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2021 (11) TMI 127
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.... imported goods found as hazardous waste shall be re- exported by the importer at his own expense in view of the provisions of Rule 17 of Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008, immediately. However as the goods have been held liable for confiscation, the goods shall be redeemed by the importers for exporting them after paying a fine of Rs. 50,000/- (Rupees Fifty Thousand) under section 125(1) of the Customs Act, 1962. (iii) I impose a penalty of Rs. 10,000/- (Rupees Ten Thousand) is imposed on M/s Chander Chemicals Co., Mandi Road, Near Neem Chakki, Jalandhar under Section 112 of the Customs Act,1962." 2.1 Appellant imported 44306.90 kg of Lubricant Oil - Open Gear vide invoice number 182956298 257511 dated 12.10.2014 issued by M/s Salvex, 723 Main Sr. STE 600 Houston TX 77002 United States at a unit price of USD 0.101564 per kgs. For the clearance he filed bill of entry No. 8060152 dt. 21.01.2015 declaring assessable value of Rs. 9,37,213/-involving duty of Rs. 1,90,170/- under tariff item 2710 1980 of Customs Tariff Act, 1985. 2.2 Three samples drawn from impugned consignment were sent to CRCL, New Delhi vide 3 test mem....
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....0 (seventy two deci zero) 6. Non Aromatic content 28.0 (twenty eight deci zero) 7. PAH content (mg/kg) 58.43 (fifty eight deci four three) 8. Acidity Nil 9. Sediments Nil 10. Water content Nil The sample falls under the category of hazardous waste as PAH content in the sample is more than prescribed limit. Sealed remnant returned 2.3 The appellant vide his letter dated. 15.05.2015 contested the test reports and on the basis of the arguments raised by the appellant, Deputy Commissioner vide his letter dated 10.06.2015 sought clarifications from Chief Chemical Examiner, CRCL New Delhi. 2.4 The Chemical Examiner, CRCL, New Delhi vide his letter dated 22.06.2015 replied stating that concentration of PAH have been found more than specified limit i.e. 50 mg/kg of Schedule II of Class A, therefore, the product under reference are hazardous waste as they are listed under Schedule I (SNo. 1) and Basal No. 3020 and have also characteristics of E of Schedule II and H of Part C Schedule III of HW Rules, 2008. 2.5 A show cause notice C. No. 82/CSCN/Ldh/2015 was issued to the appellant dated 31.05.2015 on the grounds that that as....
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....confiscation and re-export of goods on payment of redemption fine of Rs. 50,000/- and penalty of Rs. 10,000/- imposed. 2.10 Commissioner (Appeals) has by the impugned order referred to in para 1, supra, rejected the appeal of appellant. Hence, the present appeal. 3.1 We have heard Shri Sudhir Malhotra, Advocate for the appellant and Shri Dhindsa, Assistant Commissioner, Authorized Representative for the revenue. 3.2 Arguing for the appellant learned counsel submitted as follows:- * This is a second round of litigation before Hon'ble CESTAT. Earlier the Hon'ble Bench by referring letter dt. 14.03.2016 of respondent to Chemical Examiner, remanded the case to ld. Adjudicating authority with the direction to decide the case after affording cross examination of Chemical Examiner. * The issue required determination in the case is whether impugned imported goods are hazardous waste or not as per Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008 (in short HW Rules, 2008). * The impugned goods have been held hazardous waste based upon Central Revenue Control Laboratory three test reports all dated 19.02.2015. * As directed by the CES....
