2017 (9) TMI 1204 - AT - Customs

Detention of goods - hazardous goods - certain petro-chemical products viz. Pressed Distillate oil (FDO), Rubber Process Oil (RPO), calcium base grease and slack Wax - waste products - the department was of the opinion that the goods stated as Grease and Rubber process oil detained at the premises of M/s. Ess Ess Traders during the search proceedings were not up to the requirement of calcium base grease and rubber process oil as specified in the IS specifications - absolute confiscation - penalty u/s 112 of CA, 1962. Held that - Commissioner (A) in the impugned order has elaborately discussed the evidence unearthed by DRI as well as nature of the goods and the relevant test report from CRCL. He categorically concluded by giving detailed reasons that the goods in question are of hazardous nature and is in the form of waste - Once it is established that the impugned goods are in the nature of hazardous waste they become prohibited goods and hence have been rightly confiscated absolutely - penalty upheld - appeal dismissed - decided against appellant.

Issues Involved:
1. Mis-declaration and undervaluation of imported petro-chemical products.
2. Classification of goods as hazardous waste.
3. Compliance with Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008.
4. Legality of confiscation and penalties imposed.

Detailed Analysis:

1. Mis-declaration and Undervaluation of Imported Petro-chemical Products:
The case originated from an intelligence report that led to the investigation by the Delhi Zonal Unit of DRI into the import of petro-chemical products such as Pressed Distillate Oil (FDO), Rubber Process Oil (RPO), calcium base grease, and slack wax at ICD, Ludhiana, and ICD, Tughlakabad, New Delhi. The investigation revealed that these products were imported by M/s. Om Udyog and M/s. S K Petrochem, controlled by Shri Jeevan Jain, with mis-declaration and undervaluation. The goods were sold through Delhi-based traders, including M/s. Ess Ess Traders.

2. Classification of Goods as Hazardous Waste:
During searches on 28.1.2013 at M/s. Ess Ess Traders' premises, certain petroleum products were found and detained for further investigation. Samples were sent to CRCL, New Delhi, for testing. The test reports indicated that the samples did not meet the IS specifications for calcium grease and rubber process oil, classifying them as off-specification or waste products. The PAH content in the samples exceeded the prescribed concentration limits, classifying them as hazardous waste under the Hazardous Waste Management Handling and Transboundary Movement Rules, 2008.

3. Compliance with Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008:
The department concluded that the detained goods were hazardous under the provisions of the Hazardous Waste Rules, 2008. The goods were covered under Schedule-II/Class A, exceeding the prescribed concentration limits. The rules mandate prior informed consent from the exporting country and a license from the Directorate General of Foreign Trade, along with prior written permission from the Central Government. The goods were imported without fulfilling these conditions, making them prohibited under Section 2(33) of the Customs Act, 1962.

4. Legality of Confiscation and Penalties Imposed:
A show cause notice dated 25.07.2013 was issued, and the adjudicating authority confiscated the goods and imposed penalties of ?2,00,000 each on Shri Sahib Chand Singhal of M/s. Ess Ess Traders and Shri Jeevan Jain of M/s. Om Udyog. The Commissioner (A) upheld the order, and the present appeal was filed by Shri Sahib Chand Singhal.

The appellant argued that there was no evidence linking the seized goods to the imports by Shri Jeevan Jain and that the allegations were based on assumptions without corroborative evidence. However, the Commissioner (A) found that the goods were hazardous and in the form of waste, based on detailed evidence and test reports. The goods were rightly confiscated under Section 111(d) & 111(m) of the Customs Act, 1962, and penalties imposed under Section 112 and 114 AA of the Customs Act, 1962.

Conclusion:
The Tribunal upheld the findings of the Commissioner (A), agreeing that the goods were hazardous waste and thus prohibited. The confiscation and penalties were deemed appropriate, and the appeal was rejected. The impugned order was upheld, with the reasons mentioned therein, and pronounced in open court on 11.08.2017.

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