2012 (4) TMI 68 - HC - Customs

Court orders release of imported Digital Multifunction Machines upon payment of duties and inspection.

The court ordered the release of the detained imported second-hand Digital Multifunction Print and Copying Machines upon payment of appropriate customs ... Classification of imported second hand digital multifunction print and copying machines as hazardous waste under the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008 and Basel No.B1110 - provisional release of imported goods on payment of duty and furnishing of provisional duty bonds pending final assessment under Section 18 of the Customs Act, 1962 and Customs (Provisional Duty Assessment) Regulations, 1963 - obligation of customs to permit inspection by authorised chartered engineers and to complete inspection and release expeditiously - requirement of prior permission from the Ministry of Environment and Forests for import where goods are classified as hazardous wasteClassification of imported second hand digital multifunction print and copying machines as hazardous waste under the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008 and Basel No.B1110 - requirement of prior permission from the Ministry of Environment and Forests for import where goods are classified as hazardous waste - Used second hand Digital Multifunction Print and Copying Machines imported by the petitioners are not to be treated as 'Hazardous Waste' falling under Basel No.B1110 Part B of Schedule III to the Hazardous Waste Rules, 2008, and therefore do not, on the material before the Court, attract prohibition or require prior MoEF permission. - HELD THAT: - The Court examined the material, including inspection reports of authorised chartered engineers and the minutes of the Technical Review Committee, and found no sufficient evidence to classify the imported machines as mere Electrical or Electronic Assemblies or as hazardous waste under Rule 3(1)(iii) read with Basel No.B1110 of Part B of Schedule III. The reports indicated functional machines with a residual life of at least five years and there was no independent assessment by the Tamil Nadu Pollution Control Board to characterise the imports as hazardous. The Court also noted that multifunction devices were not then placed in the restricted category and that the Technical Review Committee had only proposed consideration for future restriction. On this material the respondents failed to demonstrate that prior permission from the Ministry of Environment and Forests was mandatorily required for these imports. [Paras 24, 25, 26, 27]The imported used Digital Multifunction Print and Copying Machines cannot be treated as hazardous waste under the Hazardous Waste Rules and need not be treated as prohibited for import on the basis of the material before the Court.Provisional release of imported goods on payment of duty and furnishing of provisional duty bonds pending final assessment under Section 18 of the Customs Act, 1962 and Customs (Provisional Duty Assessment) Regulations, 1963 - obligation of customs to permit inspection by authorised chartered engineers and to complete inspection and release expeditiously - Where the imported machines have already been inspected by authorised chartered engineers, customs are directed to release the goods on payment of appropriate customs duty subject to adjudication; where inspection is yet to occur, customs shall direct inspection and release the goods after inspection on payment of duty and fulfillment of legal conditions, completing release within ten days of inspection. - HELD THAT: - Petitioners sought provisional release under Section 18 and the Provisional Duty Assessment Regulations, alleging undue detention and demurrage. Having held that the machines are not hazardous waste, the Court directed that goods already inspected by authorised chartered engineers be released upon payment of appropriate duty, subject to subsequent adjudication under law. For goods not yet inspected, the Court directed the customs authorities to effect inspection and thereafter release the goods on payment of duty and compliance with statutory conditions. The Court also observed that petitioners may make requests under the Handling of Cargo in Customs Area Regulations, 2009 for waiver of detention and demurrage charges, and mandated that releases occur expeditiously, not later than ten days after completion of inspection. [Paras 4, 28, 29]Customs shall release the imported machines on payment of appropriate customs duty and subject to adjudication; where inspection remains outstanding, customs shall inspect and release the goods, in any event completing release within ten days of inspection.Final Conclusion: Writ petitions allowed to the extent indicated: the imported used Digital Multifunction Print and Copying Machines were held not to be hazardous waste on the material before the Court, and the customs authorities were directed to inspect (where necessary) and release the goods on payment of appropriate duty subject to adjudication, with release to follow expeditiously and in any event within ten days after inspection; no costs. Issues Involved:1. Detention of imported second-hand Digital Multifunction Print and Copying Machines by customs authorities.2. Requirement of import licenses and permissions under various regulations.3. Classification of the imported goods as 'Hazardous Waste'.4. Financial losses due to detention and demurrage charges.5. Compliance with customs assessment and examination procedures.Detailed Analysis:1. Detention of Imported Goods:The petitioners imported second-hand Digital Multifunction Print and Copying Machines under various Bills of Entry. The customs authorities detained these goods without providing proper reasons. The petitioners sought the release of the goods upon payment of applicable customs duties based on declared values and provisional duty bonds pending final assessment as per Section 18 of the Customs Act, 1962, and Customs (Provisional Duty Assessment) Regulations, 1963.2. Requirement of Import Licenses and Permissions:The petitioners argued that the imported machines were classified as second-hand capital goods and were freely importable under Paragraph 2.17 and 9.12 of the Foreign Trade Policy and Paragraph 2.33 of the Hand Book of Procedures 2009-14. However, the customs authorities insisted on the production of import licenses and permissions from the Ministry of Environment and Forests, citing the Hazardous Waste (Management, Handling, and Transboundary Movement) Rules, 2008. The authorities claimed that the machines fell under the category of hazardous waste and required specific permissions.3. Classification as 'Hazardous Waste':The customs authorities classified the imported machines as hazardous waste under Rule 3(1)(iii) of the Hazardous Waste Rules, 2008, arguing that they were electrical and electronic assemblies subject to hazardous waste regulations. The petitioners countered this by stating that the machines were functional with a residual life of five years, as per the inspection report by Inspectorate Griffith India Pvt. Ltd., and did not qualify as hazardous waste. The court found that the machines did not fall under the hazardous waste category, as the respondents failed to provide sufficient evidence to support their classification.4. Financial Losses Due to Detention and Demurrage Charges:The petitioners highlighted the financial losses incurred due to the delay in the clearance of goods, resulting in detention and demurrage charges. The court acknowledged the petitioners' financial hardships and directed the customs authorities to expedite the release of the goods upon payment of appropriate customs duties.5. Compliance with Customs Assessment and Examination Procedures:The customs authorities argued that the petitioners had not complied with the necessary requirements for the examination and assessment of the goods. They emphasized the need for examination by approved chartered engineers and the production of relevant records. The court directed the customs authorities to release the goods that had already been inspected by authorized chartered engineers upon payment of customs duties. For goods not yet inspected, the court instructed the authorities to facilitate the inspection and subsequent release upon fulfillment of legal conditions.Conclusion:The court ordered the release of the detained goods upon payment of appropriate customs duties and completion of the necessary inspection procedures. The court also allowed the petitioners to request the waiver of detention and demurrage charges as per Regulation 6 of the Handling of Cargo in Customs Area Regulations, 2009. The writ petitions were thus ordered accordingly, with no costs, and connected miscellaneous petitions were closed.