2011 (6) TMI 75 - AT - Customs

Court Waives Pre-deposit for Penalty, Allows Trading Hazardous Goods

M/s. Shivam International & others Versus Commissioner of Customs, Chennai

The court waived the requirement of pre-deposit of balance penalty amounts for all cases, considering factors such as penalties paid and goods still with ... Application for stay - Confiscation - it is clear that according to the Chartered Engineer, 85% of the computers imported are directly usable and only 15% of the same are non-functional going by the random sample examination undertaken by him - Appellant also brought on record details of similar imports earlier made by the appellants as well as others and such imports have been regularly allowed without treating such used computer systems as hazardous waste - Appeal is allowed by way of remand Issues Involved:1. Pre-deposit of penalties and waiver of balance amounts.2. Confiscation of imported goods deemed hazardous waste.3. Competency of the Chartered Engineer's report.4. Interpretation of hazardous waste regulations.5. Import of used computer systems under Foreign Trade Policy.Analysis:Issue 1: Pre-deposit of penalties and waiver of balance amountsThe appellants had paid 10% of the penalties imposed before the appeals were heard, with the lower appellate authority reducing penalties by 50%. The goods were still with the Department, and the appellants had not exercised the option for redemption for export. Considering these factors, the requirement of pre-deposit of the balance penalty amounts was waived for all four cases.Issue 2: Confiscation of imported goods deemed hazardous wasteThe imported consignments of used computer systems were confiscated on grounds of being hazardous waste and mis-declaration. The original authority allowed redemption of the confiscated goods on payment of fines. The Chartered Engineer's report indicated that a portion of the computers were non-functional, potentially leading to e-waste generation if refurbished. However, the appellants were traders intending to sell the goods without refurbishing, catering to a market for affordable computers.Issue 3: Competency of the Chartered Engineer's reportThe Chartered Engineer's report was pivotal in the case, highlighting the potential e-waste generation if the computers were refurbished. However, the Engineer was not authorized under relevant environmental laws, and no certification of hazardous waste was obtained from competent authorities. The report's apprehensions regarding e-waste generation were not aligned with the appellants' trading intentions.Issue 4: Interpretation of hazardous waste regulationsThe lower authorities attempted to categorize the imported goods as hazardous waste based on the Engineer's report, despite lacking certification from competent authorities. The goods had been in customs control for a year without posing hazards, and the imports were not intended for disposal as hazardous waste but for trading purposes.Issue 5: Import of used computer systems under Foreign Trade PolicyAcknowledging that secondhand personal computers/laptops cannot be freely imported under the Foreign Trade Policy, the appellants were willing to pay fines and penalties for such imports. The judgment set aside the impugned orders, remanding the cases for re-adjudication based on Foreign Trade Policy violations and clearance on payment of applicable duty, fine, and penalty.In conclusion, the judgment focused on the misinterpretation of the imported goods as hazardous waste, emphasizing the trading intentions of the appellants and the absence of certification from competent authorities. The decision highlighted the need for adherence to regulatory frameworks and proper adjudication based on relevant trade policies.