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TMI Blog2021 (9) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... 098/2021 C/S/40077/2021 SP Associates C. Cus.II No.1071-74/2020 dt. 30.12.2020 2. C/40099/2021 C/S/40078/2021 -do- -do- 3. C/40100/2021 C/S/40079/2021 -do- -do- 4. C/40101/2021 C/S/40080/2021 -do- -do- 5. C/40102/2021 C/S/40081/2021 Arihant Enterprises C. Cus.II No.1075- 77/2020 dt. 30.12.2020 6. C/40103/2021 C/S/40082/2021 -do- -do- 7. C/40104/2021 C/S/40083/2021 -do- -do- 8. C/40105/2021 C/S/40084/2021 Excel Copiers C. Cus.II No.8- 12/2021 dt. 19.01.2021 9. C/40106/2021 C/S/40085/2021 -do- -do- 10. C/40107/2021 C/S/40086/2021 -do- -do- 11. C/40108/2021 C/S/40089/2021 -do- -do- 12. C/40109/2021 C/S/40090/2021 -do- -do- 13. C/40110/2021 C/S/40091/2021 City Office Equipments C.Cus. No.II 1087- 1091/2020 dt. 31.12.2020 14. C/40111/2021 C/S/40092/2021 -do- -do- 15. C/40112/2021 C/S/40093/2021 -do- -do- 16. C/40113/2021 C/S/400942021 -do- -do- 17. C/40114/2021 C/S/40095/2021 -do- -do- 18. C/40115/2021 C/S/40096/2021 Photofax Sytems C. Cus.II No.1078-79/2020 dt. 30.12.2020 19. C/40116/2021 C/S/40 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Customs Act, 1962. The orders were reviewed by the Committee of Commissioners of Customs and appeals have been filed before this Tribunal along with stay applications. 3. At the outset, Ld. Counsel for the respondents raised a preliminary objection that the stay applications filed under Rule 41 of the CESTAT (Procedure) Rules, 1982 are not maintainable and that this Tribunal does not have the power to grant stay. Rule 41 of the Customs, Central Excise & Service Tax Appellate Tribunal (Procedure) Rules, 1982 it reads as under : "The Tribunal may make such orders or give such directions as may be necessary or expedient to give effect or in relation to its orders or to prevent abuse of its process or to secure the ends of justice." 4. It has been submitted by the Ld. Counsel for the respondents that this Rule can only be read as empowering the Tribunal to give effect to its own orders. It does not explicitly give the power to stay orders of any lower authority. It is his submission that these Rules have been framed under Section 129C of the Customs Act, 1962 which reads as follows : "129C. Procedure of Appellate Tribunal. - (1) The powers and function ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im on oath; (c) compelling the production of books of account and other documents; and (d) issuing commissions. (8) Any proceeding before the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purpose of section 196 of the Indian Penal Code (45 of 1860), and the Appellate Tribunal shall be deemed to be a Civil Court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974)." 5. It is his submission that Section 129C itself does not empower the Tribunal to stay the order of the lower authority. The only power of the Tribunal was with respect to stay of the requirement of predeposit under Section 129E of the Customs Act prior to 06.08.2014. After 06.08.2014, the amount of predeposit has been statutorily fixed and the Tribunal has no power to modify the amount of predeposit also. There is no other law under which the Tribunal can pass a stay order. 6. We have, at the outset, considered these submissions of the Ld. Counsel of the respondent. We find that Rule 41 of the CESTAT (Procedure) Rules, 1982 empowers the Tribunal to pass an orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31) and can be imported only against authorization from the DGFT and the importers had not produced such authorization. (v) The importers had deposited the goods in the warehouse pending clearance as per Section 49 of the Customs Act, 1962 which was allowed for a period of 30 days but importer had not applied for or obtained extension of the period to keep the goods in the warehouse. 9. Show cause notices were issued to the importers for violation of the provisions of FTP, Hazardous Waste Rules, E-Waste Rules and Bureau of Indian Standards Act, 1986, proposing confiscation of the goods under Section 111 (d) and 111 (m) of the Customs Act, 1962 and proposing imposition of penalty imposed upon the respondents under Section 112 (a) and Section 117 of the Customs Act, 1962. 10. Meanwhile, some of the importers had filed writ petitions before the Hon'ble High Court of Madras who directed the Customs authorities to conduct the adjudication proceedings of the consignments as per applicable statutory provisions and in accordance with law. Accordingly, the lower authority held personal hearings via video conference and respondents gave written submissions. The lower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 49 of the Customs Act, 1962 in the warehouse and had not sought permission to keep them in the warehouse beyond normal period of 30 days. (ii) The Commissioner (Appeals) has relied on the judgement of the Hon'ble Supreme Court in the case of S.L.P. No.17307/2019 in which by an order dt. 18.09.2020 it was held as follows : "Considering that the petitioners in the other special leave petitions have had their goods released pursuant to orders of this court, we allow these applications. The goods are to be released on the same terms as have been released in the other cases". The S.L.P is specific to each case and it cannot be followed in similar cases of other appellants and there is no binding effect on other parties. (iii) The