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....n available on the website www.chevronlubricants.com and invoice raised by supplier, for adjudging the case against them when there is no such allegation in show cause notice. Thus the impugned order have gone beyond the scope of show cause notice * Certain clarifications were sought by the adjudicating authority from the Chemical Examiner after completion of the cross examination vide email dated 22.08.2018, in respect of the response to the question No 4. The query/ clarification sought and received was never disclosed to the appellant and has been relied upon by the authority while adjudicating the matter. Since this was never disclosed to the appellants the order in original has been passed in violation of the principles of natural justice. Impugned order has failed to consider this aspect. * Impugned order needs to be set aside. 3.3 Arguing for the revenue learned Authorized Representative while re-iterating the findings in the impugned order submits that,- * CRCL's test reports clarifications there upon, cross examination of the Chemical Examiner and clarificatory emails of the Chemical Examiner pursuant to the cross examination confirm goods to be hazardous ....
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....SC/0013/2005)]. 4.1 We have considered the impugned order along with the submissions made in appeal, during the course of arguments and the written submissions filed by both the sides. 4.2 Interestingly the issue is in respect of certain off specification goods imported by the appellant for which the Bill of Entry No 8060152 dtd 21.01.2015 was filed. There is no dispute in the matter in respect of classification or valuation of the goods i.e. relating to the assessment of the duty on the goods. The only dispute which is there is in respect of the nature of goods i.e., whether the imported goods are hazardous waste or otherwise." The issue has been lingering on for the last nearly seven years, and the goods alleged to be the hazardous waste continue to lie in the ICD, without any serious effort on the part of anyone to resolve and dispose of the goods, even when direction was given by the Hon'ble High Court of Punjab and Haryana in the CWP No 7856 of 2016, vide order dated 28.04.2016, directed for the decision in two months. Extracts from the order of Hon'ble High Court are reproduced below: 2. The petitioner imported Lubricant Oil-Open Gear on12.10.2014 and fil....
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....orted by the importer in terms of the Rule 17 of the said rules, at the importer‟s expense as has been held by my predecessor vide OIO dated 19.05.2016. Further since the imported goods are liable for confiscation, the importer is liable to penalty under section 112 of the Customs Act, 1962. 2.23 I also observe that while imposing fine under section 125 of the Customs Act, 1962, I note that the goods have been imported long time back in January 2015, and they would be liable to detention and demurrage. Besides, the goods are required to re-exported and as such the importer instead of making any profit on the goods, would be incurring losses. Therefore, a lenient view requires to be taken while imposing fine and penalty." 4.4 Rule 17 (2) of the Hazardous Waste Rules, 2008 read as under: "Rule 17 Illegal Traffic (2) In case of illegal import of the hazardous waste, the importer shall re-export the waste in question at his cost within a period of ninety days from the date of its arrival into India and its implementation will be ensured by the concerned State Pollution Control Board." 4.5 The provisions of Rule 17 (2) of the Hazardous Waste Rule....
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....nt has mainly alleged that CRCL, New Delhi was not having the facility to test the impugned goods to ascertain the hazardous character of the products till December 2015, and the samples were got tested from private laboratory i.e., M/s Avon Food Labs Pvt Ltd. I find that the plea of the appellant that the CRCL, got the samples tested from the private laboratory i.e., M/s Avon Food Labs Pvt Ltd. Does not sustain in view of the fact that CRCL has sub contracted the services of M/s Avon Food Labs Pvt Ltd. In pursuance of the Board Circular No 9/2009-Customs dated 23.02.2009 which is notified by the Ministry of Environment and Forest GOI under section 12(1) (b) and section 13 of the Environment (Protection) Act, 1986. The said agency is accredited for "Testing of PAH content in Petroleum Products" from National Accreditation Board for Testing and Calibration Laboratories as per standard of ISO/ IEC 17025/ 2005. 7.4 I further take up the issue wherein it has been alleged that the chemical examiner admitted that the contents i.e. Accnapthalene, Acenapthene, Flourine mentioned in RUD 5 do not fall under clause A12 to A15 of the Schedule II of the Hazardous Waste Rules, 2008, and h....
