Atul Automation Private Limited Vs Principal Commissioner of Customs (CESTAT Kolkata)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, decided a group of appeals challenging provisional release orders passed by the Principal Commissioner of Customs, Port Commissionerate, Kolkata. The appeals arose from the provisional release of four consignments of “Used Highly Specialized Equipment Digital Multifunction Print & Copying Machines” imported by different importers, where the authorities withheld the provisional release of 63 machines in total while allowing release of the remaining goods against provisional duty bond and bank guarantee. The withheld quantities comprised 21, 28, 7, and 7 machines from the four consignments respectively.
The importers had filed Bills of Entry for clearance of the goods, which were subjected to 100% examination in the presence of a government-approved Chartered Engineer and customs officers. The examination confirmed that the goods were old and used as declared, and that the description, make, model, and quantities matched the declarations. Despite this, the consignments were seized under Section 110(1) of the Customs Act, 1962, on the ground that the goods were restricted and liable to confiscation under Section 111 of the Act.
As adjudication was expected to take time and to avoid demurrage, the importers sought provisional release of the goods. The customs authorities informed them that under the Electronics and Information Technology Goods (Requirements for Compulsory Registration) Order, 2021, and the exemption for Highly Specialized Equipment (HSE), only 100 units per model per calendar year were permitted. Customs applied this limit by counting the imports of a particular model collectively through Kolkata Port by all importers. On this basis, the authorities withheld provisional release of those machines that exceeded the 100-unit model-wise limit, while allowing release of the balance. Although the importers disputed this interpretation and contended that the 100-unit limit applied importer-wise, they accepted the provisional release conditions to secure partial release of goods.
