Provisional Release of Imported Second-Hand Copiers Allowed Despite Alleged Non-Compliance with BIS & DGFT Norms: CESTAT

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh Bench, has held that imported goods cannot be denied provisional release merely on the ground of alleged non-compliance with Bureau of Indian Standards (BIS) registration and Directorate General of Foreign Trade (DGFT) authorization requirements, especially when adjudication is still pending. The bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) law does not distinguish between prohibited and non-prohibited goods for the purpose of provisional release. At the stage of seizure, goods are only alleged to be prohibited; such classification must be conclusively determined through adjudication. Reliance on CBIC Circular restricting provisional release was held to be inconsistent with statutory provisions and judicial precedents. Multiple High Court and Supreme Court decisions have permitted provisional release even in cases involving alleged violations of import conditions. The appellant, M/s Global Copier System, had imported 230 units of second-hand digital multi-functional print and copying machines, valued at approximately ₹40.17 lakh, and filed a Bill of Entry for their clearance. During examination, Customs authorities observed that the importer did not possess DGFT authorization or BIS registration, which they considered mandatory for such goods. Further, a locally appointed Chartered Engineer opined that the imported machines were multi-functional devices and not “Highly Specialized Equipment” (HSE), thereby denying the benefit of exemption claimed by the importer. Consequently, the goods were seized on the belief that they were liable for confiscation, and the request for provisional release was rejected by both the adjudicating authority and the Commissioner (Appeals). The importer contended that the goods were freely importable under the ITC (HS) classification and that the mere requirement of BIS registration or DGFT authorization does not render goods “prohibited” per se. It was further argued that non-compliance with procedural requirements does not bar provisional release under Section 110A of the Customs Act, 1962. The Foreign Trade Policy (FTP) does not classify such goods as absolutely prohibited. Several High Courts and the Supreme Court have permitted provisional release in similar cases involving second-hand multifunction devices. The authorities failed to properly consider submissions and judicial precedents cited during adjudication The importer also emphasized that no allegation of fraud, misdeclaration, or concealment had been made by the department. The department argued that the goods were “deemed prohibited” under Section 2(33) of the Customs Act due to non-compliance with statutory conditions such as DGFT authorization and BIS registration. It relied on judicial precedents to assert that conditional restrictions, if violated, render goods prohibited. Further, it was contended that the exemption for HSE was not applicable since the Chartered Engineer had classified the goods as multifunction devices rather than specialized equipment. The Tribunal narrowed the issue to whether alleged non-compliance with FTP and CRO 2021 provisions could justify denial of provisional release. The Tribunal noted that no substantial risk to public health or safety was shown to justify continued detention of goods. Importantly, the Tribunal observed that denying provisional release solely on the basis of alleged prohibition would defeat the purpose of Sections 110A and 125 of the Customs Act. Allowing the appeal, the Tribunal directed that the goods be released provisionally within two weeks, subject to the various conditions: Payment of applicable customs duty; Execution of a bond equivalent to the value of the goods; and Submission of a bank guarantee equal to 30% of the applicable duty. Case Details Case Title: M/s Global Copier System Versus Commissioner of Customs, Ludhiana Citation: JURISHOUR-783-CES-2026(CHAN) Case No.: Customs Appeal No. 60031 of 2026 Date: 13.04.2026 Counsel For Appellant: Saurabh Kapoor, Ms. Muskaan Gupta and Ms. Tanya Kumar Counsel For Respondent: Anurag Kumar, Authorized Representative Click Here To Read Order Read More: Construction of Warehouses for HSWC Taxable as Commercial Service: Supreme Court Quashes Penalty

Provisional Release of Imported Second-Hand Copiers Allowed Despite Alleged Non-Compliance with BIS & DGFT Norms: CESTAT

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