2019 (7) TMI 1472 - HC - Customs

Effective implementation of the Rules - Electronic waste (e-waste) - E-waste (Management) Rules, 2016 - Whether non-production of Extended Producer Responsibility - Authorisation under the Rules at the time of import of the goods is a sufficient ground for confiscation of the goods under the Customs Act, 1962? - HELD THAT - The printers imported by the company were prohibited goods within the meaning of Section 2(33) of the Act as they were goods for which EPR-Authorisation was required under the Rules. Therefore, the customs authority had the power to confiscate them. In the instant case, the company had requested the Commissioner to grant permission for re-export of the goods and exercised the option to redeem the goods for that purpose. Therefore, the Commissioner imposed a redemption fine of ₹ 4,00,000/- on the company to enable it to re-export the goods. The Tribunal has reduced the amount of redemption fine to ₹ 2,00,000/-. We find no sufficient ground to further reduce the amount of redemption fine. Imposition of penalty - HELD THAT - Section 112(a) of the Act provides that any person, who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111, shall be liable to pay penalty not exceeding the value of the goods or ₹ 5,000/-, which is greater. Mens rea is not an essential element/ingredient to impose penalty, unless the language of the statute indicates the need to establish the same - The Tribunal has reduced the penalty from ₹ 50,000/- to ₹ 25,000/-. There is no sufficient ground to further reduce the amount of penalty. Thus, non-production of EPR-Authorisation under the Rules at the time of import of the goods constitutes sufficient ground for confiscation of the goods under Section 111(d) of the Act - appeal dismissed.

Summary

Issues Involved:
1. Effective implementation of E-waste (Management) Rules, 2016.
2. Requirement of Extended Producer Responsibility - Authorisation (EPR-Authorisation) for importing goods.
3. Confiscation of goods under the Customs Act, 1962 due to non-production of EPR-Authorisation.
4. Imposition of redemption fine and penalty on the company.

Detailed Analysis:

1. Effective Implementation of E-waste (Management) Rules, 2016:
The appeal concerns the effective implementation of the E-waste (Management) Rules, 2016, which aim to manage e-waste in an environmentally sound manner due to its toxic nature.

2. Requirement of Extended Producer Responsibility - Authorisation (EPR-Authorisation) for Importing Goods:
The appellant company purchased barcode printers and other electronic goods without obtaining the necessary EPR-Authorisation required under the Rules. The company argued that the Rules do not apply to importers as the term "importer" is not included in Rule 2. However, the court found that the company falls under the definition of "producer" as per Rule 3(cc), which includes anyone offering to sell imported electrical and electronic equipment. Therefore, the company was obligated to obtain EPR-Authorisation for the import.

3. Confiscation of Goods Under the Customs Act, 1962 Due to Non-Production of EPR-Authorisation:
The company contended that EPR-Authorisation is only necessary at the time of clearance and transport, not at the time of import. However, the court noted that Section 111(d) of the Customs Act allows for the confiscation of goods imported contrary to any prohibition imposed by any law, including the E-waste Rules. The printers were considered "prohibited goods" under Section 2(33) of the Act due to the absence of EPR-Authorisation, giving the customs authority the power to confiscate them.

4. Imposition of Redemption Fine and Penalty on the Company:
The Commissioner allowed the company to redeem the goods for re-export upon payment of a redemption fine of ?4,00,000/-, which the Tribunal reduced to ?2,00,000/-. The court found no sufficient ground to further reduce this amount. Additionally, the Commissioner imposed a penalty of ?50,000/-, which the Tribunal reduced to ?25,000/-. The court upheld this penalty, noting that mens rea (intent) is not required under Section 112(a) of the Act for imposing a penalty.

Conclusion:
The court dismissed the appeal, holding that non-production of EPR-Authorisation at the time of import constitutes sufficient ground for confiscation under Section 111(d) of the Customs Act. The court upheld the reduced redemption fine and penalty imposed by the Tribunal.