2009 (4) TMI 826 - HC - Customs

Confiscation upheld under Customs Act due to non-compliance with import conditions

The court upheld the confiscation of 'Druid' under Section 111(d) of the Customs Act, 1962, due to non-compliance with import conditions, specifically ... Whether the Tribunal is right in holding that confiscation of ‘Druid’ under Section 111(d) of the Customs Act, 1962 is ‘is not’ sustainable on the ground that as per para 4.2.7 of the Foreign Trade Policy goods imported for jobbing in terms of a Notification, do not require a licence, certificate or permission? Held that:- If we employ the meaning of the word “prohibition” as was done in Om Prakash Bhatia case [2003 (7) TMI 74 - SUPREME COURT OF INDIA] we have to hold that the imported ‘druid’ was ‘prohibited goods’ since the respondent is not an eligible passenger as he did not satisfy the conditions. The impugned order deserves to be set aside. In view of the above decision, the order dated 30-4-2008 consequent to the order of remand also is set aside. Since we are of the opinion that the conclusion of the Tribunal was wrong and the order of remand was also erroneous. The substantial question of law is answered in favour of the Revenue and the confiscation under Section 111(d) must be sustained since the goods are ‘prohibited goods’. The appeal is allowed. The order of remand is set aside. Consequently the order dated 30-4-2008 must be set aside. Issues Involved:1. Confiscation of 'Druid' under Section 111(d) of the Customs Act, 1962.2. Compliance with the Foreign Trade Policy and Import Licensing requirements.3. Environmental impact and registration with the Ministry of Environment and Forests.4. Validity of the Tribunal's remand order.5. Legal implications of delayed appeal processing.Issue-wise Detailed Analysis:1. Confiscation of 'Druid' under Section 111(d) of the Customs Act, 1962:The core issue was whether the Tribunal was correct in holding that the confiscation of 'Druid' under Section 111(d) of the Customs Act, 1962 was unsustainable. The respondents imported a consignment described as 'Lead covered Copper cable Scrap 'Relay'' for job work under Notification No. 32/97. Upon examination, it was found that 40% of the consignment consisted of PVC/plastic insulated copper cables/wires, classified as 'Druid,' which are restricted goods. The importer was not registered with the Ministry of Environment and Forests, making the import contrary to licensing requirements. The Commissioner (Appeals) upheld the confiscation under Section 111(d) and 111(m) due to misdeclaration and violation of import conditions.2. Compliance with the Foreign Trade Policy and Import Licensing requirements:The Tribunal referred to para 4.2.7 of the Foreign Trade Policy, which allows the import of restricted goods for job work without a license, certificate, or permission. However, the Commissioner (Appeals) noted that the importers were not registered with the Ministry of Environment and Forests, which is a requirement under the Import Licensing notes to Chapter 74. The Tribunal's interpretation was deemed superficial as it overlooked the environmental regulations and the necessity for registration.3. Environmental impact and registration with the Ministry of Environment and Forests:The Commissioner (Appeals) emphasized the environmental concerns associated with importing hazardous waste like 'Druid.' The import policy mandates registration with the Ministry of Environment and Forests to safeguard against hazardous waste imports. The Tribunal failed to consider the environmental impact and the stringent procedures under the Hazardous Waste Management Rules, which require approval from the State Pollution Board and the Ministry of Environment and Forests.4. Validity of the Tribunal's remand order:The Tribunal's remand order directed de novo adjudication, which was contested by the Department. The appeal was delayed but eventually processed, and the remand order was challenged. The court cited precedents to assert that the appeal against the remand order remains valid even if the order has been implemented. The court held that if the remand order is set aside, all consequential proceedings would be nullified.5. Legal implications of delayed appeal processing:The delay in processing the appeal and obtaining an interim stay did not invalidate the Department's right to challenge the remand order. The court referenced several cases, including Union of India v. Ram Kumar Thakur, to affirm that implementing an order to avoid contempt does not render the appeal infructuous. The appeal was decided on merits, and the court found the Tribunal's conclusion erroneous.Conclusion:The court concluded that the confiscation under Section 111(d) must be sustained as the goods were 'prohibited goods' due to non-compliance with import conditions. The substantial question of law was answered in favor of the Revenue, and the Tribunal's remand order was set aside. The appeal was allowed, and the order dated 30-4-2008 was also set aside. The connected miscellaneous petition was closed without any order as to costs.