2010 (7) TMI 345 - AT - Customs

Imported Used Lubricating Oil Not Hazardous Waste: Tribunal Reverses Confiscation

OM UDYOG Versus COMMISSIONER OF CUSTOMS, AMRITSAR

The tribunal held that the imported used lubricating oil should not be classified as hazardous waste oil. The requirement for a No Objection Certificate ... Confiscation – Import without NOC from Pollution Control Board – Import of used/waste oil - no evidence that the used oil imported can be considered as waste oil - report of Punjab Test House where the testing was done as approved by CBEC, is not in favour of the Department - The report of CRCL is non-committal on this issue - clarification of Ministry of Environment and Forests is in the nature of general opinion without reference to specific samples - order of the Commissioner is set aside - appeal is allowed Issues Involved:1. Classification of imported used lubricating oil as hazardous waste oil.2. Requirement of No Objection Certificate (NOC) from the Pollution Control Board.3. Compliance with EXIM Policy and Hazardous Waste (Management & Handling) Rules.4. Validity of laboratory reports and their implications.5. Appellant's status as a trader or actual user.6. Penalty and confiscation of goods.Issue-wise Detailed Analysis:1. Classification of Imported Used Lubricating Oil as Hazardous Waste Oil:The primary issue was whether the imported used lubricating oil should be classified as hazardous waste oil under the Hazardous Waste (Management & Handling) Rules, 1989. The department argued that used oil should be treated as waste oil, citing the case of Oil Processors Pvt. Ltd. v. CC, Mumbai, which held no distinction between used oil and waste oil. However, the tribunal found that the submissions on behalf of the department that every 'used oil' should be treated as 'waste oil' cannot be accepted. The tribunal noted that a product can become waste without being used, and every used product need not be waste, emphasizing the need for specific evidence to classify used oil as waste oil.2. Requirement of No Objection Certificate (NOC) from the Pollution Control Board:The department maintained that the import of waste oil required a valid NOC from the State Pollution Control Board. The tribunal examined the reports from CRCL and Punjab Test House, which indicated that the imported oil was not hazardous or toxic and did not fall under the waste category. The tribunal concluded that the requirement of an NOC was not warranted as the imported oil was not classified as waste oil.3. Compliance with EXIM Policy and Hazardous Waste (Management & Handling) Rules:The tribunal reviewed the EXIM Policy and the Hazardous Waste (Management & Handling) Rules, which refer to waste oil only. The tribunal found that the department's reliance on the opinion of the Pollution Control Board and the Ministry of Environment and Forests was based on a presumption that used oil equates to waste oil. The tribunal held that this presumption was not supported by the evidence and clarified that the used oil imported by the appellants did not violate the EXIM Policy or the Hazardous Waste Rules.4. Validity of Laboratory Reports and Their Implications:The tribunal considered the reports from CRCL and Punjab Test House. The CRCL report indicated that the sample was not an oil emulsion and was free from hazardous compounds, recommending further consultation with the Ministry of Environment and Forests. The Punjab Test House report confirmed that the sample was not hazardous or toxic and safe for storage, handling, and use. The tribunal noted that the CBEC had permitted testing by government-approved laboratories, and the Punjab Test House was authorized for such analysis. The tribunal found no reason to disregard the Punjab Test House report, which was not contradicted by any other laboratory report.5. Appellant's Status as a Trader or Actual User:The department alleged that the appellant was a trader, not an actual user, and thus required an NOC for import. The tribunal acknowledged that the appellant had not provided evidence to counter this allegation. However, the tribunal emphasized that this issue was relevant only if the imported goods were classified as waste oil. Since the tribunal concluded that the imported oil was not waste oil, the appellant's status as a trader did not impact the case's outcome.6. Penalty and Confiscation of Goods:The original authority had confiscated the goods and imposed a penalty, which was challenged by the appellants. The tribunal noted that the goods were released to the appellants after granting out of charge by Customs, indicating no evidence of hazardous nature. The tribunal found no justification for the confiscation and penalty, as the imported oil was not classified as waste oil. The tribunal set aside the order of the Commissioner and allowed the appeal with consequential relief as per law.Conclusion:The tribunal concluded that the used lubricating oil imported by the appellants could not be classified as hazardous waste oil. The requirement for an NOC from the Pollution Control Board was not warranted, and there was no violation of the EXIM Policy or Hazardous Waste Rules. The laboratory reports supported the appellants' case, and the tribunal found no justification for the confiscation and penalty. The appeal was allowed with consequential relief as per law.