Import of second-hand multifunction printers and copiers classified under FTP 2023 as freely importable; provisional release granted

Dispute concerns whether imported second-hand multifunction print and copying machines are restricted or freely importable under the Foreign Trade Policy 2023. The material was assessed against the FTP 2023 classification: devices do not fall within category I(b) (restricted electronics requiring DGFT authorization) but within I(d), which permits import of other second-hand capital goods without restriction; consequence: authorization from DGFT is not required and provisional release of goods was ordered. Comparison with Notification No.5/2015-2020 shows no new prohibition necessitating DGFT authorization, and a higher court had stayed confiscation in a similar matter.

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Issues Involved:
1. Legality of the Show Cause Notices.
2. Requirement of Authorization and Compulsory Registration for Import.
3. Classification of Imported Goods under Foreign Trade Policy.

Summary:

Issue 1: Legality of the Show Cause Notices
W.P.Nos.28817 and 30506 of 2023 challenge the show cause notices issued by the first respondent on 22.09.2023 and 05.10.2023. The petitioners argue that these notices are based on a "complete misconception and misreading of the relevant regulations," specifically the Foreign Trade Policy 2023 and 2021 orders by MEITY. The court directed the petitioners to reply to the show cause notices, and the respondent department must consider and pass necessary orders within a stipulated time. The court allowed provisional release of the goods.

Issue 2: Requirement of Authorization and Compulsory Registration for Import
The petitioners, registered firms in the business of importing second-hand digital multifunction print and copying machines, argued that their goods are exempt from Compulsory Registration with BIS as per MEITY's Amendment Order dated 01.07.2021. The respondents contended that the petitioners must produce authorization from DGFT and Compulsory Registration Certificate of BIS as per the Foreign Trade Policy Guidelines. The court found that the petitioners' goods fall under Clause I(d) of the Foreign Trade Policy 2023, which allows free import of second-hand capital goods without restrictions, thus not requiring authorization from DGFT.

Issue 3: Classification of Imported Goods under Foreign Trade Policy
The central issue was whether the imported goods fall under Clause 2.31 of the Foreign Trade Policy 2023. The court referred to Clause 2.31, which categorizes second-hand goods and their import policies. The respondents argued that the goods fall under Clause I(b), requiring compulsory registration and authorization. However, the court concluded that the goods fall under Clause I(d), allowing free import without restrictions. This conclusion was supported by previous rulings, including an order from the Supreme Court and a Single Judge of the High Court, which allowed provisional release of similar goods.

Conclusion:
The court allowed the writ petitions for provisional release of the goods upon payment of enhanced duty. The Customs Department was directed to quantify the duty within one week, and upon payment, release the goods within three weeks. The court also noted that the Customs Department could proceed with further adjudication as per law. The court addressed the issue of demurrage charges, directing the respondents to consider any waiver applications objectively.

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