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TMI Blog2019 (5) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... ea 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... system as they being second hand / used machinery. The goods were examined in the presence of the Chartered Engineer approved by the Director General of Foreign Trade (DGFT) and the reports were forwarded. The report stated that no major repairing or reconditioning was noticed by the Chartered Engineer who also confirmed that the goods are not e-wastes and non-hazardous. The Department took a stand that the import of the second hand machines are allowed for clearance subject to fulfilment of the following three conditions:- (i) Production of authorisation/import license issued by the DGFT authorities since the subject goods are restricted under para 2.31 of FTP 2015-20. (ii) Registration under the provisions of Requirements for Compulsory Registration with BIS as per the 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. (iii) Compliance of procedures as per the provisions of Hazardous and other Wastes (Management Transboundary Movement) Rules, 2016 E-Waste Management Rules, 2016. The appellant/Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The respondent relied upon the decision of the High Court of Andhra Pradesh in W.P.No.2728 of 2018 dated 06.04.2018. The representation dated 06.07.2018 was received by the appellant/Department on 17.07.2018. Immediately thereafter, on 27.07.2018, the respondent filed the writ petition for the aforementioned relief. In the writ petition, the Customs Department (appellants) alone were impleaded as respondents and the authorities of DGFT and MeitY were not made party respondents. The prayer sought for was resisted by the appellant/Department that the three conditions mentioned above have to be independently fulfilled for clearance of the goods and admittedly, the respondent/writ petitioner did not fulfil two of the three conditions and therefore, they are not entitled for clearance of the goods. 6. It was argued that the appellants having warehoused the goods on their own volition in terms of Section 49 of the Customs Act, Section 110 of the Act cannot be invoked. The learned Single Bench by the impugned order directed the appellants to release the consignments of MPCMs in cases where there is no challenge to the policy guidelines, upon the respondents furnishing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the respondent complied with the procedures as per the provisions of Hazardous and other Wastes (Management Transboundary Movement) Rules, 2016 and E-Waste Management Rules, 2016 to certain extent. We take it that, there has been fulfilment of one of the three conditions, yet the respondent/importer has not fulfilled two of the conditions, viz., authorisation/import licence and BIS certificate as required under the 2012 order dated 07.09.2012 and subsequent orders dated 25.06.2013 and 07.11.2014 issued by MeitY. 11. Before us, the respondent do not dispute the fact that they do not have authorisation/import licence, but the fact remains that the respondent/writ petitioner had applied for such licence and in most of the cases, the licence so requested has been rejected by MeitY. The particulars in this regard have been furnished by the authorities of DGFT in the form of a tabulated statement and by way of illustration, we take the case of the respondent in W.A.No.1215 of 2019, viz., M/s.City Office Equipment, which had filed the bill of entry on 15.06.2018. The information produced before us shows that their application for grant of import licence was rejected as not re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 13. Section 49 of the Act states that where in the case of any imported goods, whether dutiable or not, entered for home consumption, the custom authorities is satisfied on the application of the importer that the goods cannot be cleared within a reasonable time, the goods may, pending clearance, be permitted to be stored for a period not exceeding thirty days in a public warehouse or in a private warehouse if facilities for deposit in a public warehouse are not available, but such goods shall not be deemed to be warehoused goods for the purposes of Customs Act and accordingly, the provisions of Chapter IX (warehousing) shall not apply to such goods. Proviso to Section 49 states that the Principal Commissioner of Customs or Commissioner of Customs may extend the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s initially detained went out of the hands of the importer, after the rooms in which the goods have been kept were sealed by the customs officers and it would tantamount to seizure for all practical purposes. In the cases on hand, there is nothing placed on record by the respondent/importer that there is a prohibitory order prohibiting them from seeking clearance of the goods. The stand of the Department is that three conditions have to be fulfilled by the importer individually and independently and they had fulfilled only one of the three conditions and the remaining two are yet to be fulfilled and it is the respondent/writ petitioner, who had requested time and based on such request, warehousing was permitted. Thus, in our considered view, the decision in the case of E.S.I. Ltd. (supra) is clearly distinguishable on facts. 18. The learned Single Bench had disposed of the the writ petitions by directing clearance of the goods subject to the condition that the importer furnishes a bond for 90% of the enhanced valuation and the remaining 10% by way of security to mean that the security should be way of bank guarantee. This direction was in terms of the decision of the Hon&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Revenue preferred appeal to the High Court which held that the MFDs correctly fell in the category of other wastes under Rule 3(1)(23) of the Hazardous and other Wastes (Management Transboundary Movement) Rules, 2016 read with Part B and Part D of Schedule II Item B1110 dealing with used MultiFunction Printer and Copying Machines. Further, the High Court held that MFDs were not prohibited but restricted items for import. The order for release of the goods was upheld subject to execution of a simple bond without sureties for 90% of the enhanced assessed value with further liberty to the DGFT along with directions. The Revenue argued before the Hon'ble Supreme Court to sustain the order of the adjudicating authority and contended that the goods were rightly permitted to be cleared for re-export. The importers sought to sustain the order and direction issued by the High Court. 21. It was argued that the consignment was not prohibited, but a restricted item. Section 125 of the Act vests discretion in the authority to levy fine in lieu of confiscation and the Department has in the past permitted release of MFDs on levy of redemption fine and the discriminatory trea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Central Pollution Control Board before the goods have been cleared. Ultimately, the Hon'ble Supreme Court held that in the statutory scheme of the Foreign Trade Act as discussed in the judgment, there is no error in the penultimate direction to the importers for deposit of bond without sureties for 90% of the enhanced valuation of the goods leaving it to the DGFT to decide whether confiscation needs to be ordered or release to be granted on redemption at market value in which event, the respondents therein shall be entitled to set off. 24. As discussed in the earlier part of this judgment, there are three conditions to be fulfilled by an importer of which it was found that the respondent/writ petitioner has complied with only one of the conditions viz, with regard to the compliance of procedures as per the provisions of Hazardous and other Wastes (Management Transboundary Movement) Rules, 2016 and E-Waste Management Rules, 2016. In the case of Athul Automations Private Limited (supra), two things which were put against those importers were non compliance of the conditions in the Foreign Trade Policy, that is, in not obtaining prior authorisation/licence and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent cannot risile from complying with the conditions which have been imposed under the notification and orders which have been issued in public interest. As pointed out by the Hon'ble Supreme Court that merely because a few consignments have been permitted to be cleared in different ports can have no bearing on the case on hand, as each case has to be decided on its own facts. The learned Single Bench had directed furnishing of bond for 90% of the enhanced valuation of the goods and security for the remaining 10%. To be noted that the stage is yet to come for arriving at a valuation as the case is yet to be adjudicated and even much prior to that, the respondent have rushed to this Court and filed writ petitions, after on their own volition warehoused the goods in terms of Section 49 of the Act. 28. In the light of the above discussion, we are of the clear view that the order passed in the writ petitions calls for interference. 29. In the result, the writ appeals are allowed and the order passed in the writ petitions is set aside. The facts clearly disclose that the respondents would not be in a position to either produce authorisation or licence from th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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