M/S.Simple Machines, v. The Commissioner of Customs

Order, 2012 as amended from time to time.

(ii) Import

of unregistered/non-S.No. Categories of Second Hand Goods Import Policy Conditions, if any complaint notified products as in CRO, 2012 as amended from time to

time

is "Prohibited".

¶13Sl.No.(b), referred to above, states that all electronics and IT goods notified under the Electronics and IT Goods (Requirement of Compulsory Registration) Order, 2012, as amended from time to time are "restricted". Therefore, they are supposed to get authorization from the DGFT. When the said policy was in force, at that point of time also several imports have been made for importing second hand multi-function devices and similar issue was raised that these are all the multi function devices coming under Sl.No.(b). Therefore, unless otherwise authorization is obtained from the DGFT, the same cannot be imported.

¶14The issue was dealt with by the Apex Court and the Apex Court passed an order in Spl. Leave to Appeal (C) No.7565 of 2021.

¶15In the Notification No.5/2015-2020, dated 07.05.2019, only two clauses are available viz., (a) and (b), but, in the case of Foreign Trade Policy 2023, there are four clauses under Sl.No.I. This Court is of the considered view that as per Foreign Trade Policy, 2023, the petitioners' goods would not fall under the category I(b), but it falls under the category I(d) which indicates that other than goods mentioned in I(a), I(b), I(c), all other second-hand capital goods can be imported freely without any restriction. Therefore, if the petitioners not fall under clause I(b) automatically they fall under I(d). The Supreme Court has taken note of the said fact and stayed the confiscation of goods in a similar matter. Further, this Court, on a comparison of Notification No.5/2015-2020, dated 07.05.2019 and Foreign Trade Policy 2023, does not find any new changes brought in so that prohibited multi function devices should get authorization from DGFT. The petitioners stand on the same footing as that of the petitioners before the Supreme Court in Spl. Leave to Appeal

(C) No.7565 of 2021. The order of stay of confiscation of goods passed by the Hon'ble Supreme Court is in force till date.

¶16Further, learned Single Judge of this Court also granted release of goods in W.P.Nos.1393 of 2022 etc. batch, wherein the learned Single Judge has dealt with all the aspects. The relevant portion of the said order reads thus: "12. Whether a notification has been issued on

18.03.2021 under which, the goods in question, namely Multi-Function Devices are brought under the category of printers with effect from 18.09.2021, based on which, whether the petitioners are not entitled to get it released and also based on 01.04.2020 notification, whether the goods which are in question are prohibited goods or not, all these matters are pending before the law Courts.

¶13In this regard, the policy decision taken by the Government i.e., the Revenue has already been put under challenge in a batch of cases before this Court, which are said to be pending.

¶14Moreover, in the order dated 11.08.2021, the Hon'ble Supreme Court has taken note of these factors, where the arguments advanced on behalf of the Revenue before the Hon'ble Supreme Court was that, on and from 01.04.2020, the goods, according to the Department, are clearly prohibited goods and on and from that date, unless an order is made under Section 125 of the Customs Act, the goods stands confiscated, the Hon'ble Supreme Court had stayed the confiscation process and also has observed that, the notification dated 01.04.2020 is the subject matter of controversy before the Hon'ble Supreme Court, particularly in view of the subsequent notification dated

18.03.2021. Therefore, the goods which are in question were allowed to be released by way of provisional release on the same terms and conditions, which means, the enhanced duty has to be paid by the petitioners/importers as a condition precedent for getting release of these goods by way of provisional release.

¶15Therefore, as of now, unmindful of the pendency of the litigations with regard to the applicability or otherwise of the notifications, namely notification dated 01.04.2020 or

18.03.2021, independently the prayer sought for by way of Mandamus can be considered and granted, because of the aforestated judgments, where, the learned Single Judge order dated 25.01.2021 has been confirmed by the Hon'ble Supreme Court by order dated 11.08.2021 by reversing the Division Bench order dated 04.03.2021.

