AI Drafter 
TaxTMI 
TaxTMI 
2021 (11) TMI 127
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....1 (m) of Customs Act, 1962. (ii) The 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 consi....
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....p; (zero deci nine five three seven 3. Kinematic Viscosity at 100 °c cst 44.78 (forty four deci Seven eight) 4. Flash point (coc) 115 °c (one hundred fifteen) 5. Aromatic content 72.0 (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....
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....n'ble CESTAT, Joint Commissioner of Customs, ICD, GRFL, Sahnewal, Ludhiana after affording the cross examination of Shri A K Maurya Chemical Examiner, CRCL, New Delhi vide Order-in-Original No. LDH-CUS-JC-RRG-024-18-19 dt. 04.09.2018 holding that the impugned goods were hazardous waste thus ordered 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 imp....
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....or their originally intended use" are given in Basel no. A3020. Further, Hazardous waste is that which has waste constituents specified in Schedule II of these Rule if their concentration is equal to or more than the limit indicated in the said schedule. Concentration limit has been specified as 50 mg/kg for the constituents falling in Class A of Schedule II." The Ld. Adjudicating & Appellate Authority relied upon the information 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 ....
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....ble Supreme Court [2010 (254) ELTA15 (SC)]. • First Track Traders vs Commissioner of Customs Seaport (Imports), Tuticorin [2012(286) ELT 681 (Mad)] • M/s LNX Impex vs Principal Commissioner of Customs[2020-TIOL-281= HC-AP-Cus]. • There is a Constitutional mandate to protect and improve the environment and legislation has been enacted to solve the problem of environmental degradation. It is well settled few by the Hon'ble Supreme Court in a catena of judgments that hazardous waste has to be re-exported or incinerated on the principle of polluter pays. [Science Technology and Natural Resources Policy [(MANU/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 ther....
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....l before the Commissioner (Appeal) and CESTAT. CESTAT remanded the matter back to original authority for allowing the cross examination of the Chemical Examiner, CRCL. Adjudicating authority has in the remand proceedings concluded after allowing the cross examination of Chemical Examiner, as follows: "2.22 Accordingly, I hold that the lubricant oil open gear oil Chevron NC 100, NC 250 & NC 800 imported by the Noticee is hazardous waste and thus the imported goods are liable to confiscation under Section 111 (d) and 111(m) of the Customs Act, 1962 for the contravention of provisions of the Hazardous Waste Rules, 2008 and the goods are required to be re-exported 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 good....
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....s stating as follows: "7.2 The basis of whole case lies on the CESTAT F O No A/62509/2018 dated 04.07.2018 wherein the case was remanded back to the adjudicating authority with the directions to the adjudicating authority to grant the opportunity of cross examination of the chemical examiner of CRCL. The adjudicating authority decided the case afresh vide OIO No LDH-CUS-JC-RRG- 024-18-19 dated 4.9.19, after complying with the directions of Hon‟ble CESTAT order referred to above. From the OIO it is gathered that the opportunity of cross examination has been given the appellant by calling Shri A K Maurya, Chemical Examiner, CRCL, Delhi. 7.3 I find that appellant 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 purs....
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.... imports vide circular No 9/2009-Customs dated 23.02.2009. The appellant has tried to make an issue of this unnecessarily. The Chemical Examiner, CRCL, in his cross examination has admitted that the samples were got tested from M/s Avon Food Laboratory Pvt Ltd. Hence there is nothing which has been hidden from the appellant. The appellant has also submitted that no test was conducted to ascertain whether the impugned goods were lubricating oil or otherwise. In this regard, I observe that the description of the test required mentioned on the test memo clearly indicates that the test was required to know the basic constituent of the preparation containing by weight what percentage 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 ....
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....ents of hazardous wastes as and when required." 4.9 From perusal of the test reports, it is quite evident that, the report do not disclose the name of laboratory where the samples were tested and also the report of the said laboratory has not been disclosed in the opinion furnished by the Chemical Examiner, CRCL. At this point it is relevant to look into the questions that were put to Shri A K Maurya Chemical Examiner during the cross examination. The clarification contained in the circular prescribes that field formations "may consider utilizing the services of these laboratories for getting the consignments of hazardous wastes and substances tested and seek assistance from SPCBs/PCCs 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 Haza....
