Confiscation of Digital Multifunction Equipment due to Non-payment of Enhanced Customs Duty: Madras HC directs to Release Goods on payment of Duty [Read Order]

The Madras High Court directed the Commissioner of Customs to release the confiscated Digital Multifunction Equipment due to Non-payment of Enhanced Customs Duty. The court held that the goods can be released on payment of customs duty. M/s.Atul Commodities Private Limited, the petitioner filed the petition seeking the release of various models of second-hand Highly Specialised Equipment- digital Multifunction Print, Copying & Scanning Machines, imported by the petitioner. Mr.Sai Srujan Tayi, Senior Standing counsel takes notice on behalf of the respondents. By consent of the parties, the main writ petition is taken up for disposal at the admission stage itself. The counsel for the petitioner submitted that in the batch of the writ petition in W.P.No.29673 of 2022, etc., the Court had already dealt with a similar issue and passed the order dated 23.11.2023. Therefore, the counsel for the petitioner would submit that the said order will be squarely applicable to the present case also and hence, he requested the Court to pass a similar order. Per contra, the counsel for the respondent submitted that the previous batch of writ petitions were filed challenging the show cause notice. The respondents have issued no show-cause notice. Hence, he would submit that the said order will not apply to the present writ petitions. The respondents submitted that the petitioners have imported used copier machines and at the point of entry, the Customs Department required the petitioners to produce copies of authorization for import of such items with necessary approval of DGFT as per Foreign Trade Policy Guidelines and also to produce the Compulsory Registration Certificate of BIS as indicated by the Foreign Trade Policy of Government of India. The Customs Authority is only a Nodal Agency to streamline and permit import and export based on policy guidelines issued to them. Multi-functional printers are classified as printers and plotters. Regarding used goods imports, there are guidelines of DGFT, which envisage compulsory registration and approval of DGFT. The Multi-Functional Devices would fall under the category of printers and plotters only as clarified by MEITY. Further, the Foreign Manufacturers Certification Scheme has to be complied with for import. In view of multiple writ petitions filed against the Customs Department the petitioners are misinterpreting the single aspect of weightage and other requirements required for highly specialized equipment are trying into the classification challenge. Since the importers are not complying with the DGFT guidelines and the Compulsory Registration Orders applicable the said import would be treated as -prohibited- as compliance is not made by importers. Submitting as above, learned counsel prays for the dismissal of the present writ petitions. The central issue to be decided in the present case is whether the materials imported by the petitioners fall under Clause 2.31 of the Foreign Trade Policy 2023 effective from 01.04.2023 under the category of second-hand goods. In Notification No.5/2015 2020, dated 07.05.2019, only two clauses are available viz., (a) and (b), but, in the case of Foreign Trade Policy 2023, there are four clauses under Sl.No.I. The Court is of the considered view that as per Foreign Trade Policy, 2023, the petitioners- goods would not fall under category I(b). Still, they fall under the category I(d) which indicates that other than goods mentioned in I(a), I(b), I(c), all other secondhand capital goods can be imported freely without any restriction. Therefore, if the petitioners do not fall under clause I(b) automatically they fall under I(d). The Supreme Court has taken note of the said fact and stayed the confiscation of goods in a similar matter. Further, this Court, on a comparison of Notification No.5/2015~2020, dated 07.05.2019 and Foreign Trade Policy 2023, does not find any new changes brought in so that prohibited multi-function devices should get authorization from DGFT. A single bench of Justice Krishnan Ramasamy directed the respondents to consider the plea of the petitioners to release the goods by way of provisional release on the condition that, the petitioner shall pay/deposit the enhanced duty amount. On receipt of such enhanced duty amount paid by the petitioners, the goods in question shall be released within three (3) weeks. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

Confiscation of Digital Multifunction Equipment due to Non-payment of Enhanced Customs Duty: Madras HC directs to Release Goods on payment of Duty [Read Order]

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