2024 (5) TMI 1261 - AT - Customs

Examination of the imported goods (declared as waste paper) - consignments of waste paper mixed with hazardous wastes - Prohibited for import - confiscation - penalty - re-export of the confiscated goods to the overseas supplier at importer s cost in terms of Rule 15(2) of the Hazardous Other Wastes - Jurisdiction and Responsibilities of Customs Authority - Validity of Pre-Shipment Inspection Certificate (PSIC) - HELD THAT - As it is nowhere prescribed that only the Seizing Officer ought to have examined the goods, prior to such action for seizure, there is no merit in this plea of the appellant. The detailed finding in the Examination Report points out to the exact nature of contaminants found in each container and a very comprehensive list container wise of the contaminants have been drawn at the time of 100% physical examination of the cargo. Moreover, in view of the OM referred (supra) empowering the Customs authorities, the plea of the appellant that the officers were not competent to point out such nature of contaminants that too merely on a visual inspection is completely hollow and lacks substance. As per Import Policy pertaining to import of waste paper, according to the HOWR, 2016, paper waste comes under Part D of Schedule III, Basel No.B3020 and can be imported into India without approval from MoEF CC, provided they are not mixed with hazardous wastes. Now, the presence of hazardous wastes prohibited to import viz. Basel No. A/4020, Basel No. B/3010, Basel No. Y 46 i.e., biomedical waste, post-consumer domestic waste, municipal waste in these consignments renders the imported goods within the scope of illegal traffic . In view of the discussions and the legal position as laid down by the courts and in view of the fact that the appellant had procured and supplied PSIA Certificates alongwith Chemical Analysis Certificates, in each of the case, the integrity of issuance of which have not been doubted, compromised or malafides attached thereto, and which were obtained from accredited persons as approved by the DGFT, we are of the view that the case does not warrant imposition of penal liabilities upon the appellant under Section 112(a) and/or 112(b) as well as 114AA of the Customs Act 1962. We therefore set aside the penal liabilities so imposed on the appellant. Thus, if at all the department had a grouse against the said certificates for not indicating the contents truthfully, it was for the department to proceed against such certified bodies and take appropriate action in law against them including de-recognition and cancellation of their certification with the department concerned. We are of the view that the Revenue has made a very strong case towards confiscation of the goods. However, in the interest of justice, we are of the view that principles of natural justice would require us to consider the strong contest raised by the appellant on the issue of challenge to the examination report, by the appellant and the fact that the State Pollution Control Board Authorities (SPCB) are duly empowered under Schedule VII (Sr. 4) of the HOWR, 2016. We feel that the subject cargo can be jointly got re-examined afresh by the department in co-ordination with SPCB before initiating any further action in the matter. However the said option is completely at the discretion of the appellant who will be required to file a written undertaking with the jurisdictional Commissioner to the effect of consent thereto and to abide by the consequence of such re-examination. The appellant will be required to bear the cost incurred for the re-examination of the goods. Such option if any, will be required to be exercised by the appellant within four weeks of the pronouncement of the order. Coming to the above option of joint re-examination afresh, as given above, if the appellant chooses to opt for re-examination, the decision of the Tribunal would be as under - (A) In case the re-examination results in a different conclusion by the examining authority holding that there is no violation of statutory provision of Pollution and Hazardous materials in the imported consignment, the confiscation ordered in the impugned Order-in-Appeal, would be treated as set aside. (B) If the re-examination result confirms the earlier conclusion arrived at by the Revenue, in such a case, the appellant would be required to re-export the offending prohibited goods. (C) The appellant would be bound by the final decision of the re-examining authority as already held. The appeal is thus disposed off in the aforesaid terms.

Summary

Issues Involved:
1. Examination of Imported Goods
2. Contamination with Hazardous Wastes
3. Confiscation and Penalties
4. Import Policy and Compliance
5. Pre-Shipment Inspection Certificate (PSIC)
6. Jurisdiction of Customs Authority
7. Re-export or Disposal of Contaminated Goods

Summary:

1. Examination of Imported Goods:
The appellants imported waste paper, which upon examination by the Customs department was found to be mixed with hazardous wastes like municipal and hospital waste. The goods were declared under various Bills of Entry and subjected to 100% examination, revealing contaminants such as food packets, drink cans, toothpaste tubes, three-ply masks, and drug boxes.

2. Contamination with Hazardous Wastes:
The imported consignments were found to contain municipal solid waste, post-consumer domestic waste, and biomedical waste, which are prohibited for import as per Schedule VI of the Hazardous & Other Wastes (Management & Transboundary Movement) Rules, 2016 (HOWR, 2016) and OM No.13-1/2004HSMD dated 11.05.2010 issued by the Ministry of Environment and Forests & Climate Change (MOEF & CC).

3. Confiscation and Penalties:
The adjudicating authority ordered the confiscation of 1587.477 MTs of goods valued at Rs. 3,74,89,068.00 and imposed a penalty of Rs. 37.00 lakh u/s 112(a)(i) and 112(b)(i) of the Customs Act, besides another penalty of like amount u/s 114AA. The goods were also ordered to be re-exported at the importer's cost upon payment of redemption fine of Rs. 37.00 lakh in lieu of confiscation u/s 125 of the Customs Act, 1962.

4. Import Policy and Compliance:
The import of waste paper is regulated by HOWR, 2016 and the Environment (Protection) Act, 1986, along with OM dated 11.05.2010, which prohibits the import of waste paper mixed with municipal solid waste, post-consumer domestic waste, or biomedical waste. The goods were imported in contravention of these regulations, leading to their seizure and confiscation.

5. Pre-Shipment Inspection Certificate (PSIC):
The appellants argued that the imported consignments were inspected by a pre-shipment agency recognized by DGFT, which certified that the consignments did not contain any prohibited contaminants. However, the Customs authorities found contaminants upon physical examination, leading to the seizure and confiscation of the goods.

6. Jurisdiction of Customs Authority:
The Customs authorities are empowered under Rule 13(6) and Rule 21 of HOWR, 2016 to ensure compliance with the import regulations and to take action against violations. The Tribunal upheld the jurisdiction of Customs authorities to examine the consignments and take necessary action based on their findings.

7. Re-export or Disposal of Contaminated Goods:
The Tribunal directed that the contaminated goods should either be re-exported or disposed of in waste-to-energy plants under the supervision of SPCB, as per the revised OM dated 10.01.2023. The appellant was given the option to re-examine the goods in coordination with SPCB or to re-export the goods, failing which they would be required to dispose of the goods locally as directed.

Conclusion:
The appeal was disposed of with directions for re-examination or re-export of the contaminated goods, setting aside the penal liabilities imposed on the appellant, and emphasizing compliance with the statutory provisions and regulations governing the import of hazardous wastes.