Legal principle

Whether imported goods meet an exemption or import policy condition is tested on the law in force on the date the Bill of Entry is presented (Section 15), and a later amendment without express retrospective effect cannot be used to confiscate them.

Court decision

The writ petition was allowed. The Order-in-Original dated 15.07.2026 was set aside so far as it treated the goods as prohibited or restricted, confiscated them under Section 111(d) and imposed redemption fines and penalty. Customs must release the goods on the conditions set in the earlier Arka Business Solutions case: the importer pays the enhanced duty quantified by customs within one week, and goods are released within four weeks of payment. Valuation was left open for the parties to pursue.

Facts

Arka Business Solutions imported 73 used Digital Multi-Function Devices (MFDs) from the USA and filed Bill of Entry No.9677159 on 04.06.2026 at ICD Thimmapur. Customs examined the goods on 19.06.2026 and found them matching the declaration. A Chartered Engineer appointed by customs certified they were working second-hand capital goods, not e-waste, each weighing over 80 kg, so they met the Highly Specialised Equipment (HSE) exemption in Paragraph 8 of the Compulsory Registration Order, 2021 (CRO 2021). Still, a show cause notice dated 25.06.2026 alleged no DGFT authorisation under Para 2.31 of the Foreign Trade Policy 2023 and no BIS registration. By order dated 15.07.2026 the Additional Commissioner confiscated all goods under Section 111(d), treating 36 units as prohibited (re-export only, fine Rs.1,33,257) and 37 units as restricted (fine Rs.3,95,021), using an all-India 100 units per model limit. The importer filed a writ petition.

Key provisions

• Section 15, Customs Act, 1962 — Date for determination of rate of duty and tariff valuation of imported goods
• Section 111(d), Customs Act, 1962 — Confiscation of improperly imported goods etc