Commissioner of Customs Vs. M/s. Atul Automations Pvt. Ltd.

Commissioner of Customs Vs. M/s. Atul Automations Pvt. Ltd.

[Civil Appeal No(S). 1057 of 2019 arising out of SLP (C) No. 12471 of 2018]

Commissioner of Customs Vs. M/S. Parag Domestic Appliances

[Civil Appeal No(S). 1058 of 2019 arising out of SLP (C) No.12704 of 2018]

Commissioner of Customs Vs. M/S. Atul Automations Pvt. Ltd.

Civil Appeal No(S). 1059 of 2019 arising Out of SLP(C) No.16204 of 2018]

Commissioner of Customs Vs. M/S. Parag Domestic Appliances

[Civil Appeal No(S). 1060 of 2019 arising out of SLP (C) No.16325 of 2018]

NAVIN SINHA, J.

1. Leave granted.

2. The respondents during OctoberNovember, 2016 imported certain consignments of MultiFunction Devices (Digital Photocopiers and Printers) (hereinafter referred to as “MFDs”). The Commissioner of Customs held that the imports were in violation of the Foreign Trade Policy framed under the Foreign Trade (Development and Regulation) Act, 1992 (hereinafter referred to as the “Foreign Trade Act”) and Rule 15(1)(2) of the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016 (hereinafter referred to as “Waste Management Rules”). Redemption fine was imposed under Section 125 of the Customs Act, 1962 and the consignment released for reexport only. Penalty was also imposed under Section 112(a) along with penalty under Section 114AA of the Customs Act as also penalty was imposed on the Directors.

3. In appeal before the Tribunal, the respondents did not contest that the import was in violation of the Foreign Trade Policy having been made without the necessary prior authorisation. The Tribunal held that the MFDs did not constitute “waste” under Rule 3(1)(23) of the Waste Management Rules and had a utility life of 5 to 7 years, as certified by the Chartered Engineer. Release of the consignment was directed under Section 125 of the Customs Act as the respondents were held to have substantially complied with the requirements of Rule 13 of the Waste Management Rules read with Schedule VIII Entry 4(j) except for the country of origin certificate.

The Tribunal further noticed that earlier also similar consignments of the respondent and others had been released at the Calcutta, Chennai and Cochin ports upon payment of redemption fine. The redemption fine was reduced as also the penalty under Section 112(a) of the Customs Act was reduced including that on the Director also. The penalty under Section 114AA was done away with.

4. In the appeal preferred by the Revenue, the High Court held that the MFDs correctly fell in the category of “other wastes” under Rule 3(1)(23) of the Waste Management Rules read with Part B and Part D of Schedule III Item B1110 dealing with used MultiFunction Printer and Copying Machines. Adverting to the provisions of the Foreign Trade Act and the Foreign Trade Policy framed thereunder, it was held that the MFDs were not prohibited but restricted items for import. Section 11(8) and (9) of the Foreign Trade Act provided for confiscation and redemption of goods imported without authorisation upon payment of market value. The order for release of the goods was upheld subject to execution of a simple bond without sureties for 90% of the enhanced assessed value, with further liberty to the Director General of Foreign Trade (hereinafter referred to as “the DGFT”), along with directions.

5. Shri Maninder Singh, learned senior counsel appearing for the appellant submitted that import of the MFDs without authorisation permit and in violation of the Foreign Trade Policy is not in dispute. The imported MFDs having been held to be “other wastes”, documentation being incomplete under Part D of Schedule III of the Waste Management Rules, reexport was rightly ordered under Rule 15 of the Waste Management Rules while imposing redemption fine. Section 125 of the Customs Act could not have been relied upon, in the facts of the case, to hold that fine in lieu of confiscation would suffice for purpose of redemption permitting import.

Even if the MFDs were a restricted and not prohibited item, absence of the necessary authorisation under the Foreign Trade Policy would give it the character of a prohibited item. The respondents had been habitual in the illegal import of similar consignments. Merely because on earlier occasions, similar consignments imported in violation of the law may have been released on payment of redemption fine, it did not vest a legal right in the respondent to claim similar relief always. The customs authorities, in the facts of the case, cannot be said to have detained the consignment without justification.

6. Shri Mukul Rohatgi, learned senior counsel appearing for the respondent submitted that MFDs were imported in OctoberNovember, 2016. The requirement of extended producer responsibility under the Ewaste (Management) Rules, 2016 was deferred till 30.04.2017 by the Technical Committee under the Ministry of Environment and Forest. In any event, the respondent has obtained the same before release of the consignment. The question for disposal of the imported machine at this stage is premature as it has a utility life of 5 to 7 years.

The consignment was not a prohibited but restricted item. S

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