Commissioner (Appeals) did not justify the reason for unconditional release of the goods in the absence of a DGFT decision on the subject matter under the provisions of Foreign Trade (Development & Regulations) Act, 1992 read with Foreign Trade Regulations, 1993 as directed by the Hon'ble High Court of Madras in its order dt. 10.09.2019 which the Apex court affirmed and the appellate Commissioner relied upon. The Commissioner (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest import of second hand multi-functional device without a license. In view of the above, Revenue prayed that Orders-in-Appeal may be set aside by the Tribunal and the Hon'ble Tribunal may pass any order as it may be deem fit. 14. Ld. Counsel for the respondents submits that the main contention of the Revenue is that import of MFDs requires a certificate of compulsory registration by BIS as per CRO 2012. Clause (3) of this order reads as under : "3. Prohibition regarding manufacture, storage, sale and distribution etc. of Goods - (1) No person shall by himself or through any person on his behalf manufacture or store for sale, import, sell or distribute Goods which do not conform to the Specified Standard and do not bear the words "Self declaration - Conforming to IS (Relevant Indian Standard mentioned in column (3) of the Schedule) on such Goods after obtaining Registration from the Bureau: 2. The sub-standard or defective Goods which do not conform to the Specified Standard mentioned in Column (3) of the Schedule shall be deformed beyond use by the manufacturer and disposed off as scrap." The order therefore applies to products indicated in the Sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gories including "Printers, Plotters" in the Electronics and IT Goods (Requirement of Compulsory Registration Order, 2012. (hereinafter called the Order) notified in the Gazette of India vide S.O.No.2357 (E) dated 03.10.2012. 2. In this regard, it is clarified that the Multi-Function Devices (MFDs), which are basically printers with additional features like photocopy, scan, Fax etc. and are covered in the category "Printers, Plotters" notified under the Order. 3. Other provisions of the aforesaid notification dated 03.10.2012 would apply as before." Another letter was issued by the Joint Secretary vide No.37(10)/ 2016-IPHW dated 10.03.2017 of the same Ministry reads as follows : "D.O.No.37 (6)/2016-IPHW Dated 06.12.2016 Dear Shri Srinivasa, Meity is executing the surveillance of registered manufacturers for goods notified under "Electronics and IT Goods (Requirement for Compulsory Registration) Order (CRO), 2012". It has come to our notice that second hand electronics products are being allowed to be imported/sold in Indian market without registration. 2. The CRO applies universally to all notified products after the date of coming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Goods under the "Electronics and Information Technology Goods (requirement of Compulsory Registration) Order, 2012, as amended from time to time, will be allowed subject to registration with the Bureau of Indian Standards (BIS), or on specific exemption letter from Ministry of Electronics and Information Technology (MeitY) for a particular consignment, as per provisions of Gazette Notification SO No.3022 dated 11.09.2013. Accordingly, import of unregistered/non-complaint notified products as in CRO,2012, as amended is "prohibited" Import consignments without valid registration with BIS shall be re- exported by the importer failing which Customs shall deform the goods and dispose them as scrap under intimation to MeitY (c) Import policy for Electronics and IT Goods: The import of Goods new as well as second hand, whether or not refurbished, repaired or reconditioned) notified under the Electronics and Information Technology Goods (Requirement of Compulsory Registration) Order, 2012, as amended from time to time, is prohibited unless they are registered with the Bureau of Indian Standards (BIS) and comply to the 'Labeling Requirements' published by BIS, as amended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; is "prohibited". 3. Effect of this Notification : Import Policy and Policy condition for import of Electronics and It Goods is laid down . This issues with the approval of Ministry of Commerce and Industry. Sd/- Alok Vardhan Chaturvedi) Director General of Foreign Trade & Ex Officio Addl. Secretary to the Government of India E-mail: dgft@ nic.in [issued from file No.01/89/180/39/AM-13/PC/2(A)/e 2261] Note: The principal notification No.36/2015-2020, dated the 17th January, 2017 was published in the Gazette of India, Extraordinary vide number S.O.172E, dated the 17th January, 2017 and amended vide notification NO.50/2015-2020, dated the 8th January,2019 was published in the Gazette of India, Extraordinary vide number .SO.128 (E) dated the 8th January 2019." It is his contention that even this notification of the DGFT only prohibits imports of goods which are covered by the CRO 2012. Since their products are not covered by CRO 2012, DGFT notification does not apply. Therefore, on merits, it may be held that their goods are not covered under CRO 2012 and therefore they are not liable for confiscation under Section 111 (d) of the Act as there was no provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31 of FTP ? (5) Was the value declared by the respondents in their Bill of Entry incorrect and whether the revaluation has been done by the Chartered Engineer correctly ? (6) Has the Ld. Commissioner (Appeals) correctly allowed redemption of the goods under Section 125 of the Customs Act for home consumption ? (7) Whether the reduction of penalty imposed under Section 112 (a) of the Customs Act, 1962, by Commissioner (Appeals) is correct and proper ? (8) Whether the Commissioner (Appeals) has correctly set aside penalty under Section 117 of Customs Act imposed upon the respondents for violation of Section 49 of the Customs Act, 1962. 