¶16In that view of the matter, the arguments advanced by the learned Senior Counsel appearing for the petitioners that, the issue raised in these writ petitions especially in the context of the prayer of Mandamus sought for herein is covered by the said decision of the Court of Law including the decision of the Hon'ble Supreme Court dated 11.08.2021 is to be accepted."

¶17The issue in the present cases and the issue in the above W.P.Nos.1393 of 2022 etc. batch are one and the same. Therefore, the said order is squarely applicable to the cases on hand also.

¶18Therefore, following the view taken by the Hon'ble Supreme Court and learned Single Judge of this Court, this Court is inclined to allow these writ petitions to the extent of releasing the goods provisionally.

¶19Learned Senior Standing Counsel and learned Central Government Standing Counsel appearing for respondents also brought to the notice of this Court that in the cases dealt with by Hon'ble Supreme Court as well as the learned Single Judge, the goods were confiscated, but, in the present case, no confiscation has been made.

¶20In the aforestated circumstances, this Court is of the view that the petitioners are in a better position than the petitioners before the Supreme Court and the learned Single Judge. In view of the above findings, this Court does not find any impediment for the respondents to release the goods provisionally.

¶21The other contention of respondents that the petitioners, without availing the appeal remedy, have straight away approached this Court is concerned, this Court finds that the goods were imported by the petitioners on 19.07.2023 and the department has not passed any order till date, which itself shows that the department is in a confused state of mind and that is the reason why they have not taken any decision till date. It is the duty of the department to pass appropriate orders within a reasonable time and they cannot unnecessarily detain the goods for a long period of time. In the result,

(i) W.P.Nos.28817 and 30506 of 2023 are disposed of directing the petitioners to cause reply to the show cause notice issued to them and the respondent department is directed to consider the same and pass necessary orders within a stipulated time. As far as release of goods is concerned, the same shall be released provisionally.

(ii)W.P.Nos..29673, 27544, 27547, 27548, 28115, 28119, 29678, 29680, 29684 of 2023 & 30490, 30492, 30495, 30496, 30498, 30500, 30501 & 30503 of 2023 are allowed and the following order is passed:

(a) That there shall be a direction to the respondents to consider the plea of the petitioners to release the goods by way of provisional release on condition that, the petitioner shall pay/deposit the enhanced duty amount. On receipt of such enhanced duty amount paid by the petitioners, the goods in question shall be released within a period of three (3) weeks thereafter.

(b) For payment of such duty, quantification shall be made by the Customs forthwith within one (1) week from the date of receipt of a copy of this order. On receipt of such quantification, the payment shall be immediately made by the petitioners and on receipt of the payment in entirety, the goods shall be released as indicated above at the outer limit of three (3) weeks.

(c) It is made clear that this order will not stand in the way for Customs Department to go ahead with the further proceedings including the adjudication in the manner known to law.

(d)It is further made clear that in the earlier interim order passed in a related writ petitions by an another Division Bench of this Court, that demurrage charges till date for the goods was directed to be considered for waiver. In this regard, if any application is filed by the petitioners seeking such a waiver of demurrage charges, the same shall be considered and decided by the respondents objectively. No costs. W.M.P.Nos.28415 and 30149 of 2023 are ordered and the other writ miscellaneous petitions are closed.

23.11.2023 Upload/Issue on 01.12.2023 Index: yes/no Speaking Order/Non-speaking Order gm To

1.The Commissioner of Customs (Chennai II) Import, Custom House, No.60, Rajaji Salai, Chennai - 600 010.

2.The Additional Commissioner of Customs (Concor ICD), Custom House, No.60, Rajaji Salai, Chennai - 600 010.

