TaxTMI 
TaxTMI 
2013 (6) TMI 273
X X X X Extracts X X X X
X X X X Extracts X X X X
....o the facts leading to the filing of W.P.No.1439 of 2013. 3. The petitioner in W.P.No.1439 of 2013 is engaged in the business of importing and trading in Secondhand Digital Multifunction Print and Copying Machines as well as Secondhand Photocopier Machines, besides trading in accessories, parts and consumables for the said machines. The petitioner imported a consignment comprising 96 units of old and used Digital Multifunction Print and Copying Machines of various models from the overseas supplier and filed a Bill of Entry bearing No.7380417, dated 13.7.2012 with the Customs House, Chennai and sought clearance of the goods under "free importability" as secondhand capital goods in terms of Para 2.17 read with Para 9.12 of Foreign Trade Policy 2009-2014 and Para 2.33 of Hand Book of Procedures V.1 2009-2014. The particulars of Bills of Entry in respect of other petitioners are as under:- S.No. W.P.No. Bill of Entry No. Date 1 1603/2013 7806870 30.8.2012 2 1850/2013 7242453 28.6.2012 3 1851/2013 8039175 25.9.2012 4 2122/2013 8039176 25.9.2012 5 2123/2013 7443194 20.7.2012 6 2310/2013 7634583 10.8.20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es without discrimination. Such exercise to be done preferably within a period of three weeks from the date of receipt of a copy of this order. The petitioners in each case represented by their counsel undertake that they will co-operate with the Customs Department for early disposal of the matter." 6. After passing of the order dated 9.11.2012, the petitioners, it appears, have made further representations to the competent authority on 16.11.2012 and 17.11.2012. Thereafter, the impugned order came to be passed by the respondent in respect of all the imports by a common Order-in-Original No.19915 of 2012, dated 17.12.2012. The respondent formulated the following issues for consideration:- (i) whether the secondhand Digital Multifunction (Print & Copying) Machines consigned to India after 5.6.2012 are restricted for import in terms of para 2.17 of the FTP (2009-2014); and (ii) whether the used Digital Multifunction (Print & Copying) Machines imported into India without obtaining prior permission of the MoEF, are covered under the category of 'Hazardous Wastes' in terms of the provisions of the Hazardous Waste (Management, Handling and Trans-boundary Movement) Rules, 2008, a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under Para 2.17 of the Foreign Trade Policy 2009-2014 and, therefore, the same cannot be freely imported. The learned Counsel reiterated the department's stand as set out in the impugned proceedings. 9. I have heard both sides at length and given anxious consideration to the issues involved in these cases. RESTRICTION ON IMPORT OF IMPUGNED GOODS: 10.1. To understand the issue as to whether there is a restriction for import in terms of Para 2.17 of the Foreign Trade Policy 2009-2014, it will be useful to refer to the following provisions of the Foreign Trade Policy 2009-2014 and the Hand Book of Procedures V.1 2009-2014: "Foreign Trade Policy 2009-2014: 2.4. Procedure: DGFT may, specify procedure to be followed by an exporter or importer or by any licensing/regional authority or by any other authority for purposes of implementing provisions of FT (D&R) Act, the Rules and the Orders made there under and FTP. Such procedures, or amendments if any, shall be published by means of a Public Notice. 2.6. Principles of restriction: DGFT may, through a notification, adopt and enforce any measure necessary for: (a) Protection of public morals; (b) Protection of human,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ort of Second Hand Capital Goods. (a) Import of second hand capital goods including refurbished/reconditioned spares, except those of personal computers/laptops, shall be allowed freely, subject to conditions for following categories: (b) Import of second hand computers including personal computers/laptops and refurbished/ reconditioned spares thereof is restricted. (c) Import of refurbished/reconditioned spares of capital goods, other than those of personal computers/laptops will be allowed on production of a Chartered Engineer certificate that such spares have atleast 80% residual life of original spare." 10.2. A reading of the various provisions referred to above, makes it abundantly clear that the import of secondhand capital goods, except personal computers/laptops, which will also be allowed to be imported on production of a certificate from a Chartered Engineer to the effect that such spares have at least 80% residual life of original spare. The petitioners, if at all required, will have to satisfy the conditions stipulated in Para 2.33 of the Handbook of Procedures. In the present case, the Hand Book of Procedures V.1 2009-2014 permits import of secondhand capit....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Judge formulated the following question for determination: "19. The question of determination in this case therefore is whether the goods imported by the petitioner though under restricted category could be freely imported subject to conditions laid down under para 2.33 Handbook or not." and held as under:- "20. The answer is to be in favour of the petitioner, for the simple reason that while placing the imported goods under the restricted category, procedure has been laid down for import of these goods, which provides that the goods can be imported as per the procedure of FTP, ITC (HS), HBP Vol.I, Public Notice or an authorization issued for import of the specified of second hand item. 21. The Handbook of Procedures under para 2.33 lays down that the import of secondhand capital goods except those of personal computers/laptops shall be freely allowed, subject to the conditions contained therein which are produced above. 