M/S ATUL COMMODITIES PVT. LTD. & ORS. versus COMMISSIONER OF CUSTOMS, COCHIN-9

Citation: [2009] 3 S.C.R. 589 · Decided: 24-02-2009 · Supreme Court of India · Bench: S.H. KAPADIA · Disposal: Dismissed

Judgment (excerpt)

[2009] 3 S.C.R. 589 
MIS ATUL COMMODITIES PVT. LTD. & ORS. 
A 
v. 
COMMISSIONER OF CUSTOMS, COCHIN-9 
(Civil Appeal NO. 2999 of 2007) 
FEBRUARY 24, 2009 
[S.H. KAPADIA AND H.L. DATTU, JJ.] 
B 
Export-Import: FTP 2004-09 - Para 2. 17 - Second hand 
photocopier machines - Import of, under the category of 
'general imports', in January 2005 - Held: It is restricted item 
C 
for import under para 2. 17 of FTP 2004-09 - By amendment 
Notification No. 31 dated 19.10.2005 issued by the Central 
Government under s.5 of 1992 Act, import of second-hand 
photocopying machines under the "general" category came 
under the "restricted" category of imports - Hence, after o 
19.10.2005, second-hand photocopying machines came 
within the "restricted" category- Foreign Trade (Development 
and Regulation) Act, 1992 - s.5 - Handbook of Procedures 
2002-07- Para 2.33- Notification No. 31dated19.10.2005. 
Foreign Trade (Development and Regulation) Act, 
E 
1992: s.5 - Change of categorization of items from category 
of free to category of restricted imports can only be done by 
an amendment to the policy - s. 5 empowers only Central 
Government to amend the Policy - This power is not given 
to DGFT - It is not open to DGFT to issue circulars to change 
F 
categorization - FTP 2004-09 - Para 2. 17. 
Circulars/Government orders/Notifications: Circulars 
are clarificatory and not amendatory in nature. 
Import of second hand photocopier machines took 
place in January 2005 under the category of 'general 
imports'. Question is whether it is restricted item for 
import under para 2.17 of current FTP 2004-09. 
G 
589 
H 
590 
SUPREME COURT REPORTS 
[2009] 3 S.C.R. 
A 
Allowing the appeal of assessee and dismissing the 
' . 
appeals of Department, the Court 
HELD: 1.1. On 31.8.2004, the Central Government by 
Notification No. 1/2004-09 notified the FTP 2004-09. The 
B Policy came into force from 1.9.2004. That Policy came 
to be amended by Notification No. 31 dated 19.10.2005 
.. 
issued by the Central Government under Section 5 of the 
Foreign Trade (Development and Regulation) Act, 1992 
,. 
by which import of second-hand photocopying machines 
... 
c 
imported under the "general" category came under the 
"restricted" category of imports, which made the importer 
to import the said machine only against a licence issued 
in that behalf. Such a restriction could be placed only by 
an Amendment and not by Policy Circulars. Hence, after 
19.10.2005, second-hand photocopying machines came 
D within the "restricted" category. Such a change of 
category took place by way of Amendment by Central 
Government under Section 5 of the 1992 Act. On the other 
hand, the three administrative/policy circular Nos. 16/03, 
19/03 and 20/05 only refer to clarifications issued by 
E DGFT pursuant to representations received by him from 
the Trade. These circulars are clarificatory and not 
amendatory in nature. Therefore, under the scheme of the 
Statute, one finds a clear demarcation between an 
• 
amendatory provision and a clarificatory provision. [Para 
F 18] [615-D-H; 616-A-B] 
1.2. Section 5 of the 1992 Act contemplates 
amendment to the FTP. It empowers only the Central 
Government to amend the Policy. This power is not given 
G to the DGFT. It is not open to DGFT .to issue circulars to 
change categorization of items from the category of 
"free" to the category of "restricted" imports. This aspect 
is important for two reasons. Firstly, notification no. 31 
dated 19.10.2005, is an amendment to the Policy. It 
H 
operates only from 19.10.2005. It recites that second-hand 
ATUL COMMODITIES PVT. LTD. & ORS. v. 
591 
COMMISSIONER OF CUSTOMS, COCHIN-9 
capital goods were importable freely. The Notification 
A 
states that after 19.10.2005, however, import of second-
... 
hand photocopying machines would be allowed only 
against a licence. This amendment pre-supposes that 
photocopying machines are kept out of the purview of 
"second hand capital goods" only after 19.10.2005. 
B 
Secondly, broadly imports fall in two categories - general 
and restricted categories including prohibited category. 
,.. 
When there is change of categorization, it can be done 
only by an amendment. This has been done by 
notification no. 31 dated 19.10.2005. It is only by c 
Amendment that import of second-hand photocopying 
machines can be kept out of the definition of "second-
hand capital goods". [Para 18] [616-B-F] 
2.1. Both the circulars 16/03 and 19/03 referred to FTP 
(2002-07)

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