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Kushal N Desai, Apar Industries Ltd., Vivek Sah, Sah Petroleums Ltd., Gandhar Oil Refinery (I) Ltd., Rajiv J Parekh, Panama Petrochem Ltd. and Samir Akbarali Rayani Versus Commissioner of Customs (Import) , Mumbai

2016 (9) TMI 973 - CESTAT MUMBAI

Provisional release of confiscated goods - confiscation of consignment of rubber - option to redeem on payment of fine only for re-export within 90 days - imposition of penalties - classification of imported goods - under 27101960 as base oil - under 27079900 leviable to duty at 10% - waste product listed in Schedule III Part A of Hazardous Waste (Management, Handling and Trans-boundary Movement) Rules, 2008 - hazardous waste - Held that: - the imports of the appellants do contain a higher perce .....

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h verification, it would be inequitable to consider those to be at par with imports lying uncleared. Refining of crude petroleum involves complicated processes and there may not be any ground to conceive that an output of the production process which is imported in the country for a specific industrial use would have uniform composition on each occasion. - Competence of CRCL to test the product - laboratory approved by the Ministry of Environment & Forests - Held that: - testing is for cover .....

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of the test is not in question and a non-expert may not be in a position to query an expert on technicalities. It was open to the appellants to produce expert witnesses on their side during the adjudication proceedings. No such request was canvassed on behalf of appellants. - The imported product subject to the provision of Hazardous Waste (Management Handling & Trans Boundary Movement) Rules, 2008 - appeal rejected - decided against appellant. - Appeal Nos: C/86916 – 86919, 86944-86945 and .....

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23rd January 2013 for which warehouse bills of entry were filed in Mumbai Customs House by various importers of the cargo. The adjudicating authority, the Commissioner of Customs (Import), Mumbai, has held that the imported goods, both present and past, are liable for confiscation and with, except in relation to those that had been cleared on earlier occasions, the option to redeem on payment of fine only for re-export within 90 days of the order. In addition, penalties were also imposed. Duty .....

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ntral Board of Excise & Customs also clarified that goods would be classifiable under this heading only to the extent that it conforms to Note 2 of Chapter 27 i.e. the aromatic constituents should not exceed, by weight, the non-aromatic constituent. The practice of drawing samples commenced after this clarification and these were being tested at M/s Geochem, Mumbai. In December 2012, the laboratory attached to the Customs House at Kandla intimated that it was capable of ascertaining aromatic .....

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td and M/s Panama Petrochem Ltd and four individuals who were also subject to action under Customs Act, 1962 in proceedings under four show cause notices all dated 8th August 2013. M/s Apar Industries Ltd and Shri Kushal N Desai are in appeal against order-in-original no. 33/2014/CAC/CC(I)/AB/Gr Oil Unit dated 19th March 2014 which has confirmed duty demand of ₹ 85,04,056 along with penalty of like amount under section 114A of Customs Act, 1962 besides penalty of ₹ 5,50,000 on the tw .....

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t and allowing confiscated goods to be redeemed for re-export on payment of fine of ₹ 55,00,000. M/s Gandhar Oil Refinery Ltd and Shri Rajiv J Parekh are in appeal against order-in-original 25/2013/CAC/CC(I)/AB/Gr VBA dated 5th March 2014 which has confirmed duty demand of ₹ 2,37,45,979 along with penalty of like amount under section 114A of Customs Act, 1962 besides penalty of ₹ 20,00,000 on the two noticees under section 112 of Customs Act and allowing confiscated goods to be .....

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rt on payment of fine of ₹ 10,00,000. As the facts relating to the appeals are common and the imports have also been effected in common, we take up all of them for disposal by a common order. 4. The tortuous windings of the clearance procedures and its travel through the appellate hierarchy have obscured the simplicity of the contentions in dispute. Attributable partly to the alleged revenue bias in the proposal to reclassify what was till then a routine import that was, in addition, depri .....

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and discharged its cargo into bonded tanks for warehousing. The goods were classified under 27101960 as base oil and samples drawn were sent to CRCL Delhi for testing. The test results were found to be non-compliant with IS: 15078:2001 applicable to rubber processing oil. As the aromatic content was 78.5%, it did not appear to be eligible for classification under the declared entry but under 27079900 leviable to duty at 10%. The test report also indicated that that it is a waste product listed .....

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nged as it was apparently not a laboratory approved by the Ministry of Environment & Forests. The appellants sought provisional release which, having been refused, was taken to the Honble High Court of Bombay. The plea before the Hon ble High Court was subsequently withdrawn and the matter placed before the Tribunal. The Tribunal, vide order no. M/2880-2882/15/CB dated 3rd July 2015, directed that samples be tested at M/s Ultra Tech Environmental Consultancy and Laboratory. By order no. M/4 .....

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d from bituminous minerals but also similar oils, as well as those consisting mainly of mixed unsaturated hydrocarbons, obtained by any process, provided that the weight of the non-aromatic constituents exceeds that of the aromatic constituents. The adjudicating authority held that the proportion of aromatic contents being more than that of non-aromatic contents, it was more appropriate to adopt the classification proposed in the show cause notice i.e. others leviable to duty at 10%. The PAH of .....

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ous Waste in respect of waste constituents listed under Class A of Schedule II of Hazardous Waste (Management, Handling & Trans Boundary) Rules, 2008. and as such goods require (i) Prior informed consent of the country from where it is imported (ii) Licence issued by the Director General of Foreign Trade and (iii) Prior written permission of the Central Government which they were unable to furnish, the goods could not be allowed as imports into the country. 8. It is further held that in rela .....

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nt as the nodal ministry, it was it was improper for the testing to be done at Central Revenue Control Laboratory, and that the adjudicating authority had refused to allow cross-examination of official who carried out the test. The appellant also draw our attention to decision of the Madurai Bench of Honble Madras High Court in W.P. (MD) Nos. 1419 &1003 of 2014 and that the sample relating to earlier consignment which were apparently sent to CRCL was not valid in the absence of a record of .....

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-declaration. The appellants also place reliance on the decision of Hon'ble Bombay High Court in Gujarat State Export Corpn. Ltd. & Anr. [1984 (17) ELT 50 (Bom)] and Pee Jay Apparels Pvt. Ltd. [2001 (135) ELT 842 (Tri. Del)] and makes a further submission that if their declaration is not accepted the goods merit classification under 2713 as other residues of petroleum oils. It is also contended that similar imports at Cochin Port by three other importers were allowed to be cleared witho .....

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the impugned order. 10. Having heard the rival contentions, we find that this is not first time the matter has been placed before us. We also take note of the contention of appellant that it was the alteration of the duty structure which prompted Revenue to dispute the classification and that it was the newly-minted capacity of CRCL to test the import product for conformity with the notes in the tariff and the IS specification that led to consequent prohibition of an import that, till then, was .....

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urated hydrocarbon obtained by any process, provided that the weight of the non-aromatic constituents exceeds that of aromatic constituents. 13. It would appear that the process of refining crude oil and the removal of prime products leave residues which find use in rubber industry as fillers. However such residue is suspected to contain chemicals that are inimical to human health and hence, for reason of public safety, are not permitted for import except for re-processing. 14. On a careful exam .....

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rlier that had not been subject to testing at the time of import, it is not in dispute that, in the absence of such verification, it would be inequitable to consider those to be at par with imports lying uncleared. Refining of crude petroleum involves complicated processes and there may not be any ground to conceive that an output of the production process which is imported in the country for a specific industrial use would have uniform composition on each occasion. However it is noted that the .....

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