3.The Deputy Commissioner of Customs (Concor ICD), Concor ICD, Tondiarpet, Chennai - 600 081. KRISHNAN RAMASAMY, J gm Writ Petition Nos.29673, 27544, 27547, 27548, 28115, 28119, 28817, 29678, 29680, 29684 of 2023 & 30490, 30492, 30495, 30496, 30498, 30500, 30501, 30503 & 30506 of 2023

23.11.2023

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 23.11.2023 C O R A M THE HONOURABLE MR.JUSTICE KRISHNAN RAMASAMY and W.M.P.Nos.29281, 26986, 26991, 26993, 27629, 27635 28416, 29287, 29288, 29289 of 2023 & 30130, 30131, 30132, 30136, 30138, 30141, 30144, 30147 & 30150 of 2023 & 28415 & 30149 of 2023 W.P.No.29673 of 2023 M/s.Simple Machines, B-23, Patparganj Industrial Area, Delhi - 110 092. represented by its Proprietor, Mr.Vijay Arora ... Petitioner Vs. 1.The Commissioner of Customs (Chennai II) Import, Custom House, No.60, Rajaji Salai, Chennai - 600 010. 2.The Additional Commissioner of Customs (Concor ICD), Custom House, No.60, Rajaji Salai, Chennai - 600 010. 3.The Deputy Commissioner of Customs (Concor ICD), Concor ICD, Tondiarpet, Chennai - 600 081. ... Respondents PRAYER: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Mandamus directing the respondents 1 to 3 herein forthwith allow provisional release of 126 units of various models of Secondhand Highly Specialized Equipments - Digital Multifunction Print & Copying Machines, imported by the petitioner and which have been submitted for clearance before the respondents vide Bill of Entry No.7838163 dated 15.09.2023 on execution of Simple Bond for 100% of enhanced value of goods and also payment of applicable total Custom Duty/taxes on the enhanced value, as assessed by the Chartered Engineers M/s.Supreme Techno Associates Pvt. Ltd. in their reports vide Report No.STA/IR/O&VC/C-336/2023-24 dated 26.09.2023. For Petitioner : Mr.Nithyaesh Natraj [in all W.Ps.] for Mr.Anirudh A Sriram For Respondents W.P.Nos.29673 & 28115 of 2023 : Mr.Rajendran Raghavan, Senior Standing Counsel W.P.Nos.28119, 28817, 29684, 27544, 29680, 28119 & 27547 of 2023 : Mr.M.Santhanaramani, Senior Standing Counsel W.P.No.29678 of 2023 : Mr.K.S.Ramaswamy, Central Government Standing Counsel W.P.Nos.30490, 30492, 30495, 30496, 30498 & 30503 of 2023 : Mr.Rajnish Pathiyil Senior Standing Counsel W.P.Nos.30500, 30501 &30506 of 2023 : Mr.Rajendran Raghavan, Senior Standing Counsel ***** COMMON ORDER As the issue involved in all these writ petitions are similar, they are considered and decided by this common order. 2. W.P.Nos.28817 and 30506 of 2023 have been filed challenging the show cause notices issued by the first respondent dated 22.09.2023 and 05.10.2023 respectively. The other writ petitions have been filed seeking release of goods. 3. Learned counsel for petitioners submitted that the petitioners are duly registered firms and have been in the business of import and trading of secondhand highly specialized equipments - digital multifunction print and copying machines etc. During the course of petitioners' business, their firms have imported consignment of several units of Secondhand Multifunction Print and copying machines in the year 2023 and sought for assessment and clearance of the above goods. As per the practice prevailing in the Chennai Customs, in respect of import of second hand capital goods, the Officers In-charge, have ordered for 100% examination under first check appraisal. Accordingly, as per the orders of the Officers, examination and inspection of the said machines were carried out by the Directorate General Foreign Trade [for brevity "DGFT"] approved Chartered Engineers under the supervision of Customs Officers In- charge. The Chartered Engineers have enhanced the C&F value for the consignment as against the actual transaction C&F value. Despite the goods having been examined by the DGFT approved Chartered Engineer in the presence of Customs Officers and also having submitted their Inspection Report and Valuation Certificate, the Customs Authorities have not allowed the clearance of the above consignment till date. Since the petitioners have imported a consignment of several units of secondhand highly specialized equipments – digital multifunction print & copying machines in terms of para 8(a) to (d) vide Amendment Order dated 01.07.202