Multifunction digital machines are not photocopiers; import restriction, confiscation and penalty were unsustainable.

Old and used digital multifunction print and copier machines with accessories were held not to fall within the restriction on second hand photocopier machines under para 2.17 of the Foreign Trade Policy. The goods were identified, on the product description and Chartered Engineer's report, as multifunctional devices capable of printing, copying, scanning, faxing and e-mailing, with storage and network connectivity. The policy restriction applied only to photocopier machines, and the HSN explanatory notes distinguished photocopiers from multifunction combinations. Applying the principle that such machines are classified by principal function and essential character, the imported goods were treated as multifunctional machines, so confiscation, redemption fine and penalty were unsustainable.

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Issues: Whether old and used digital multifunction print and copier machines with accessories and attachments were covered by the restriction on second hand photocopier machines under para 2.17 of the Foreign Trade Policy and therefore liable to confiscation, redemption fine and penalty.

Analysis: The imported goods were found, on the Chartered Engineer's report and the product description, to be digital multifunctional machines capable of performing more than one function such as printing, copying, scanning, faxing and e-mailing, with storage devices and network connectivity. The relevant policy provision restricted only second hand photocopier machines against licence, while the HSN explanatory notes distinguished photocopiers from multifunctional combinations of printers, copying machines and facsimile machines. The reasoning was also supported by the principle that multifunction machines are to be identified by their principal function and essential character, and the Supreme Court had recognised that such machines are not to be treated as mere photocopiers.

Conclusion: The imported multifunctional machines were not photocopier machines within the meaning of para 2.17 and their confiscation, redemption fine and penalty were unsustainable.

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