TaxTMI 
TaxTMI 
2020 (10) TMI 184
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....pon the redemption fine and penalty to be paid by the respondent in respect of the goods imported, in terms of Section 125 of the Customs Act, 1962 [hereinafter, referred to as "the Act", for the sake of brevity] and to complete the process of the said adjudication within a period of two weeks from the date of receipt of the said order. Being aggrieved by the said order issued by the Tribunal, these appeals have been filed by the Revenue. 3. Briefly stated, the facts in CSTA.No.5/2020 are that the respondent in this appeal imported 104 units of used digital multifunctional printers/devices ("MFDs") of various brands with standard accessories and attachments of declared value of Rs. 33,01,195/-. According to the Chartered Engineer, value of the said goods is Rs. 41,23,213/-. The Department was of the opinion that the declared value did not conform to the transaction value in terms of Section 14 of the Act and liable for confiscation in terms of Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (hereinafter referred to as "the Rules" for the sake of convenience) and the value had to be re-determined under Rule 9 of the said Rules. The Departme....
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....not to be seized and penalty imposed. The Original Authority passed an order in Original No.3/2014 dated 4/1/2019. Being aggrieved, the respondent preferred an appeal before the Commissioner (Appeals), which was also dismissed. Hence, respondent preferred an appeal before the Tribunal, which has passed the impugned order by setting aside the absolute confiscation and remanded the matter for determination of redemption fine and penalty. Consequently, by the common impugned order dated 20/12/2019, the appeal filed by the respondent herein was disposed of with the aforesaid relief. 5. Being aggrieved, these appeals have been preferred by the Revenue, raising the following substantial questions of law:- "26. WHETHER, the impugned order of CESTAT is right in law in setting aside the confiscation and allowing the option of redemption particularly in view of the admitted fact that the goods imported did not fulfill the condition prescribed in paragraph 2.31 of the Foreign Trade Policy which prescribes the possession of authorization, for import of MFDs which are restricted goods? 27. WHETHER, the Tribunal is right in law in allowing the appeal by ignoring the provisio....
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.... importers had not appended Form Nos.6 and 7. Therefore, there was non compliance of the said Rule. In this regard, learned counsel for appellant - Department, drew our attention to Schedule VIII at Sl.No.4(j), which is pertinent to the product namely, MFDs. 8. He next contended that under Bureau of Indian Standards Act, 1986 ("BIS Act, 1986", for short), in exercise of the powers under Section 10(1)(p) of the said Act and pursuant to Clause (fa) of Rule 13 of the Bureau of Indian Standards Rules, 1987, the Central Government, has issued Electronics and Information Technology Goods (Requirements for Compulsory Registration) Order, 2012. That Clause (3) of the said Order prohibits manufacture, storage, sale, distribution etc., of goods, which do not conform to the specified standard and do not bear the words "Self declaration - Conforming to IS", on such goods, after obtaining registration from the Bureau. That the said clause would apply also to import of goods and to the goods in question. In that regard, he drew our attention to Schedule appended to the order to Item Nos.7 and 8, which deal with printers, plotters and scanners. In that regard, he also drew our attention to Not....
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....ed under Section 11 of the Act and all the relevant provisions of the Act shall have effect accordingly. That under Section 18(8) of the Act, it is stated that the Foreign Trade Act, 1992 is in addition to, and not in derogation of the provisions of any other law for the time being in force. Section 125 of the Act is applicable to the said section, which deals with option to pay fine. That in the instant cases, the Tribunal, by exercising jurisdiction under Section 125 of the Act, has set aside the order of the Original Authority, as well as the Appellate Authority and has remanded the matter to the Original Authority for the purpose of release of the goods or determination of the redemption fine and penalty. 10. Learned counsel for respondents also contended that the goods have shelf life of five to seven years and two and a half years have been spent in seeking release of the goods. That the Tribunal has also appreciated this aspect of the matter and has ordered for release of the seized goods, subject to determination of the redemption fine and penalty. He submitted that there is no infirmity in the impugned order and that substantial questions of law do not arise in the i....
