Court confirms release of imported digital machines; clarifies import policy not retroactive.

The Commissioner of Customs, Custom House Versus M/s. City Office Equipment and others

The Commissioner of Customs, Custom House Versus M/s. City Office Equipment and others - 2014 (302) E.L.T. 212 (Mad.) Issues Involved:
1. Import policy for second-hand digital multifunction print and copying machines under the Foreign Trade Policy 2009-2014.
2. Interpretation of Para 2.17 of the Foreign Trade Policy and Clause 2.33 of the Handbook of Procedures (Vol-1).
3. Conflict between Foreign Trade Policy and Handbook of Procedures.
4. Applicability of amendments to Para 2.17 post 28.02.2013.

Issue-wise Detailed Analysis:

1. Import Policy for Second-Hand Digital Multifunction Print and Copying Machines:
The respondents sought a Writ of Mandamus to direct customs authorities to assess and permit clearance of used second-hand digital multifunction print and copying machines upon payment of applicable duties. They contended that the restriction imposed under Notification No.I(RE-2012)2009-14 dated 05.06.2012 did not govern these goods. The learned single Judge allowed the writ petitions, directing the appellants to release the imported goods on payment of customs duties by treating them as freely importable under Clause 2.33 of the Handbook of Procedures (Vol-1).

2. Interpretation of Para 2.17 of the Foreign Trade Policy and Clause 2.33 of the Handbook of Procedures (Vol-1):
Para 2.17 of the Foreign Trade Policy categorizes second-hand goods into restricted and free categories. The appellants argued that digital multifunction and copying machines are restricted items and not freely importable. However, the respondents contended that Clause 2.33 of the Handbook of Procedures (Vol-1) allows the free import of second-hand capital goods, including digital multifunction print and copying machines. The court agreed with the respondents, stating that Clause 2.33 allows free import of second-hand capital goods except personal computers/laptops, and thus, digital multifunction print and copying machines are freely importable.

3. Conflict Between Foreign Trade Policy and Handbook of Procedures:
The appellants argued that in case of any conflict between the Foreign Trade Policy and the Handbook of Procedures, the policy should prevail. They cited various judgments to support their contention. However, the court found no conflict between Para 2.17 of the Foreign Trade Policy and Clause 2.33 of the Handbook of Procedures. The court held that the import policy regime on second-hand capital goods is laid down clearly in Clause 2.33, and there is no restriction on the free import of digital multifunction print and copying machines.

4. Applicability of Amendments to Para 2.17 Post 28.02.2013:
The appellants relied on Notification No.35 (RE02012)/2009-2014 dated 28.02.2013, which amended Para 2.17 to require authorization for importing second-hand digital multifunction print and copying machines. The court noted that this amendment is relevant only for the period post 28.02.2013 and does not apply to imports made before this date. The court rejected the appellants' contention that the amendment has retrospective effect, stating that the clear terms of the policy and procedure do not call for any interpretative process.

Conclusion:
The court dismissed the writ appeals filed by the Commissioner of Customs, Additional Commissioner of Customs (Imports), Director General of Foreign Trade, and the Additional Secretary to the Government of India. The court confirmed the order of the learned single Judge, directing the appellants to release the imported goods to the respondents within four weeks. The court found no conflict between the Foreign Trade Policy and the Handbook of Procedures and held that the import of second-hand digital multifunction print and copying machines is freely permissible under Clause 2.33 of the Handbook of Procedures (Vol-1).