2024 (6) TMI 4 - AT - Customs

Jurisdiction of Commissioner of Customs to initiate the impugned suspension and penal detriment - Handling of Cargo in Customs Areas Regulations, 2009 - Customs cargo service provider (CCSP) being renewed every five years - restriction on their operations - infringement of mandate upon crossing of threshold prescribed in schedule 2 of the Rules - Whether the Customs Cargo Service Provider (CCSP) erred in performing their responsibilities under HCCAR, 2009 - Mandate of Manufacture Storage and Import of Hazardous Chemicals Rules, 1989 (MSIHCR, 1989) - Appellant, as custodian , is engaged with customs authorities in terms of section 45 of Customs Act, 1962 - HELD THAT - We would not be in error to hold that the mandate of Manufacture Storage and Import of Hazardous Chemicals Rules, 1989 (MSIHCR, 1989) operated independently of oversight under the Handling of Cargo in Customs Area Regulations, 2009 and any determination by empowered authority of infraction thereto required Commissioner of Customs to ensure closure of hazardous chemicals storage facility. The question that arises is the existence of such determination. It is in the light of this exposition, made necessary by the lack of clarity in the show cause notice and impugned order, that the primary challenge of the appellant must be evaluated before proceeding to examine compliance with the mandate of Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989. For if the Commissioner of Customs is without jurisdiction to initiate action for breach of the Rules by reason of explicit lack of acknowledgement therein and/or by lack of domain competence to ascertain compliance, we, too, lack such jurisdiction. Accordingly, we have heard Learned Senior Counsel for the appellants and Learned Authorized Representative at length. The provisions of threshold is intended for goods in the territory of India and even the related provisions therein excludes any empowerment of customs officers. Thus, the empowerment to issue instructions cannot be stretched to cover the contents of the impugned circular within the sanctity accorded to instructions by section 151A of Customs Act, 1962. A public notice has no legal standing under Customs Act, 1962 and may, at best, be considered to be a medium for dissemination of information to commercial interests. Indeed, for a time, such intimation and communications emanating from customs house were designated as facility and we are unable to trace the reasons for reverting to the erstwhile nomenclature. Thus, neither the impugned circular nor the impugned public notice may be deemed to have incorporated the mandate, and even for such purposive extent as impugned proceedings has, into the Handling of Cargo in Customs Area Regulations, 2009. There was, thus, no instrument that the Commissioner of Customs could have drawn upon to sustain the proceedings initiated in the show cause notice and concluded by the impugned order. The crossing of threshold is the sole trigger and schedule 2 of the Rules does not prescribe threshold beyond threshold ; once within coverage of obligation under rule 7 therein, the engagement is for all time. Significantly, reverting to the competent authority is warranted only when another chemical, with its own enumerated threshold, is proposed to be stored or the stipulated threshold is altered by law. The Commissioner of Customs has erred in assigning another context to threshold , and, indeed, one not conceived for the impugned Rules, which we suspect is that of loss of consent when storage at, any point in time, slips below the threshold; that does not appeal to common sense and nor does it appear, from literal reading of the provisions, to be intended so either. A perusal of the documentation prescribed in the schedules makes it, and unarguably, clear that maximum is with reference to dangerous substance which has no meaning assigned to it under the Rules; understandably, crossing of that maximum is a change requiring further approval of designated authority but there is no finding that the chemicals in the impugned notice are, indeed, dangerous substance requiring further consent. It can be seen that the legislative framework does not envisage the tax administration patently lacking in domain competence and domain exposure to address and enforce environmental concerns to undertake oversight of compliance with Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989 (MSIHCR, 1989). That is best left to the designated authorities under the relevant laws instead of claiming overarching authority merely from control of customs areas. The lack of jurisdiction and of domain competence precludes such inappropriate institution of proceedings. On this ground alone, the impugned order fails. Appeals are, accordingly, allowed.

Summary

Issues Involved:
1. Legality of restrictions on operations imposed on the appellant.
2. Alleged breach of quantitative stipulations for handling hazardous chemicals.
3. Validity of the pending renewal of permissions for handling hazardous cargo.
4. Authority of the Commissioner of Customs to enforce compliance with environmental regulations.
5. Jurisdiction and domain competence of the customs authorities regarding environmental regulations.

Summary:

1. Legality of Restrictions on Operations:
The appellant, M/s APM Terminals India Pvt Ltd, operates two 'container freight stations (CFS)' at Dronagiri Warehouse Complex, Navi Mumbai, and is aggrieved by the restriction on their operations imposed by the Commissioner of Customs (General), Nhava Sheva. The orders in question imposed penalties and suspended the cargo handling undertakings until the regularization of permission for handling and storage of hazardous cargo. The Tribunal noted that the conditions for regularization were imposed without a finding of irregularity under the Handling of Cargo in Customs Areas Regulations, 2009 (HCCAR-2009), which is the sole enabler of oversight by the Commissioner of Customs.

2. Alleged Breach of Quantitative Stipulations:
The dispute centers around the alleged breach of quantitative stipulations on the 'pass through' of specified chemicals during a calendar year and the 'peak' for every calendar month. The Commissioner of Customs penalized the appellant for non-adherence to the obligations under regulation 6(1) of HCCAR-2009, which mandates the safety and security of imported and exported goods and compliance with all relevant provisions. The appellant was found to have exceeded the threshold limits for various hazardous chemicals, which necessitated regularization under the Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989 (MSIHCR, 1989).

3. Validity of Pending Renewal of Permissions:
The appellant's permissions for handling hazardous cargo were pending renewal due to alleged non-compliance. The Tribunal noted that the renewal requests had been pending since 2019 and 2021, respectively, and the suspension of operations was based on the non-compliance with the conditions prescribed in the MSIHCR, 1989. The Tribunal highlighted the context of 'approval within approval' and the necessity for clarity in the regulatory framework.

4. Authority of the Commissioner of Customs:
The Tribunal examined the scope and intent of section 141 of the Customs Act, 1962, which governs the control of goods in customs areas. The Tribunal noted that the Handling of Cargo in Customs Areas Regulations, 2009, does not incorporate the provisions of the MSIHCR, 1989. The Commissioner of Customs' authority is limited to the provisions of the Customs Act, 1962, and the regulations framed thereunder. The Tribunal emphasized that the MSIHCR, 1989 operates independently of the oversight under HCCAR-2009.

5. Jurisdiction and Domain Competence:
The Tribunal concluded that the customs authorities lack the jurisdiction and domain competence to enforce compliance with the MSIHCR, 1989. The authority to enforce environmental regulations lies with the designated authorities under the relevant laws. The Tribunal found that the impugned orders were based on a misapplication of the regulatory framework and lacked legal foundation. The appeals were allowed, and the impugned orders were set aside.

Conclusion:
The Tribunal allowed the appeals, setting aside the impugned orders and emphasizing the lack of jurisdiction and domain competence of the customs authorities to enforce environmental regulations under the MSIHCR, 1989. The Tribunal highlighted the need for clarity in the regulatory framework and the appropriate delegation of authority to the designated environmental authorities.