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....of petroleum oils or of goods obtained from bituminous minerals and whether it was lubricating oil or otherwise. 8. In view of the discussions made in the foregoing paras, I find that the impugned goods fall in the category of hazardous goods and thus reject the appeal filed by the appellant. The order in original no LDH-CUS-JC-RRG-024-18-19 dated 4.9.19 is upheld." 4.8 Entire dispute revolves around the test reports dated 09.02.2015 in respect of the three samples drawn by the department and sent to CRCL for testing. Undisputedly as has been admitted by the Chemical Examiner CRCL during cross examination, CRCL was not having the capability to test the hazardous waste, and hence the test was conducted by one private laboratory, M/s Avon Food Labs Pvt Ltd. For justifying the same Commissioner (Appeal) has referred to the CBEC Circular No 09/2009-Customs, which states as follows:- "Reference is invited to the Notification No. 35/2004-(N.T)- Customs dated 19.3.2004 and Board's Circular No. 31/2004-Cus dated 26/4/2004 regarding the import and export of hazardous wastes. As the field formations were facing certain difficulties in getting such consign....
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....s in dealing with the import/export consignments of hazardous wastes as and when required." This circular inter alia do not provide or permit CRCL, to opine on the basis of the test not conducted by them on the samples sent to them by the field formations. Further the circular also advices the field formations to seek assistance of SPCBs/ PCCs in dealing with the import/ export consignments of hazardous wastes as and when required. This advice is also in accordance with the Rule 17 (2) of Hazardous Waste Rule, 2008. From the facts it is not clear as to whether at any point of time, revenue has sought the assistance of the SPCBs/ PCCs, who as per the Rule 17 (2) of Hazardous Waste Rules, 2008 are the implementing authority for that provision. 4.10 During cross examination of Shri A K Maurya Chemical Examiner, CRCL New Delhi, following questions and their responses as recorded in order in original where by the doubt is raised in respect of the test reports are reproduced below: "Qn.2 I am showing you the test reports bearing CL No. 3952, 3953 and 3954 (I)/ 04.02.2015 dated 19.02.2015 i.e. RUD - 1 to 3 and letter C. No. 35/CUS/Corress/2013-14 dated 22.06.2015 i.e. RUD-5, signa....
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....d the capabilities to conduct such tests, then what stopped the adjudicating authority to get the samples retested when the entire dispute was in respect of the test reports? Even in the remand proceedings when the adjudicating authority was again seized with the issue and the appellant had during the cross examination raised this issue, why he did not got the samples re-tested? 4.12 The order of the adjudicating authority confiscating the goods and permitting them to be re-exported on payment of redemption fine is contrary to the decisions rendered by CESTAT in case of Pace India [2020 (372) ELT 442 (T)], wherein following has been held- "5.1. After considering the submissions of both the parties and perusal of the material on record, we find that the order of re- export of the goods on payment of redemption fine within 30 days and if not complied with, the goods will be disposed of as per the statutory provisions, is in excess of jurisdiction conferred by the Statute, because the provisions of the Customs Act do not provide for re-export of the imported goods on payment of redemption fine and therefore the adjudication order was beyond the statutory provisions of the Cust....
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....ics Company - 1996 (84) E.L.T. 401 (S.C.) in which it was held as under : "According to these sub-sections, a claim for refund or an order of refund can be made only in accordance with the provisions of Section 27 which inter alia includes the period of limitation mentioned therein. Mr. Hidayatullah submitted that the period of limitation prescribed by Section 27 does not apply either to a suit filed by the importer or to a writ petition filed by him and that in such cases the period of limitation would be three years. Learned Counsel refers to certain decisions of this Court to that effect. We shall assume for the purposes of this appeal that it is so, notwithstanding the fact that the said question is now pending before a larger Constitution Bench of nine Judges along with the issue relating to unjust enrichment. Yet the question is whether it is permissible for the High Court to direct the authorities under the Act to act contrary to the aforesaid statutory provision. We do not think it is, even while acting under Article 226 of the Constitution. The power conferred by Article 226/227 is designed to effectuate the law, to enforce the Rule of law and to ensure that the several a....
