Self declaration – Conforming to IS” after obtaining registration from the Bureau.

3. Classification of Imported Goods:
The petitioners contended that MFDs are not classified as printers and therefore do not require BIS registration. The Customs Department and MeitY clarified that MFDs are considered printers with additional features and are covered under the category of Printers/Plotters as per the notification dated 01.04.2020. The High Court upheld this classification, stating that the Department has consistently treated MFDs as printers, and the clarification issued by MeitY was valid.

4. Maintainability of the Writ Petition:
The Customs Department argued that the writ petition was premature and not maintainable due to the non-joinder of MeitY, the nodal authority. The High Court agreed, stating that the writ petition should have been dismissed on these grounds. The Court emphasized that the proper recourse was to approach the Department for provisional release under the Act and undergo the adjudication process.

5. Non-joinder of Necessary Parties:
The High Court noted that MeitY, being the nodal authority, was a necessary party to the writ petition. The Customs Department, as the implementing authority, could not supersede or overreach the notifications issued by MeitY. The Court held that the writ petition was liable to be dismissed for non-joinder of MeitY.

Conclusion:
The High Court allowed the appeals, set aside the order passed in the writ petitions, and directed the Customs Department to consider the applications for provisional release on merits within four weeks. The Court emphasized the importance of complying with statutory requirements and the necessity of including all relevant parties in the litigation.

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