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....re opined." 4.11 From the cross examination it is quite evident that CRCL New Delhi, during the time when these samples were tested were not having the facility to conduct the test to ascertain the Hazardous Character of the goods. These facilities were acquired by them only in December 2015. Thus the opinion rendered in the test reports dated 19.02.2015 was not based on the tests conducted by CRCL by some other laboratory namely M/s Avon Food Labs Pvt Ltd. Reasons for not providing the copy of the actual test report of the said laboratory is not forth coming. However, when the appellant was contesting the test reports and prior to the adjudication order dated 19.05.2016 in first round, CRCL, had acquired 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....
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.... confer upon the Authority passing the Order any power to impose any conditions while allowing redemption of goods. 11. The scope of Section 125 of the Act is limited by the words in which it is framed and it is not open to the adjudicating authority or the Tribunal (who are creatures of the statute) to stretch, modify or restrict the scope of this Section; they are bound by it. Hon‟ble Supreme Court and High Courts can and do examine the validity of the laws and subordinate legislations and pass judgments annulling or modifying them by neither the officers nor the Tribunal, as creations of the statute cannot do so. This position has been explained clearly by the Hon‟ble Supreme Court in UOI v. Kirloskar Pneumatics 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 ....
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.... the case of HBL Power Systems Ltd. is squarely applicable in the present case. Therefore we hold that the impugned order ordering for re-export of the goods on payment of redemption fine is not sustainable in law and therefore we set aside this finding of the Commissioner (Appeals)." 4.12 In case of Nathi Mal Rugan Mal {2018-TIOL-3335-CESTAT- MUM], after taking into account the decisions of tribunal on the subject, bench has observed as follows: "4.3 Section 125 of the Customs Act 1962 has been considered by the larger bench of Tribunal in case of A K Jewellers [2003 (155) ELT 585 (T-LB)] and it has been held as follows: 10. After going through the provisions of Section 125 of the Customs Act, we find that provisions of this section do 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 go....
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....ther in case of Hemant Bhai R Patel [2003 (153) E.L.T. 226 (Tri. - LB)] Larger Bench of Tribunal held as follows: "8.In the light of the above discussion we have no hesitation to agree with the view expressed in the K & K Gems, Escorts Herion Ltd., Smt. Kusumbhai Dhyabhai Patel and Kothari Filaments. Section 111 of the Customs Act, empowers the Customs authorities to confiscate goods imported if any of the provisions contained under the sub-clauses is satisfied. Section 112 authorizes imposition of penalty. Section 125 contains the provisions enabling the Customs Officer to grant an option to the owner or the person from whose possession the goods have been seized to pay a fine in lieu of confiscation. In an adjudication proceeding as in the present case 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 referre....
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....ms Act, 1962 he is empowered to allow the importer to redeem the goods on payment of fine. The imposition of fine only validates the import, in other words, on payment of fine the importer becomes absolute owner of the goods, and he is free to export them subject to the provisions of Customs Act, 1962 and Rules made thereunder. The provision enables the owner to avoid confiscation by paying the fine imposed. However, there is no provision under the Act empowering the Collector to re-export the goods on payment of redemption fine. The order passed by the Collector is, therefore, without jurisdiction. The reliance placed by Ms. Mann on para 128 of the Handbook of Import and Export Procedures 1985-88 is irrelevant to the facts of the case. 8. We, therefore, modify the 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 confi....
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....reby a condition of re-export has been imposed in the proceedings of confiscation under Section 125 of the Customs Act, 1962." 4.13 Hence we do not find ourselves in agreement with the order of the adjudicating authority, whereby he confiscates the goods and imposes the redemption fine and directs the goods to be re-exported. Redemption of the goods against the redemption fine is the option given to the importer/ exporter and it is his choice whether to avail of that option. If the goods are to be re- exported as per Rule 17 (2) of Hazardous Waste Rules, 2008, then such an action could not have been justified, as importer can very well chose not to pay the redemption fine. The approach of the adjudicating authority cannot be upheld in any manner. Impugned order of Commissioner (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....