Foreign Trade Policy classification of second-hand machines allowed free import treatment and provisional release subject to duty

Imported second-hand multifunction print, copying and scanning machines were treated as second-hand capital goods under Clause 2.31 of the Foreign Trade Policy 2023, with no material change from the earlier 2019 framework requiring a different classification. On that reading, the machines did not fall within the restricted category in Clause 2.31(I)(b) and were instead covered by Clause 2.31(I)(d), making them freely importable. The Court also relied on parity with earlier proceedings where provisional release had been granted and directed provisional release of the goods, subject to enhanced duty, while leaving customs adjudication open.

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Issues: Whether the imported second-hand multifunction print, copying and scanning machines fell within Clause 2.31 of the Foreign Trade Policy 2023 as second-hand capital goods eligible for free import, and whether the goods were liable to provisional release.

Analysis: The policy framework under Clause 2.31 of the Foreign Trade Policy 2023 was compared with the earlier 2019 notification and the Court found no material change warranting a different treatment of the imported machines. On that reading, the goods were held not to fall within the restricted category under Clause 2.31(I)(b), but within Clause 2.31(I)(d), which covers other second-hand capital goods that are freely importable. The Court also noted the parity of the petitioners' case with earlier proceedings where provisional release had been granted, and found no impediment to directing release of the goods provisionally while leaving adjudication open.

Conclusion: The petitioners were entitled to provisional release of the goods, subject to payment of the enhanced duty, while the customs authorities were left free to continue the adjudication proceedings.

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