Exemption for highly specialised equipment extends to second-hand multi-functional devices, with provisional release allowed pending adjudication.

The Telangana HC held that multi-functional devices imported as second-hand goods could still fall within the express exemption for highly specialised equipment under clause 8 of the Electronic and IT Goods (Requirements of Compulsory Registration) Order, 2021, if the prescribed criteria are met. On that basis, the Court rejected denial of exemption merely because the goods were used. It also directed provisional release of the seized consignments pending adjudication, subject to enhanced duty, bank guarantee, and continuation of proceedings in accordance with law.

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Issues: (i) Whether multi-functional devices imported by the petitioners fell within the exempt category of highly specialised equipment under clause 8 of the Electronic and IT Goods (Requirements of Compulsory Registration) Order, 2021. (ii) Whether the seized consignments were liable to be provisionally released pending adjudication.

Issue (i): Whether multi-functional devices imported by the petitioners fell within the exempt category of highly specialised equipment under clause 8 of the Electronic and IT Goods (Requirements of Compulsory Registration) Order, 2021.

Analysis: The foreign trade policy treated certain second-hand goods as restricted and importable only against authorisation, but the Court found that clause 8 of the 2021 Order, introduced by amendment, exempted highly specialised equipment if the prescribed criteria were satisfied. On a plain reading, the Court held that the exemption was not excluded merely because the goods were second-hand, and that multi-functional devices, on the facts placed before it, answered the description of highly specialised equipment.

Conclusion: The issue was answered in favour of the petitioners.

Issue (ii): Whether the seized consignments were liable to be provisionally released pending adjudication.

Analysis: Since the goods were treated as falling within the exempt category, and similar relief had been granted in earlier decisions relied upon before the Court, continued detention of the consignments was found unwarranted. The Court nevertheless directed compliance conditions, including payment of enhanced duty, furnishing of bank guarantee, and continuation of adjudication proceedings in accordance with law.

Conclusion: Provisional release of the goods was directed in favour of the petitioners.

Final Conclusion: The writ petitions succeeded, and the Customs authorities were directed to process provisional release of the consignments subject to the stipulated safeguards, without affecting further adjudication under law.

Ratio Decidendi: Where imported goods fall within an express exemption for highly specialised equipment under the governing registration order, provisional release cannot be denied solely on the ground that the goods are second-hand or that further adjudication is pending.

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