2024 (9) TMI 711 - AT - Customs

Confiscation of imported goods - redemption fine - penalty - illegal import or not - goods imported by the appellants were meant for re-processing and re-cycling purposes and hence are governed by Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016 - whether the impugned items fall under A4070 of the Schedule III Part-A or not - HELD THAT - The report dated November 11, 2022 given by Central Pollution Control Board does not state that the impugned goods are hazardous waste. It states that as per Rule 13(10) of the said Rules, the Port and Customs authorities shall ensure that shipment is accompanied with the movement document as given in Form-6 and the test report of analysis of the waste consignment, wherever applicable, from a laboratory accredited or recognized by the exporting country. In case of any doubt, Customs may verify the analysis. In the impugned case, it is not on record whether any such analysis was presented by the importer or got conducted by the Customs from a competent authority/ agency. The report appears to have presumed the goods to fall under A4070 of Schedule III Part-A of the List of Hazardous Waste as per Hazardous and Other Waste (Management of Transboundary Movement) Rules, 2016 and that such goods require prior permission. No analysis of the consignment seems to have done by the authorities - the denial of cross-examination particularly when the opinion was given only on the basis of records or visual examination is violation of principles of natural justice. The fact that the appellants imported goods identical to the impugned goods at different ports and no questions were raised and the fact that no sample was drawn in the presence of the appellant or his representative add to the credence of the appellant s submission. In the impugned case, the opinion that the imported goods were of hazardous waste was not arrived on the basis of any chemical test or analysis; it appears that the decision has been arrived on the basis of the warning words written on the container. Such a conclusion drawn even by a competent authority will not stand the scrutiny of law. It is very difficult to understand as to how hazardous goods would be construed as hazardous waste just by the warning words written on the container. It is a common knowledge that warnings like dangerous , hazardous are mentioned to indicate the nature of the contents and for the same reason, they do not become waste attracting the provisions of Hazardous Goods Rules, 2016. Moreover, non-permitting of the cross-examination of the concerned officers/ scientists of Pollution Control Board makes the report all the more non-reliable. The impugned order is set aside and the appeal is allowed.

Summary

Issues:
1. Challenge to impugned order of confiscation and penalty upheld by Commissioner of Customs (Appeals)
2. Allegation of illegal import of goods meant for re-processing under Hazardous and Other Wastes Rules, 2016
3. Dispute over classification of goods as hazardous waste under Basel No. A4070
4. Central Pollution Control Board's opinion without physical examination of goods
5. Denial of cross-examination of concerned officers
6. Violation of principles of natural justice in decision-making process

Analysis:
1. The appellants contested the impugned order of confiscation and penalty, arguing that the goods imported were solvent-based paints for paint manufacturers, not hazardous waste. They highlighted the difference between hazardous waste and hazardous goods, emphasizing that the goods were not intended for re-processing under the Hazardous Waste Rules.

2. The Department alleged illegal import of goods for re-processing under Hazardous and Other Wastes Rules, 2016, based on warnings on containers and opinions from Central Pollution Control Board (CPCB) without physical examination. The appellants refuted this claim, stating that the goods were not hazardous waste and were usable in paint manufacturing.

3. Dispute arose over the classification of goods under Basel No. A4070, with the Department asserting that prior permission was required for import under Schedule III Part-A. However, the appellants argued that the goods were not hazardous waste and had been imported without issue from other ports, challenging the need for prior permission.

4. The CPCB's opinion without physical examination of goods was questioned by the appellants, highlighting the lack of testing or sampling before deeming the goods as hazardous waste. The reliance on opinions without proper examination was deemed unreliable and against natural justice principles.

5. The denial of cross-examination of concerned officers, including Shri J.P. Meena from CPCB, was raised as a violation of natural justice. The lack of opportunity for cross-examination undermined the reliability of the reports and opinions presented by the authorities.

6. The Tribunal set aside the impugned order, citing the lack of chemical testing or analysis to classify the goods as hazardous waste. The decision was criticized for relying solely on warning labels without proper examination, leading to the appeal being allowed due to violations of natural justice principles.