2012 (4) TMI 68 - HC - Customs

writ Petition- Petitioners had imported second hand Digital Multifunction Print and Copying Machines - the customs authorities may be directed to release the retained goods on payment of the applicable customs duties on the declared value of the goods on their furnishing the necessary provisional duty bonds, pending final assessment in order to safe guard the interest of the Revenue - The petitioners stated that they had imported the second hand goods from their overseas suppliers who had also filed the Bills of Entry, with the assessment group concerned, at the Chennai Custom House, declaring the value of the imported goods and sought the clearance of the goods, under Free Importability , as second hand capital goods, in terms of Foreign Trade Policy - the Customs authorities had not taken up the goods for assessing their value, for the payment of the customs causing a delay - petitioners are incurring heavy financial losses due to the payment of detention and demurrage charges Held that - the authorized chartered engineers had not inspected the goods in question, the customs authorities concerned shall direct the inspection of such goods before they are released. Such goods may be directed to be released, on payment of the appropriate customs duty and on the fulfillment of the conditions prescribed by law - writ petitions of assessee allowed.

Issues Involved:
1. Detention of imported second-hand Digital Multifunction Print and Copying Machines by customs authorities.
2. Requirement of import licenses and permissions under various regulations.
3. Classification of the imported goods as "Hazardous Waste".
4. Financial losses due to detention and demurrage charges.
5. Compliance with customs assessment and examination procedures.

Detailed Analysis:

1. Detention of Imported Goods:
The petitioners imported second-hand Digital Multifunction Print and Copying Machines under various Bills of Entry. The customs authorities detained these goods without providing proper reasons. The petitioners sought the release of the goods upon payment of applicable customs duties based on declared values and provisional duty bonds pending final assessment as per Section 18 of the Customs Act, 1962, and Customs (Provisional Duty Assessment) Regulations, 1963.

2. Requirement of Import Licenses and Permissions:
The petitioners argued that the imported machines were classified as second-hand capital goods and were freely importable under Paragraph 2.17 and 9.12 of the Foreign Trade Policy and Paragraph 2.33 of the Hand Book of Procedures 2009-14. However, the customs authorities insisted on the production of import licenses and permissions from the Ministry of Environment and Forests, citing the Hazardous Waste (Management, Handling, and Transboundary Movement) Rules, 2008. The authorities claimed that the machines fell under the category of hazardous waste and required specific permissions.

3. Classification as "Hazardous Waste":
The customs authorities classified the imported machines as hazardous waste under Rule 3(1)(iii) of the Hazardous Waste Rules, 2008, arguing that they were electrical and electronic assemblies subject to hazardous waste regulations. The petitioners countered this by stating that the machines were functional with a residual life of five years, as per the inspection report by Inspectorate Griffith India Pvt. Ltd., and did not qualify as hazardous waste. The court found that the machines did not fall under the hazardous waste category, as the respondents failed to provide sufficient evidence to support their classification.

4. Financial Losses Due to Detention and Demurrage Charges:
The petitioners highlighted the financial losses incurred due to the delay in the clearance of goods, resulting in detention and demurrage charges. The court acknowledged the petitioners' financial hardships and directed the customs authorities to expedite the release of the goods upon payment of appropriate customs duties.

5. Compliance with Customs Assessment and Examination Procedures:
The customs authorities argued that the petitioners had not complied with the necessary requirements for the examination and assessment of the goods. They emphasized the need for examination by approved chartered engineers and the production of relevant records. The court directed the customs authorities to release the goods that had already been inspected by authorized chartered engineers upon payment of customs duties. For goods not yet inspected, the court instructed the authorities to facilitate the inspection and subsequent release upon fulfillment of legal conditions.

Conclusion:
The court ordered the release of the detained goods upon payment of appropriate customs duties and completion of the necessary inspection procedures. The court also allowed the petitioners to request the waiver of detention and demurrage charges as per Regulation 6 of the Handling of Cargo in Customs Area Regulations, 2009. The writ petitions were thus ordered accordingly, with no costs, and connected miscellaneous petitions were closed.

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