2020 (9) TMI 137 - HC - Customs

Provisional release of goods - Used Rubber Tyre Cut in Two Pieces - misdeclaration of the imported goods - restricted goods or not - allegation that the importer has mis-declared the cargo in order to circumvent the import restriction imposed by the extant Foreign Trade Policy - Section 110A of the Customs Act, 1962 - HELD THAT - While the petitioners would claim that the import is free, the original stand of the respondents was that it is restricted. In other words, when the seizure took place, the debate centered on the question whether the import is restricted or free and nothing else. A mere look at the seizure mahazar would indicate that it was not the stand of the respondents that the import of the goods in question is prohibited. In the written arguments filed by the learned standing counsel, it has been mentioned that though the petitioners claim that the imported used tyres are with two cuts in the bead wires, an inspection by the authorities, it was found that the said imported used tyres are without any cuts. The contention that the imports have been made without authorisation/license from DGFT has been reiterated in the written arguments. If that be so, the question is whether the request for provisional release of the goods can be opposed. The 2016 Rules contain as many as 8 schedules. Schedule 3 is in two parts. Part A contains a list of hazardous wastes applicable for import and export with prior informed consent. Part B contains the list of other wastes applicable for import and export and not requiring prior informed consent. Schedule VI sets out hazardous and other wastes prohibited for import. It is not the case of the respondents that the imported goods in the case on hand fall under Schedule VI. Once the application of the Schedule VI of the 2016 Rules is ruled out, the only question is whether the import of the goods is free or restricted. Under either case, in view of the decision of the Hon'ble Supreme Court in Atul Automations 2019 (1) TMI 1324 - SUPREME COURT , provisional release is very much permissible. The petitioners are entitled to provisional release of the goods under Section 110A of the Customs Act, 1962 - Petition allowed.

Issues Involved:
1. Classification and importability of goods.
2. Alleged misdeclaration and seizure of goods.
3. Compliance with Foreign Trade Policy and Hazardous Wastes Rules.
4. Request for provisional release of seized goods.
5. Legal precedents and applicable case laws.
6. Authority and procedure for re-export of hazardous waste.
7. Levy of demurrage and container detention charges.

Issue-wise Detailed Analysis:

1. Classification and Importability of Goods:
The petitioners imported consignments of "Used Rubber Tyre Cut in Two Pieces," claiming they are freely importable for manufacturing "rubber crumbs" for road laying. Customs authorities classified the goods under CTH 40040000, suspecting misdeclaration as the goods were found to be used rubber tyres in pressed bales without cuts in bead wires, which are restricted for import.

2. Alleged Misdeclaration and Seizure of Goods:
The customs authorities, upon examination, concluded that the goods were misdeclared to circumvent import restrictions, leading to their seizure under the Customs Act, 1962. The petitioners requested provisional release under Section 110A of the Customs Act, 1962, which was not complied with, prompting the filing of writ petitions.

3. Compliance with Foreign Trade Policy and Hazardous Wastes Rules:
Respondents argued that the goods were restricted for import under the Foreign Trade Policy and required authorization from DGFT, which the petitioners did not obtain. They also contended that the goods constituted hazardous waste, making provisional release untenable under the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016.

4. Request for Provisional Release of Seized Goods:
The court examined the respondents' inconsistent stand regarding the classification of goods and noted that the seizure was based on the debate over whether the import was restricted or free, not prohibited. The court referenced the Supreme Court's decision in Commissioner of Customs vs. Atul Automations Pvt. Ltd., which allowed provisional release of restricted goods upon payment of market value and fine under Section 112(a) of the Customs Act, 1962.

5. Legal Precedents and Applicable Case Laws:
The court considered various case laws, including decisions of the Madras High Court and the Supreme Court, which supported the provisional release of goods even if they were restricted under the Foreign Trade Policy. The court distinguished the present case from other precedents where specific conditions like BIS certification were not met.

6. Authority and Procedure for Re-export of Hazardous Waste:
The court noted that the Customs Act, 1962, does not provide for re-export of goods, and such directions should be issued by authorities specified in Schedule VII of the Hazardous and Other Wastes (Management and Transboundary) Rules, 2016. The court found no proceedings initiated by the authorities for re-export in the present case.

7. Levy of Demurrage and Container Detention Charges:
The petitioners sought waiver of demurrage and container detention charges, citing the Handling of Cargo in Customs Areas Regulations 2009 and government instructions during the lockdown. The court directed the respondents to assess and permit provisional release of the goods upon payment of applicable duties, without levying demurrage and detention charges.

Conclusion:
The court allowed the writ petitions, directing the respondents to provisionally release the goods under Section 110A of the Customs Act, 1962, upon taking a bond and necessary security from the petitioners. The respondents were instructed to assess and collect customs duties provisionally within three weeks and continue the adjudication proceedings. The court emphasized the usual approach in provisional release cases and the non-levy of demurrage and detention charges during the lockdown. The adjudication proceedings would continue as per the usual statutory process.

← Previous Next →