TMI Blog2021 (11) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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. 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. Since the issue involves the hazardous good we would not be in position to permit the clearance of the goods without the active consideration of the same by the SPCBs/ PCCs who are the designated authority in terms of the ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I impose a penalty of ₹ 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 ₹ 9,37,213/-involving duty of ₹ 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 memos all dated 31.01.2015 requiring tests as under:- Description of test required To know the basic constituent of the preparation containing by weight what percentage of petroleum oil or of oils obtained from bituminous minerals and whether it is lubricating oil or otherwise The test reports all dt. 19.02.2015 received from CRCL, New Delhi stated as follows:- Sample 1. The sample is in the form of black colored viscous liquid having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... category of hazardous waste as PAH content in the sample is more than prescribed limit. Sealed remnant returned Sample 3 The sample is in the form of black colored viscous liquid having mineral hydrocarbon content more than 70% having following content. 1. Ash (% by mass) 0.09 (zero deci zero nine) 2. Density (gm/ml) 0.9537 (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CUS-ADC-SSK-022-16-17 dt. 19.05.2016 ordered confiscation of 44306.90 Kg. of lubricant oil- open gear under section 111 (d) 111 (m) of the Customs Act, 1962 and ordered the same to be re-exported after payment a fine of ₹ 1,00,000/-; the penalty of ₹ 10,000/- imposed u/s 112 of Act. 2.7 In appeal, Commissioner (Appeals) , vide order in-appeal No. CHD-EXCUS-001-APP-65-17-18 rejected the appeal of appellant. 2.8 CESTAT, vide final order no. A/62509/2018-CU[DB] dt. 04.07.2018 remanded the matter to Ld. Adjudicating Authority with a direction to decide the case within two months from the date of receipt of order after affording cross examination of the Chemical Examiner. 2.9 As per directions of Hon 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 ₹ 50,000/- and penalty of ₹ 10,000/- imposed. 2.10 Commissioner (Appeals) has by the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed goods are not of off specification. The case made out against them as stated in the Show Cause Notice was based on the test reports dated 09.02.2015 received from the CRCL. The allegation in show cause notice (Para-4) reads as under:- 4. As per the provisions of Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008, the import of any item falling in the Part A of Schedule III requires prior informed consent and permission from Ministry of Environment and Forest and DGFT license. As per the list given in this part A of Schedule III, Waste mineral oils unfit for 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l)] (para 13). It is settled law that the goods which are imported contrary to the conditions imposed for their importation, fall in category of prohibited goods, as per the following decisions,- Sheikh Mohd. Omer [1983 (13)ELT 1439 (SC)] Om Prakash Bhatia [2003 ( 155) ELT 423(SC)] Sheikh Mohammed Omar [2000 (126) ELT 507 (Kol.)]. Samynathan Murugesan [2009 (247) ELT 21 (Mad)] affirmed by the Hon 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 wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e concerned Authority to adjudicate the show cause notice within two months from the date of receipt of certified copy of this order by passing a speaking order and after affording an opportunity of hearing to the petitioner in accordance with law. 4.3 After the direction from the Hon ble High Court, the matter was adjudicated, and thereafter taken up by the appellant in appeal 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 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of re-export that needs to be incurred by the importer and would impose redemption fine of ₹ 50,000/- after holding the goods to be prohibited and confiscable in terms of section 111 (d) and 111 (m) of Customs Act, 1962 under Section 125 of the said Act. 4.7 Commissioner (Appeal) has by the impugned order dismissed the appeal filed by the appellants 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Assistant Chemical Examiner, CRCL, while the tests were actually outsourced. As already observed above I find that as CRCL lacked the facility for testing the samples of hazardous waste the test was outsourced to M/s Avon Food Laboratory Pvt Ltd., which is recognized by the Ministry of Environment and Forest and allowed for testing of the customs 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich can be accessed online by Customs, if required. 4. Accordingly, it is requested that the 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. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f aromatic content of the sample under reference. Qn.7 Is it correct that CRCL, New Delhi were not having facility to ascertain Hazardous character of product upto December 2015? Ans. Yes, it is correct CRCL, NEW Delhi were not having working facility to ascertain hazardous character of product when reports in questions were 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to any duty and charges payable in respect of such goods. The Tribunal has considered the scope of application of Section 125 which provides imposition of penalty in lieu of confiscation and has held in para 10 to 14 reproduced hereinbelow :- 10. A plain reading of the above section shows that it does not 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods should be re-exported after redemption is liable to be set aside and we do so. 14. Appeal is allowed to the extent that the condition in the Order-in-Original that the goods should be re-exported after redemption is set aside. Further we find that the ratio of the decision of the Tribunal in 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court held that power to levy the penalty under Section 112 of the Customs Act for improper importation of goods is different from the power of confiscation of goods under Section 125 of the Customs Act. The question of law referred to the Larger Bench is answered accordingly. 4.4 Further 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odyear India Ltd. v. Collector of Customs (Final Order No. A/32/90-NRB, dated 27-12-90) which was followed in Padia Sales Corporation v. Collector of Customs - 1992 (61) E.L.T. 90, it has been held as follows : 7. The Collector by his order. confiscated the goods. However, as per Section 125 of the Customs 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 ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of penalty are separate proceedings and just because goods are allowed to redeemed or allowed to be re-exported the penalty cannot be waived or imposed on lower side. 4.7 In view of the legal position as stated above we are not in position to uphold the order of the lower authorities whereby 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
