2013 (11) TMI 854 - AT - Customs

Confiscation of goods - Import of old but unused hard disk - Goods confiscated as held to be hazardous - Held that - goods imported are 800 pieces of hard disk drive. Further, the appellant themselves are claiming that these are produce of the year 2008, 2009 and 2010 and were imported by them in 2012. They have imported these 2/3 years old items are available at lower rates. We find that in the report of Arihant E-Recycling, it is clearly stated that no data or files were found in the hard disk drive and it shows that these were not installed previously. They have also certified that such situation is possible with new hard drive - three reports given by the officers of Customs are at variance while the first talked of old and used; the second talked of old and the third talked of old, obsolete and refurbished. The officers who have examined are not expert in the field and there is no reason not to believe the report of Arihant E-Recycling and the Customs authorities have not been able to bring out any evidence to prove that the goods are used or hazardous waste - impugned order as also the original order are set aside - Decided in favour of assessee.

Summary

Issues:
1. Determination of whether imported hard disks are old and used goods.
2. Consideration of goods as hazardous waste leading to confiscation and penalty imposition.
3. Evaluation of conflicting examination reports by Customs officers and expert report from Arihant E-Recycling.

Issue 1: Determination of Goods as Old and Used:
The appellant imported 800 hard disks, which were examined multiple times. Initial examination suggested the goods were old and used, but subsequent 100% examination only indicated them as old. The Customs House report mentioned the goods appeared to be refurbished. The appellant argued the goods were new, citing reports from non-experts and Arihant E-Recycling, which found no data or files on the hard disks, indicating they were possibly new. The Tribunal noted the inconsistency in the Customs officers' reports and the lack of concrete evidence proving the goods were used or hazardous waste. Consequently, the Tribunal set aside the confiscation order and penalty, directing the release of the goods to the importer.

Issue 2: Consideration of Goods as Hazardous Waste:
Following the examination reports, a show cause notice was issued, proposing to confiscate the goods as hazardous waste. The adjudication order confiscated the goods and imposed a penalty, which was upheld by the Commissioner (Appeals). The appellant contended that the Customs House failed to prove the goods were hazardous waste, especially considering the report from Arihant E-Recycling stating no data was found on the hard disks. The Tribunal agreed with the appellant, emphasizing the lack of evidence supporting the goods being classified as hazardous waste, leading to the reversal of the confiscation and penalty imposition.

Issue 3: Evaluation of Examination Reports:
The examination reports from Customs officers indicated varying conclusions regarding the condition of the imported hard disks, ranging from old and used to old, obsolete, and refurbished. The appellant highlighted the expertise of Arihant E-Recycling, approved by the Maharashtra Pollution Control Board, which found no previous data on the hard disks, suggesting they were new. The Tribunal noted the lack of expertise of the Customs officers in electronic items and the inconsistency in their reports. Ultimately, the Tribunal relied on the expert report and the absence of concrete evidence from Customs to support the goods being considered as hazardous waste, leading to the decision to release the goods and set aside the penalty.