Disposed

M/S.Ace Digital Systems v. the Commissioner of Customs

Madras HC10 Nov 2017WP/19635/2010

Case brief

AI extract

What is this about?

A Single Judge of the Madras High Court disposed of a writ petition seeking clearance of imported second-hand digital multifunction machines. Citing a precedent where an adjudication process was upheld, the Court directed the Customs authorities to issue a show cause notice and permitted the petitioner to furnish a bond and participate in the subsequent adjudication to determine if restrictions or

What did the court decide?

Direction to issue a show cause notice, permit petitioner to file objections, furnish a personal bond, and participate in the adjudication.

M/S.Ace Digital Systems Vs the Commissioner of Customs — Banking and Recovery | Madras HC (2017)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 10.11.2017

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CORAM

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THE HONOURABLE Mr. JUSTICE T.S.SIVAGNANAM

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W.P.No.19635 of 2010 and M.P.No.1 of 2010

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M/s.Ace Digital Systems Rep. by its Proprietor Mr.Ketan Kamdar, No.5/4, Ram-Moy Road, Kolkata-700 025 West Bengal. .. Petitioner ..Vs..

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1.The Commissioner of Customs, Sea Port (Imports) Custom House, No.60, Rajaji Salai, Chennai - 600 001.

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2.The Additional Commissioner of Customs, Sea Port (Imports) Custom House, No.60, Rajaji Salai, Chennai - 600 001.

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3.The Director General of Foreign Trade & Ex-Office Additional Secretary to the Government of India, Ministry of Commerce & Industry, Department of Commerce, New Delhi. .. Respondents

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Prayer: Writ Petition filed under Article 226 of the Constitution of India, praying to issue a Writ of Mandamus, directing the respondents 1 and 2 herein to permit the clearance of the 49 units of the second hand Digital Multifunction Print and Copying Machines imported vide Bill of Entry No.598517 dated 16.08.2010 under free as secondhand capital goods in terms of para 2.17 read with definition under para 9.12 of the Foreign Trade Policy of 2009-14 without

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imposing any restriction in the absence of any specific restriction in para 2.17 of the policy and 2.33 of the Handbook of procedures 2009-14 or any notification issued by the 3rd respondent restricting the import of the said goods under Section 5 read with Section 3(2) of the Foreign Trade (Development and Regulation) Act, 1992.

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For Petitioner : Mr.N.Viswanathan
For Respondents
R1 & R2 : Mr.A.P.Srinivas
Senior Panel Counsel
R3 : Mr.B.Rabu Manohar
O R D E R

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Heard Mr.N.Viswanathan, learned counsel appearing for the petitioner and Mr.A.P.Srinivas, learned Senior Panel Counsel appearing for the respondents 1 and 2 and Mr.B.Rabu Manohar, learned counsel appearing for the third respondent.

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2.The petitioner has sought for a direction upon the respondents to

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permit clearance of second hand Digital Multifunction Print and Copying Machines without imposing any restrictions in the absence of any restriction in para 2.17 of the Foreign Trade Policy 2009-2014 and 2.33 of the Handbook of Procedures 2009-2014 or any notification issued by the third respondent restricting the import of goods under Section 5 r/w. 3(2) of the Foreign Trade (Development and Regulation) Act, 1992.

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3.When the writ petition was admitted, an interim order was granted permitting the provisional release of the impugned goods with the direction to the petitioner to pay 25% of the enhanced value apart from paying duty @ 14.71% on the enhanced value. On complying with the condition, goods were directed to be released. The petitioner has complied with the condition and the goods have been released. Thus, the prayer sought for in the writ petition has been partially granted and what is required to be seen is whether the goods in question could be permitted to be cleared without any restriction as according to the petitioner, there is no such restriction in the Foreign Trade

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Policy or in the Handbook of Procedures 2009-2014.

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3.The case of the petitioner is that in terms of DGFT Notification No.31/2005 dated 19.10.2005 amending para 2.17, there is no restriction for importing old and used digital multifunction print and copying machines and the goods are freely importable in terms of definition under para 9.12 of Foreign Trade Policy 2009-2010. The Department on the other hand would submit that the Notification No.31/05 permits import of second hand capital goods including refurbished/reconditioned and spares shall be allowed freely. However, second hand personal computers/laptops, photocopier machines, air conditioners and diesel generating sets will only be allowed against a license .

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The respondents seek to bring digital multifunction print and copying machines

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as a photocopier machine and a printer and license is required. It is further contended that in terms of Notification No.35 dated 28.02.2013, the Government amended para 2.17 of the Foreign Trade Policy that under the head second hand goods in the category of second hand capital goods, import of digital multifunction print and copying machine was permissible only against

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authorization.

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4.In the light of the amendment to the notification which according to

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the respondents would have effect from the date of the original notification where goods are freely importable, in my considered view this need not be answered in this writ petition as this requires adjudication into the factual position and certain other legal issues are also to be considered in the light of the stand taken by the revenue. The Hon'ble Division Bench in the case of

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Commissioner of Customs (Sea Port-Import), Chennai vs. City Office Equipments reported in (2016) 336 ELT 19 (Mad) considered the correctness of an interim order passed in a writ petition filed for a similar prayer. Before the Division Bench, the Revenue relied upon notification No.35 dated 28.02.2013 and other decisions and ultimately the appeal filed by the revenue against the interim order was dismissed upholding the order permitting the release of the goods with a direction to the importer to furnish a bond for the duty or penalty that may be imposable on adjudication and to furnish a reply

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to the show cause notice and participate in the consequential adjudication.

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5.In my considered view, a similar direction can be issued in the present

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writ petition as well. However, I find that even before issuance a show cause notice writ petition has been filed. Therefore, there will be a direction to the respondents to issue a show cause notice to the petitioner permitting them to file their objections and if there is any duty or penalty imposable as proposed in the show cause notice, the petitioner shall furnish a personal bond for the

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said value and the adjudicating authority after hearing the parties in person passed a reasoned order on merits and in accordance with law. The petitioner is entitled to canvas all points including the applicability or otherwise of

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notification No.35 dated 28.02.2013.

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6.With the above direction, the writ petition stands disposed of.

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No costs. Consequently, connected miscellaneous petition is closed.

10.11.2017

cse

Index:Yes/No

Internet:Yes/No

Speaking/Non-speaking Order

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T.S.SIVAGNANAM, J.

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cse

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1.The Commissioner of Customs, Sea Port (Imports) Custom House, No.60, Rajaji Salai, Chennai - 600 001.

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2.The Additional Commissioner of Customs, Sea Port (Imports) Custom House, No.60, Rajaji Salai, Chennai - 600 001. 3.The Director General of Foreign Trade & Ex-Office Additional Secretary to the Government of India, Ministry of Commerce & Industry, Department of Commerce, New Delhi.

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W.P.No.19635 of 2010 and M.P.No.1 of 2010

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10.11.2017

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http://www.judis.nic.in

M/S.Ace Digital Systems v. the Commissioner of Customs

Case brief

What is this about?

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M/S.Ace Digital Systems v. the Commissioner of Customs

Case brief

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