Madras HC Orders Conditional Provisional Release of Copying Machines in which Bill of Lading raised before DGFT Restriction Notification [Read Notification]

The Madras High Court has ordered the provisional release of secondhand digital multifunction print, copying, and scanning machines which import process already initiated by the petitioners before a restriction notification was issued by the Directorate General of Foreign Trade ( DGFT ).

The machines, shipped prior to the DGFT’s Notification No.13/2024-25 dated May 20, 2024, were prohibited under the new regulation, leading the petitioners to file a writ petition seeking relief.

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The Notification No.13/2024-25 restricted the imports of all electronics and IT goods notified under the Electronics and Goods (Requirements Compulsory of Registration) Order, 2021 as amended from time to time with conditions. The two conditions set by the directorate on import of these items were:

1. Importable against a restricted import authorization, subject to conditions laid down under Electronics and IT Goods (Requirements of Compulsory Registration) Order, 2021 (as amended from time to time).
2. Import of unregistered/non-compliant notified products as in Electronics and IT Good (Requirements of Compulsory Registration) Order, 2021 (as amended from time to time) is “Prohibited”.

The petitioners argued that the date of import should be based on the Bill of Lading, which was issued well before the DGFT’s notification. The bills of lading for the imported machines, dated between April 15 and April 29, 2024, predated the restrictive notification.

Referring to the DGFT Handbook of Procedures, the petitioners stated that the relevant date for determining import legality should be the date of shipment rather than the date of arrival at an Indian port.

The high court acknowledged that in the present batch of cases, the bills of lading were issued before the impugned notification, and thus, the restrictions imposed by the notification should not apply. It relied on its earlier ruling in the case of M/s. Atul Commodities Private Limited vs. The Commissioner of Customs (Chennai II), dated December 18, 2023, passed a similar order in this case.

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The bench of Justice Krishnan Ramasamy directed the Customs Department to provisionally release the goods on the condition that the petitioners deposit the enhanced duty amount. Once the duty is paid, the customs department was directed to release the  machines within three weeks.

Additionally, the court clarified that the Customs Department can proceed with further legal adjudication. Furthermore, the court also allowed the petitioners to file for a waiver of demurrage charges, which would be considered by the Customs Department based on the circumstances.

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