19. We proceed to the decide the above issues. 20. The CRO order 2012 was notified vide S.O 8.(14)/2006-IPHW (Vol-III) and reads as follows : "In exercise of the powers conferred by section 10 (1) (p) of the Bureau of Indian Standards Act, 1986 (63 of 1986) and in pursuance of clause (fa) of rule 13 of the Bureau of Indian Standards Rules, 1987, the Central Government, after consulting the Bureau of Indian Standards, hereby makes the following Order, namely :- 1. Short title and commencement (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . ... f. .... (fa) formulate, implement and coordinate activities relating to registration for self declaration of conformity to the relevant Indian Standard on voluntary or compulsory basis, of articles as may be considered expedient in public interest and so notified through an order by the Central Government after consulting the Bureau." A perusal of the entire BIS Rules, 1987 also shows that just like BIS Act, 1987, BIS Rules 1987 did not provide for regulating or prohibiting import of goods. Therefore, CRO 2012 has, in clause (3), gone beyond the scope of the Act and the Rules in prescribing a standard for import of goods and in prohibiting import of goods which did not meet the standards. Therefore, it is doubtful, whether in the first place, whether the CRO 2012 is legally sustainable. 22. Be that as it may, even if it is ignored that CRO 2012 was issued beyond the scope of the parent Act and Rules, the Schedule to CRO 2012 covers only "printers and plotters" at Sl.No.7. It did not cover multi-functional devices. The case of the Revenue is that Ministry of Electronics & Information Technology has issued a circular No.1/2019 dt. 02.05.2019 clarifying that multi-fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; / Multi- Function Devices(MFD) Plotters/ IS 13252 : Part 1 : 2010 Information Technology Equipment - Safety - General Requirements This order was passed under the BIS Act, 2016 which replaced BIS Act, 1986. BIS Act, 2016 specifically provided for regulating imports Section 16 & 17 of the Act read as follows : ''16. (1) If the Central Government is of the opinion that it is necessary or expedient so to do in the public interest or for the protection of human, animal or plant health, safety of the environment, or prevention of unfair trade practices, or national security, it may, after consulting the Bureau, by an order published in the Official Gazette, notify- (a) goods or article of any scheduled industry, process, system or service; or (b) essential requirements to which such goods, article, process, system or service, which shall conform to a standard and direct the use of the Standard Mark under a licence or certificate of conformity as compulsory on such goods, article, process, system or service. Explanation.-For the purpose of this sub-section,- (i) the expression "scheduled industry" shall have the meaning assigned to it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e went beyond the scope of the Act and Rules and imposed controls over imports as well. (2) CRO 2012 covers only to 'printers and plotters' and not to ''MFDs''. The circular and the letters issued by the MeitY went beyond the scope of CRO 2012 and sought to apply them to MFDs also on the ground that they are also in the form of printers. (3) Customs Act, 1962 is both a fiscal statute and also a penal statute. Import of goods contrary to any prohibitions not only render such goods liable to confiscation under Section 111 of the Act, it amounts to smuggling [as per Section 2 (39) of the Act] and the persons involved will be liable to arrest [Section 104] and conviction [Section 135]. It is a well settled Rule of Interpretation that fiscal and penal statues must be strictly interpreted. Therefore, a prohibition / restriction cannot be imposed and goods confiscated based on letters / circulars of MeitY. If there is no explicit prohibition / restriction, nothing can be read into the entry in CRO 2012 so as to enlarge the scope of prohibition. Sections 111(d), (l) and (m) under which the goods were confiscated by the lower authorities are reproduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be interfered with. 26. The assertion of the Revenue is that Ld. Commissioner (Appeals) allowed redemption of the goods under Section 125 for home consumption and that the goods should have been ordered to be either re-exported, or destroyed as being sub-standard and defective goods under CRO clause (3) (2). It is also the assertion of the Revenue that the goods fall under 'hazardous waste' and are regulated by Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2008. We have considered these submissions. We have already held that CRO 2012 does not cover the impugned goods. Therefore, the question of mutilation of the goods under clause 3 (2) of CRO 2012 does not apply as there was no standard prescribed