22. Therefore, while placing the imported goods under Restricted category it is laid down that the photo copier machine/Digital Multifunction Printing and Copying Machine can be freely imported subject to the condition laid down in para 2.33 of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... free import. Thus, with no distinction maintained between other restricted category of second hand capital goods and second hand capital free goods, we do not find any good ground to read in Clause 2.33, a restriction on the free import of second hand digital multifunction print and copier machines. Thus reading sub clause (a) to Clause 2.33, if there is a restriction to be read on free import, it is only with reference to personal computers/laptops from among the restricted category of second hand capital goods group, which means, other restricted category under second hand capital goods group, specified in Para 2.17, namely, photocopier machine/digital multifunctional printing and copying machines, air conditioners, diesel generating sets, like other goods falling under free category, are permitted to be imported freely. Under sub clause (b) of Clause 2.33, there is a specific reference to the import of second hand computers, including personal computers/laptops and refurbished/reconditioned spares thereof, which suffer restricted import. Sub clause (c) of Clause 2.33 is with reference to import of refurbished/reconditioned spares of capital goods, such as what is covered under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndent in paras 10.1, 10.2 and 10.3 are untenable and contrary to the law laid down by this Court. It also stems from a misreading of the Foreign Trade Policy 2009-2014. Therefore, para 12(a) of the order holding that secondhand Digital Multifunction Print and Copying Machines are restricted for import under Para 2.17 of the Foreign Trade Policy 2009-2014 is contrary to law and accordingly, is liable to be set aside. IMPORTED GOODS WHETHER HAZARDOUS WASTE: 11.1. The next issue that was considered by the respondent is whether the provisions of the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008 will be attracted to the imports in question. While answering the issue in the affirmative, the respondent held that the subject goods are hazardous wastes as per Rule 3(l)(iii) of Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008, which reads as under: "Rule 3. (l) "hazardous waste" means any waste which by reason of any of its physical, chemical, reactive, toxic, flammable, explosive or corrosive characteristics causes danger or is (wrongly printed as "in") likely to cause danger to health or environment, whether alone o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of bringing used electrical and electronic assemblies imported for direct re-use under the definition of Hazardous Waste. Waste electrical and electronic assemblies as mentioned in the 2nd sub-entry of Basel No.B1110 cannot be re-used whereas electrical and electronic assemblies mentioned in the 3rd sub-entry of Basel No.B1110 can be re-used. Both are treated as hazardous waste by the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008." 11.3. The above said finding of the respondent is per se incorrect and misconceived, as what is contemplated in Basel No.B1110 of Part B of Schedule III is waste electrical and electronic assemblies. In the present case, what has been imported is not assemblies, but complete machines. It is not a part of a machine. What has been imported is not a waste or disposed of assemblies, but a complete machine, which is in working condition and that has been verified by the Chartered Engineer at the behest of the Customs Department. The Chartered Engineer certified that the machines are in working condition with residual life. This fact is not disputed by the respondent. Therefore, on misconceived interpretation, by placin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....parts of engines, which are defined as assemblies, can be referred to in the following chapters: EXIM Code Item Description Policy 8409 91 Suitable for use solely or principally with spark ignition internal combustion piston engines:- Valves, inlet & exhaust, piston, piston rings, piston assemblies:- Valves, inlet & exhaust, piston, piston rings, piston assemblies:- 8409 99 11 Valves, inlet & exhaust Free 8409 99 12 Pistons Free 8409 99 13 Piston rings Free In contrast, EXIM Code 8443 31 00 speaks about machines, which are the goods under import in the present case. The said Code reads as under: EXIM Code Item Description Policy 8443 31 00 Machines which perform two or more of the functions of printing, copying or facsimile transmission, capable of connecting to an automatic data processing machine or to a network. Free There is a clear distinction between machines and assemblies. The authority failed to take note of the same. In fact, on classification of export and import items, ITC(HS) is binding on the authorities. On inspection it is clarified that imported goods are complete machines and not electrical and electronic assemblies. Since....
X X X X Extracts X X X X
X X X X Extracts X X X X
....imported goods. 2. Taking note of the said statement, this Court directs the Chartered Engineer, M/s.Inspectorate Griffith India Private Limited, 23, Rajaji Salai, 4th Floor P.T.Lee Chengalvaraya Naicker Maligai, Chennai and the Member Secretary of the Tamil Nadu Pollution Control Board to inspect the goods involved in W.P.Nos.21732, 21733 and 21985 to 21988 of 2011 and 22081 of 2011 and give their opinion within a period of two weeks from today. The petitioners herein are directed to extend necessary co-operation for conducting inspection by the Chartered Engineer. The report of the Chartered Engineer along with the opinion of the Pollution Control Board shall reach this Court on or before 27.10.2011. Post on 27.10.2011." and consequently inspection was done. The department accepted the order without demur. To plead differently in the present case is against the established practice and procedure followed by the Customs Department. 11.9. Besides, it is erroneous on the part of the respondent to come to the conclusion that the goods imported are hazardous wastes without any material by merely interpreting the provisions of the Hazardous Wastes (Management, Handling and Tra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s Chapter unless the owner of the goods or such person - (a) is given a notice in writing with the prior approval of the officer of Customs not below the rank of an Assistant Commissioner of Customs, informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and (c) is given a reasonable opportunity of being heard in the matter: Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may, at the request of the person concerned be oral." 12.3. Admittedly, no show cause notice has been issued for confiscation or for imposition of penalty and therefore there is a statutory violation in the order confiscating the goods and imposing penalty. While disposing of W.P.No.28285 of 2012, etc. batch on 9.11.2012, liberty was given to the department to assess the goods in terms of the Customs Act, 1962 read with the Foreign Trade Policy as may be applicable and if it is found that it require....