2020 (4) TMI 421 - AT - Customs

Goods Confiscation: Redemption Rights Upheld under Customs Act |

M/s. S.R. Enterprises Versus The Commissioner of Customs Bangalore-Cus.

The judgment in the case of M/s Digital Enterprises and M/s S R Enterprises v. Commissioner of Customs (Appeals) addresses the confiscation of imported ... Import of prohibited item - old and used multifunction devices and printers - no possession of authorization, prescribed in paragraph 2.31 of the Foreign Trade Policy notified under the Foreign Development and Regulation Act, 1992 - Absolute Confiscation - penalty - HELD THAT:- It is clear from the decision of the Hon’ble Supreme Court in COMMISSIONER OF CUSTOMS VERSUS M/S. ATUL AUTOMATIONS PVT. LTD., AND PARAG DOMESTIC APPLIANCES [2019 (1) TMI 1324 - SUPREME COURT] that the impugned goods are to be considered as ‘other wastes’ and the prohibition, applicable upon nonconformity with the conditions for import of ‘hazardous waste’, would not apply to the impugned goods. It is also abundantly clear that five conditions prescribed in the said schedule VIII of the said Rules are complied with and that the contention of the lower authorities, of capacity to print on paper smaller than A3 as disqualifying it from the ambit of the diluted conditions in the said Schedule, does not appear to be acceptable - The requirement of Form 6 and Form 7, incorporated for ‘hazardous waste’, are not, therefore, mandated for the import of the impugned goods. It is clear from the exclusive categorization of the impugned goods as ‘multifunctional devices’ that the prescription of standards to be conformed by each of the machines, when intended to function separately, that make up this composite machine are not applicable to the impugned goods; hence the need for certification under Bureau of Indian Standards Act is not mandated. The absolute confiscation of the goods must be set aside in the face of restrictions that are not prohibition. The economic advantage of import even in the absence of license mandated for restricted goods must be neutralized with reference to the market price of goods that are imported against such license - It is, therefore, necessary for the adjudicating authority to decide upon the redemption fine and penalty on the impugned goods - The adjudicating authority is required to complete the process of re-adjudication of the above within a period of two weeks from the receipt of this order - Appeal allowed by way of remand. Issues:1. Confiscation of imported goods without offering redemption option.2. Application of hazardous waste categorization.3. Compliance with Foreign Trade Act and Customs Act.4. Applicability of Hazardous and Other Wastes Rules, 2016.5. Interpretation of printing size conditions and Bureau of Indian Standards Act.6. Determination of redemption fine and penalties.Issue 1: Confiscation of imported goods without offering redemption option:The judgment addresses the common issues in appeals by M/s Digital Enterprises and M/s S R Enterprises against orders-in-appeal of Commissioner of Customs (Appeals). The appellants agree to the initiation of proceedings for not having the required authorization for importing 'old and used' goods. However, they object to the confiscation of goods without the option for redemption, as per section 125 of the Customs Act, 1962. The argument is that the categorization of goods as 'hazardous waste' is a misapplication of the law, and the goods should be redeemable based on previous legal precedents.Issue 2: Application of hazardous waste categorization:The judgment discusses the misapplication of categorizing the imported goods as 'hazardous waste' under the Management, Handling and Transboundary Movement Rules, 2016. The appellants argue that the goods, although 'old and used', are not 'prohibited' but 'restricted' items for import, and should be redeemable upon payment of the market value.Issue 3: Compliance with Foreign Trade Act and Customs Act:The judgment analyzes the compliance with the Foreign Trade Act and Customs Act, emphasizing the distinction between prohibited and restricted goods. It references legal provisions and previous court decisions to support the argument that the impugned goods should be subject to redemption after confiscation, as they are not prohibited items.Issue 4: Applicability of Hazardous and Other Wastes Rules, 2016:The judgment examines the amendments in the Hazardous and Other Wastes Rules, 2016, allowing traders to import certain machines under the free category. It highlights that the impugned goods should not be subject to the stringent conditions applied to hazardous waste imports.Issue 5: Interpretation of printing size conditions and Bureau of Indian Standards Act:The judgment addresses challenges to the applicability of certain rules and notifications regarding the impugned goods' conformity to printing sizes and mandatory registration. It clarifies that the goods, categorized as 'multifunctional devices', do not require certification under the Bureau of Indian Standards Act.Issue 6: Determination of redemption fine and penalties:The judgment concludes by stating that the impugned goods must be offered for redemption under section 125 of the Customs Act, 1962, after confiscation. The adjudicating authority is directed to determine the redemption fine and penalties within a specified timeframe, emphasizing the need to neutralize any economic advantage gained from importing goods without the required authorization.Ultimately, the appeals are disposed of, with the judgment providing detailed analysis and legal reasoning for each issue raised by the appellants, leading to a decision in favor of offering redemption for the confiscated goods.