2014 (11) TMI 325 - HC - Customs

Import of old and used Digital Multifunction Print and Copying Machines - Confiscation of goods - Redemption fine - Provisional release of goods - Held that - If an import of hazardous wastes is made into India without the permission of the Central Government, it is deemed to be an illegal import under Rule 17(1). In such cases, the importer is obliged to re-export the waste in question within 90 days, at his cost. The implementation of this is to be ensured by the State Pollution Control Board. Even Schedule VII to these Rules, which contains the list of authorities under the Act and their corresponding duties, does not name the Commissioner of Customs as one of the authorities who is entitled to take action under Rule 17 for illegal traffic in hazardous wastes. Therefore, the action now taken cannot be construed as one for re-export under Rule 17(2) of the Hazardous Wastes Rules. Respondents are not competent to order the re-export, even though they are competent to order confiscation - No samples have been drawn as per Rule 16 of the Hazardous Wastes Rules, to decide whether the item imported into India by the petitioner, falls within Entry B 1110 under Part B of Schedule III to the Hazardous Wastes Rules. Hence, the refusal of the respondents to permit the provisional release of the goods is not in accordance with law. The Customs Act, 1962, provides for provisional release. Even the Foreign Trade (Regulation) Rules, 1993 allows redemption of confiscated goods under Rule 17(2). No proceedings have been initiated by an authority competent in terms of the Hazardous Wastes Rules for directing the petitioner to re-export the goods. Therefore, the petitioner is entitled to the release of the goods provisionally - Decided in favour of assessee.

Summary

Issues Involved:
1. Valuation of imported goods.
2. Restriction on import of second-hand Digital Multifunction Print and Copying Machines.
3. Compliance with Foreign Trade Policy.
4. Environmental concerns regarding hazardous waste.
5. Provisional release of goods under Customs Act, 1962.
6. Show cause notice and confiscation under Customs Act, 1962.

Detailed Analysis:

1. Valuation of Imported Goods:
The petitioner imported 129 packages of old and used Digital Multifunction Print and Copying Machines with a declared value of USD 8201.6375 (CIF). However, the Customs Approved Chartered Engineers appraised the value at USD 24,932.77 (CIF). Despite the petitioner's willingness to accept the enhanced value, the respondents did not permit clearance, leading to the filing of the writ petition.

2. Restriction on Import of Second-hand Digital Multifunction Print and Copying Machines:
The import of second-hand Digital Multifunction Print and Copying Machines is regulated under Paragraph 2.17 of the Foreign Trade Policy, which classifies them as restricted goods requiring authorization. The petitioner's application for import permission was rejected by the Export Facilitation Committee due to concerns about obsolescence and environmental pollution.

3. Compliance with Foreign Trade Policy:
The petitioner argued that the orders for the machines were placed before the rejection of their import request, and thus, they should be allowed to clear the goods. However, the respondents issued a show cause notice under Section 124 of the Customs Act, 1962, questioning the declared value and proposing confiscation of the goods as prohibited under the Customs Act and the Foreign Trade (Development and Regulation) Act, 1992.

4. Environmental Concerns Regarding Hazardous Waste:
The respondents contended that the imported goods fall under Entry B 1110 of Part B of Schedule III of the Hazardous Material (Management, Handling and Transboundary) Rules, 2007, requiring permission from the Ministry of Environment and Forests. The petitioner had not obtained such permission, making the import liable for confiscation under Section 111(d) of the Customs Act, 1962.

5. Provisional Release of Goods under Customs Act, 1962:
The court examined the provisions of the Customs Act, 1962, the Foreign Trade (Development and Regulation) Act, 1992, and the Hazardous Material (Management, Handling and Transboundary) Rules, 2007. It concluded that despite the restricted status of the goods, there is no bar for their provisional release upon payment of applicable duties, under Section 125(1) of the Customs Act, 1962, and Section 11(9) of the Foreign Trade (Development and Regulation) Act, 1992.

6. Show Cause Notice and Confiscation under Customs Act, 1962:
The court noted that the show cause notice issued to the petitioner proposed the confiscation of the goods and levying of penalties. However, no proceedings had been initiated under the Hazardous Wastes Rules for directing re-export. The court found that the refusal to permit provisional release was not in accordance with the law.

Conclusion:
The writ petition was allowed, directing the respondents to assess and permit the provisional release of 129 units of second-hand Digital Multifunction Print and Copying Machines upon payment of applicable duties of customs, subject to eventual adjudication. The respondents were ordered to release the goods provisionally within four weeks from the date of receipt of the order. The proceedings pursuant to the show cause notice could continue. No costs were awarded, and the connected miscellaneous petition was closed.