2016 (9) TMI 973 - AT - Customs

Provisional release of confiscated goods - confiscation of consignment of rubber - option to redeem on payment of fine only for re-export within 90 days - imposition of penalties - classification of imported goods - under 27101960 as base oil - under 27079900 leviable to duty at 10% - waste product listed in Schedule III Part A of Hazardous Waste (Management, Handling and Trans-boundary Movement) Rules, 2008 - hazardous waste - Held that - the imports of the appellants do contain a higher percentage of aromatic constituent than prescribed for classification under 2710. The alternate heading which describe the imported goods to be waste brings it under the ambit of Hazardous Waste (Management Handling & Trans Boundary Movement) Rules, 2008 Rules and therefore liable for action under section 111 and section 112 of Customs Act, 1962. In relation to the goods imported earlier that had not been subject to testing at the time of import, it is not in dispute that, in the absence of such verification, it would be inequitable to consider those to be at par with imports lying uncleared. Refining of crude petroleum involves complicated processes and there may not be any ground to conceive that an output of the production process which is imported in the country for a specific industrial use would have uniform composition on each occasion. Competence of CRCL to test the product - laboratory approved by the Ministry of Environment & Forests - Held that - testing is for coverage under note 2 of Chapter 27 of First Schedule of Customs Tariff Act, 1975. It is following a re-classification on account of non-fitment with that note that the goods become subject to Rules governing handling of hazardous waste. The origin of confiscation resides in the domain of Customs procedures and hence reliance on testing by CRCL is not questionable - the samples subjected to a valid test - testing procedure should not be subject to cross-examination by the appellant as the credibility of the test is not in question and a non-expert may not be in a position to query an expert on technicalities. It was open to the appellants to produce expert witnesses on their side during the adjudication proceedings. No such request was canvassed on behalf of appellants. The imported product subject to the provision of Hazardous Waste (Management Handling & Trans Boundary Movement) Rules, 2008 - appeal rejected - decided against appellant.

Summary

Issues Involved:
1. Classification of imported rubber processing oil.
2. Competence of CRCL for testing the product.
3. Application of Hazardous Waste (Management, Handling & Trans-boundary Movement) Rules, 2008.
4. Validity of test samples and results.
5. Refusal for sample re-testing and cross-examination of officials.
6. Penalties and duty demands imposed on appellants.

Issue-wise Detailed Analysis:

1. Classification of Imported Rubber Processing Oil:
The adjudicating authority reclassified the imported rubber processing oil under heading 27079900, subject to a 10% duty, instead of the declared 27101960, due to the aromatic content exceeding non-aromatic content. The product was also deemed a waste product under the Hazardous Waste Rules, 2008.

2. Competence of CRCL for Testing the Product:
The competence of CRCL was challenged by the appellants, arguing it was not approved by the Ministry of Environment & Forests. However, the Tribunal found that the testing was for classification under the Customs Tariff Act, 1975, and the reclassification led to the application of Hazardous Waste Rules.

3. Application of Hazardous Waste (Management, Handling & Trans-boundary Movement) Rules, 2008:
The product was classified as hazardous waste due to its high PAH content and non-compliance with IS:15078:2001. The Tribunal upheld the requirement for prior informed consent, a DGFT license, and Central Government permission for such imports.

4. Validity of Test Samples and Results:
The Tribunal noted that the CRCL's test results were valid and reliable. The appellants' contention about the absence of sample drawal records for earlier imports was dismissed due to lack of evidence.

5. Refusal for Sample Re-testing and Cross-examination of Officials:
The appellants' request for sample re-testing and cross-examination was refused. The Tribunal found no reason to question the credibility of CRCL's tests and stated that appellants could have presented their expert witnesses during adjudication.

6. Penalties and Duty Demands Imposed on Appellants:
The Tribunal upheld the penalties and duty demands imposed on the appellants under sections 111 and 112 of the Customs Act, 1962, for mis-declaration and import of hazardous waste. The orders-in-original confirmed duty demands and penalties on various appellants, allowing confiscated goods to be redeemed for re-export upon payment of fines.

Conclusion:
The Tribunal found no reason to interfere with the impugned order, upholding the classification of the imported product as hazardous waste and the associated penalties and duty demands. All appeals were rejected.