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....not specifically provide that an option may be given to redeem the goods for re-export. It empowers an adjudicating authority in case of goods the import or export of which is prohibited under Customs Act or under any law in force, to grant an option to pay in lieu of confiscation such fine as the said authority thinks fit. The provisions of this section equally apply to the goods to be exported as well as imported goods. Where the goods which have been tendered for export are ordered to be confiscated and an option to redeem the goods on payment of fine, it would follow that option is for the export of the goods. This is no doubt different from reexport. Re-export is a facility permitting export of goods which have already been permitted to be imported. Except in cases where import is prohibited by any law, those goods which have been imported may be permitted to be exported. The formal procedure of filing a shipping bill and observing other formalities relating to export of goods would have to be followed. There is no prohibition on the adjudicating authority from permitting re-export of the goods. When an adjudicating authority after ordering confiscation of imported goods permi....
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....these are the provisions which would come into play. If the owner gets the goods released after payment of redemption fine, he may either clear it for home consumption or re-export the same subject to the relevant rules. A permission granted for re-export on the basis of a request made by the owner of the goods is outside the purview of the adjudication proceedings, as mentioned above. We, therefore, answer the questions referred in the affirmative and hold that it is open to the adjudicating authority to impose redemption fine as well as penalty even when permission is granted for re-exporting the goods. The reference is answered as above." 4.5 Similarly in case of Kothari Filaments [2002 (144) E.L.T. 80 (Tri. - Kolkata)], on difference of opinion, majority view was expressed as follows: 21. It is relevant to note that while the Learned Member (judicial) holds that no redemption fine is imposable when re- export of goods is allowed, learned Member (Technical) does not hold otherwise. On the other hand, by interpreting the order of the Commissioner the Member (Technical) comes to the conclusion that no permission has been granted by the Commissioner to re-export and therefo....
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....he order of the Collector in the following manner : "The goods are confiscated, but the appellants are entitled to redeem the same on payment of Rs. 5000/-. Accordingly, we dispose of the appeal." In the above mentioned two cases challenge was against the imposition of redemption fine while permitting reexport and in both the cases the Tribunal modified the orders retaining that portion of the order directing confiscation and imposing redemption fine. Direction for re-export was vacated. The position of law as explained in the above decision is that once the redemption fine is paid and the confiscated goods are redeemed the importer becomes the full owner of the goods and it is open to him to deal with the goods as he desires either to use it in domestic consumption or to export the same subject to relevant rules. In the light of the above, there is justification in the view taken by the Learned Member (Technical) that the last sentence in paragraph 50(i) of the order may be treated as an observation with regard to the legal position. This is more so in view of the rejection of the prayer of the importer to release the goods for reexport in paragraph 49 of the order." 4.6 ....
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....Appeal) is totally silent on this vital aspect of permitting the goods to be re- exported against payment of redemption fine. 4.14 We find that serious doubt has been raised, on the face of invoice of supplier, M/s Salvex whereby they state that the goods have been sold on as is as where is basis, and are sold without the manufacturer's warranty etc, to the effect that the goods would be of hazardous nature. This invoice is the part of the proceedings from the day one. We find that though we are not in position to uphold the impugned order, we cannot shun the responsibility cast on us, to prevent the import of hazardous waste which may damage the flora, fauna and environment of our country. Hon'ble Supreme Court has time and again stated so in the following decisions that for causing the damage to environment the polluter pays: * Indian Council for Enviro-Legal Action vs. Union of India 1996(3) SCC 212 * Vellore Citizens' Welfare Forum vs. Union of India 1996(5) SCC 647 * The Oleum Gas Leak case (M.C. Mehta vs. Union of India) AIR 1987 SC 1086 * M. C. Mehta vs Kamal Nath & Ors (1997)1SCC388 4.15 Since the issue involves the hazardous good we would not be i....