under the CRO for MFDs. The circulars and letters of the Ministry are at best executive opinions and they cannot take the place of law. We have also observed that the CRO itself has imposed restriction on imports going beyond the scope of BIS Act, 1986 and BIS Rules 1987 neither of which (unlike BIS Act, 2016) provided for prescribed standards or for regulating imports. Therefore, the question of mutilation of goods does not arise. In so far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f these Rules means "wastes specified in Part B and Part D of Schedule III for import or export". Schedule III, Part "D' does include at entry B1110 "Used multifunction print and copying machines (MFDs)***. The footnote "***" states "Import permitted in the country only to the actual users from Original Equipment Manufacturers (OEM) and subject to verification of documents specified in Schedule VIII of these Rules by the Customs Authority. 28. Even if used MFDs are listed as "other wastes" they must be "wastes" in the first place as per the very Rules. The impugned goods in these cases are not. They have further use and therefore cannot be called "waste". In fact, their value was enhanced by the Customs authorities. Revenue has placed emphasizes on Rule 15 of the Hazardous Waste Rules which reads as under : "15. Illegal traffic.- (1) The export and import of hazardous or other wastes from and into India, respectively shall be deemed illegal, if,- (i) it is without permission of the Central Government in accordance with these rules; or (ii) the permission has been obtained through falsification, mis- representation or fraud; or (iii) it does not conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Tariff". Through a series of judicial pronouncements, it is well settled that it is not sufficient for something to be listed in the Tariff to be excisable goods but they should be "goods" in the first place, i.e., they must be capable of being bought and sold in the market. Similarly, in this case while "other wastes" listed in the Schedule includes used MFDs, they must be "waste" and the impugned goods do not qualify as "waste" as per Rule 3 (38). Therefore, the requirement of re-export or destruction under Rule 15 does not apply to the impugned goods. Revenue has, in fact, increased the value of imported goods. Had they been a waste, value should have been Nil or something close to it. Therefore, they are useful goods with some residual life and cannot be called hazardous waste by any stretch of imagination. Therefore, the Hazardous Waste Rules do not apply to the impugned goods. 30. So far as the Foreign Trade Policy is concerned, it is true that import of Second Hand MFDs were restricted and required an authorization which the respondents did not have. Therefore, the confiscation of the goods under Section 111 (d) is valid. Having confiscated, the goods can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is not open to the Customs Authorities to blindly apply the directive of the Department of Electronics and Information Technology, Ministry of Communications and Information Technology, under the letter dated 06.12.2016, to the petitioner firm's goods." 32. As far as the penalty under Section 117 is concerned, it was imposed by the original authority for violation of provisions of Section 49. These two sections read as follows : "SECTION 117. Penalties for contravention, etc., not expressly mentioned. - Any person who contravenes any provision of this Act or abets any such contravention or who fails to comply with any provision of this Act with which it was his duty to comply, where no express penalty is elsewhere provided for such contravention or failure, shall be liable to a penalty not exceeding one lakh rupees". SECTION 49. Storage of imported goods in warehouse pending clearance or removal. - Where,-- (a) in the case of any imported goods, whether dutiable or not, entered for home consumption, the Assistant Commissioner of Customs or Deputy Commissioner of Customs is satisfied on the application of the importer that the goods cannot be cleared wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso to Section 49 which says that the provisions of Chapter IX do not apply to goods deposited under Section 49. Therefore, there is neither any obligation to do anything nor prohibition of any act under Section 49. Therefore, there cannot be any contravention under Section 49. It is only an enabling provision for the Assistant Commissioner and the Commissioner. Therefore, no penalty can be imposed under Section 117 for contravention of Section 49 and the Ld. Commissioner (Appeals) is correct in setting aside penalty under Section 117. 34. There is no dispute regarding reduction of penalty under Section 112 (a) by the Commissioner (Appeals) which we also find is fair and reasonable. 35. We have already discussed above that goods in question were not waste in the first place but are useful articles with residual life whose value has been enhanced by Customs authorities and therefore the provisions of Hazardous Waste Rules do not apply. In view of the above, we hold as under :- (1) Electronics & Information Technology Goods (Requirement for Compulsory Registration) Order 2012 has gone beyond the Act and Rules in imposing a restriction from imports. Even these ..... X X X X Extracts X X X X X X X X Extracts X X X X
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