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.... the country of origin certificate. 15. In appeal preferred by the Revenue, the High Court had held that the MFDs were categorized as "other wastes" under Rule 3(1)(23) of the H&OW Rules and it was held that the MFDs were not prohibited, but restricted items for import under the Foreign Trade Policy. That High Court upheld the order of release of goods, subject to executing a simple bond without sureties for 90% of the enhanced value. That liberty was reserved to the Director General of Foreign Trade (DGFT), to take further action in the matter. The Revenue carried the matter before the Hon'ble Supreme Court by contending that import of MFDs without authorization permit was in violation of the Foreign Trade Policy on account of the fact MFDs being categorized as "other wastes". Though, re-export was ordered, Section 125 of the Act could not have been invoked on the facts of that case, to hold that fine in lieu of confiscation would suffice for the purpose of redemption permitting import. That even if the MFDs were not restricted or prohibited item, absence of the necessary authorization under the Foreign Trade Policy would give the character of a prohibited item and merely becau....
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....made under the Act shall apply mutatis mutandis as deemed to have been made under Section 11 of the Customs Act also. Section 18A of the Foreign Trade Act reads that it is in addition to and not in derogation of other laws. Section 125 of the Customs Act vests discretion in the authority to levy fine in lieu of confiscation. The MFDs were not prohibited but restricted items for import. A harmonious reading of the statutory provisions of the Foreign Trade Act and Section 125 of the Customs Act will therefore not detract from the redemption of such restricted goods imported without authorisation upon payment of the market value. There will exist a fundamental distinction between what is prohibited and what is restricted. We therefore find no error with the conclusion of the Tribunal affirmed by the High Court that the respondent was entitled to redemption of the consignment on payment of the market price at the reassessed value by the customs authorities with fine under Section 112(a) of the Customs Act,1962. 10. The Central Government had permitted the import of used MFDs with utility for at least five years keeping in mind that they were not being manufactured in ....
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....oresaid judgment by learned counsel for respondents, in order to support the order of the Tribunal and to contend that the said judgment would squarely apply in the instant case. 17. On perusal of the aforesaid judgment, we find that the Hon'ble Supreme Court has held that MFDs under the Foreign Trade Policy, which provides both prohibition as well as restriction on import and export, was not a prohibited item of import, but only restrictions could be imposed on imports of such goods; That the Hon'ble Supreme Court also noted that the respondents therein did not possess the necessary authorization for their import. But while considering the matter, reference had to be made to the Foreign Trade Act and the Policy made thereunder. That in the event of there being contravention of Foreign Trade Act, Rules, Orders and the Policy framed under the said Act, the manner in which discretion could be exercised for release of the goods on remand of redemption charges becomes pertinent; That having regard to Section 3(3) of the Foreign Trade Act read with Section 18A of the said Act, Section 125 of the Act will become relevant. Since MFDs are not a prohibited item of import but restricted i....
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....nsel for respondents was that Form No.6 of the said Rules do not apply to the goods in question having regard to Schedule VIII Sl.Nol.4(j) inasmuch as Form No.6 is not prescribed for the MFDs. 22. While considering the aforesaid contentions, we find that there is force in the contentions of learned counsel for respondents, inasmuch as under the Order for compulsory registration of 2012, MFDs do not find a place and secondly, under the H&OW Rules, submission of Form No.6 under Sl.No.4(j) of the Schedule VIII of H&OW Rules, 2016 does not arise. 23. Admittedly, Form No.7 deals with an application form for one time authorization of traders for Part-D of Schedule III, which deals with "other wastes", under H&OW Rules. Admittedly, the MFDs in question are category of "other wastes". Noticing the fact that there was seizure of the goods in question and after the order of the Original Authority, the goods were held liable for confiscation and being aggrieved that respondents herein had challenged the order of the Authorities before the Tribunal. In the instant case, the Tribunal has applied the dictum of the Hon'ble Supreme Court in Atul Automations and has held that there was a subs....