Tribunal Allows Import of MFDs with Fines; Aligns with Previous Rulings on Trade Policy, Not Classified as E-Waste.

The Tribunal set aside the order of absolute confiscation of imported Digital Multifunctional Devices (MFDs), allowing their clearance upon payment of a 10% redemption fine and a 5% penalty of the reassessed value, in addition to applicable customs duty. The appellant's violations under the Foreign Trade Policy were acknowledged, but the goods were not deemed prohibited, and proper authorization could facilitate their import. The appeal was disposed of in favor of the appellant, aligning with prior Tribunal decisions that MFDs are not classified as hazardous waste or e-waste and are not subject to compulsory registration under the Bureau of Indian Standards Act.

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Issues Involved:
1. Alleged undervaluation of imported goods.
2. Violation of Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016.
3. Violation of E-Waste (Management) Rules, 2016.
4. Violation of the Bureau of Indian Standards Act, 1986 read with Electronics & IT Goods (Requirement of Compulsory Registration) Order, 2012.
5. Violation of Foreign Trade Policy (FTP) 2015-20.
6. Absolute confiscation of goods under Section 111(d) and 111(o) of the Customs Act, 1962.

Detailed Analysis:

1. Alleged Undervaluation of Imported Goods:
The appellant imported 127 units of old and used Digital Multifunctional Devices (MFDs) from Singapore and filed Bill of Entry No. 2677800 dated 01/08/2017. The Chartered Engineer’s report dated 23/08/2017 enhanced the value of the goods from USD 25,035 to USD 34,115. The Department alleged undervaluation, leading to a show-cause notice. The adjudicating authority determined the value of the goods as Rs. 22,71,815 and ordered absolute confiscation.

2. Violation of Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016:
The appellant argued that the impugned goods are not hazardous waste. The Apex Court in Commissioner of Customs Vs. M/s. Atul Automations Pvt. Ltd. held that used MFDs with utility for at least five years are classified as “other wastes” under Rule 3(1)(23) and not hazardous waste. The Tribunal in S.R. Enterprises reiterated that the impugned goods are considered “other wastes” and not subject to the prohibitions applicable to hazardous waste.

3. Violation of E-Waste (Management) Rules, 2016:
The appellant contended that the goods did not violate E-Waste Rules. The Apex Court and Tribunal decisions in similar cases supported the view that used MFDs with certified utility are not classified as e-waste under the relevant rules. The Tribunal in S.R. Enterprises confirmed that the goods are not hazardous waste and thus not subject to the E-Waste Rules.

4. Violation of the Bureau of Indian Standards Act, 1986 read with Electronics & IT Goods (Requirement of Compulsory Registration) Order, 2012:
The appellant argued that MFDs are not listed in the schedule to the CRO 2012, and thus registration with the Bureau of Indian Standards is not required. The Tribunal in Sri Venkateswara Repro Graphics and S.R. Enterprises held that MFDs are not notified under the CRO 2012, and hence, the requirement for compulsory registration does not apply.

5. Violation of Foreign Trade Policy (FTP) 2015-20:
The appellant conceded that the goods are restricted and they did not possess the authorization from the DGFT. The Tribunal acknowledged this violation but noted that the goods are not prohibited and can be imported with proper authorization.

6. Absolute Confiscation of Goods under Section 111(d) and 111(o) of the Customs Act, 1962:
The Tribunal consistently held that MFDs are not liable for absolute confiscation. Instead, the goods can be released on payment of redemption fine and penalty. The Tribunal in S.R. Enterprises and other cases ordered the release of goods on payment of 10% redemption fine and 5% penalty of the reassessed value, in addition to applicable customs duty.

Conclusion:
The Tribunal found that the impugned order was not sustainable in law. The absolute confiscation of the goods was set aside, and the goods were allowed for clearance on payment of redemption fine at 10% and penalty at 5% of the reassessed value, along with applicable customs duty. The appeal was disposed of accordingly.

Order Pronounced:
(Order was pronounced in Open Court on 15/12/2020)

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