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TMI Blog2021 (11) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... not disclose the name of laboratory where the samples were tested and also the report of the said laboratory has not been disclosed in the opinion furnished by the Chemical Examiner, CRCL. At this point it is relevant to look into the questions that were put to Shri A K Maurya Chemical Examiner during the cross examination. We do not find ourselves in agreement with the order of the adjudicating authority, whereby he confiscates the goods and imposes the redemption fine and directs the goods to be re-exported. Redemption of the goods against the redemption fine is the option given to the importer/ exporter and it is his choice whether to avail of that option. If the goods are to be re- exported as per Rule 17 (2) of Hazardous Waste Rules, 2008, then such an action could not have been justified, as importer can very well chose not to pay the redemption fine. The approach of the adjudicating authority cannot be upheld in any manner. Impugned order of Commissioner (Appeal) is totally silent on this vital aspect of permitting the goods to be re- exported against payment of redemption fine. Since the issue involves the hazardous good we would not be in position to permit the clearance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62. (iii) I impose a penalty of ₹ 10,000/- (Rupees Ten Thousand) is imposed on M/s Chander Chemicals Co., Mandi Road, Near Neem Chakki, Jalandhar under Section 112 of the Customs Act,1962." 2.1 Appellant imported 44306.90 kg of Lubricant Oil - Open Gear vide invoice number 182956298 257511 dated 12.10.2014 issued by M/s Salvex, 723 Main Sr. STE 600 Houston TX 77002 United States at a unit price of USD 0.101564 per kgs. For the clearance he filed bill of entry No. 8060152 dt. 21.01.2015 declaring assessable value of ₹ 9,37,213/-involving duty of ₹ 1,90,170/- under tariff item 2710 1980 of Customs Tariff Act, 1985. 2.2 Three samples drawn from impugned consignment were sent to CRCL, New Delhi vide 3 test memos all dated 31.01.2015 requiring tests as under:- * Description of test required To know the basic constituent of the preparation containing by weight what percentage of petroleum oil or of oils obtained from bituminous minerals and whether it is lubricating oil or otherwise The test reports all dt. 19.02.2015 received from CRCL, New Delhi stated as follows:- Sample 1. The sample is in the form of black colored viscous liquid having mineral hydrocarbo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 10.06.2015 sought clarifications from Chief Chemical Examiner, CRCL New Delhi. 2.4 The Chemical Examiner, CRCL, New Delhi vide his letter dated 22.06.2015 replied stating that concentration of PAH have been found more than specified limit i.e. 50 mg/kg of Schedule II of Class A, therefore, the product under reference are hazardous waste as they are listed under Schedule I (SNo. 1) and Basal No. 3020 and have also characteristics of E of Schedule II and H of Part C Schedule III of HW Rules, 2008. 2.5 A show cause notice C. No. 82/CSCN/Ldh/2015 was issued to the appellant dated 31.05.2015 on the grounds that that as per CRCL reports, concentration of the Polycyclic Aromatic Hydrocarbons (PAHs) in the impugned goods is found more than the specified limit i.e. 50 mg/kg. therefore, product under reference is "Hazardous Waste" and fall under Basel No. A3020 under Schedule III, Part-A of Hazardous Waste (Management, Handling & Transboundary Movement) Rules, 2008. Further, alleged that for the purpose of import clearance of these goods prior permission from Ministry of Environment and Forest and license from DGFT was required, but the importer did not have the same; rather t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench by referring letter dt. 14.03.2016 of respondent to Chemical Examiner, remanded the case to ld. Adjudicating authority with the direction to decide the case after affording cross examination of Chemical Examiner. * The issue required determination in the case is whether impugned imported goods are hazardous waste or not as per Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008 (in short HW Rules, 2008). * The impugned goods have been held hazardous waste based upon Central Revenue Control Laboratory three test reports all dated 19.02.2015. * As directed by the CESTAT, the adjudicating authority allowed cross examination of Shri A K Maurya Chemical Examiner, CRCL, New Delhi. * Sh. A. K. Maurya during cross examination on 17.08.2018 as summarized in order-in-original stated:- * Without ascertaining the nature of product in question conclusion of hazardous waste cannot be made. * In response to question 6 admitted that there is no mentioning in the report whether impugned goods is lubricating oil or not. There is nothing brought on records to suggest that imported goods were not lubricant oil. * Test were done by chemical assistant CRCL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile adjudicating the matter. Since this was never disclosed to the appellants the order in original has been passed in violation of the principles of natural justice. Impugned order has failed to consider this aspect. * Impugned order needs to be set aside. 3.3 Arguing for the revenue learned Authorized Representative while re-iterating the findings in the impugned order submits that,- * CRCL's test reports clarifications there upon, cross examination of the Chemical Examiner and clarificatory emails of the Chemical Examiner pursuant to the cross examination confirm goods to be hazardous waste. * This is corroborated from the invoice of M/s Salvex (supplier of the goods) that the goods have been purchased on "as is where basis", salvage, they do not fall under normal trade practices of various industries and that the buyer should understand the Condition and usability of the products. * No request for re-testing was made by the appellant nor any expert evidence produced to the contrary during the entire proceedings. * Imported Goods found to be hazardous waste are illegal traffic under Rule 17 of the Hazardous Waste (Management, Handling and Transboundary M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he imported goods are hazardous waste or otherwise." The issue has been lingering on for the last nearly seven years, and the goods alleged to be the hazardous waste continue to lie in the ICD, without any serious effort on the part of anyone to resolve and dispose of the goods, even when direction was given by the Hon'ble High Court of Punjab and Haryana in the CWP No 7856 of 2016, vide order dated 28.04.2016, directed for the decision in two months. Extracts from the order of Hon'ble High Court are reproduced below: 2. The petitioner imported Lubricant Oil-Open Gear on12.10.2014 and filed bill of entry No. 8060152 dated 21.01.2015for clearance of said goods at assessable value of ₹ 9,37,213/-involving duty of ₹ 1,90,170/- under tariff item No. 2710 1980 of Customs Tariff Act, 1985. Three different samples were drawn from the consignments and sent to Central Revenue Control Laboratory, New Delhi (in short 'CRCL') for testing on 31.01.2015whereupon three separate reports dated 19.02.2015 were given by the CRCL on the basis of which show cause notice dated31.05.2015 which according to the petitioner was dispatched on23.09.2015. 3. Learned counsel for the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the goods, would be incurring losses. Therefore, a lenient view requires to be taken while imposing fine and penalty." 4.4 Rule 17 (2) of the Hazardous Waste Rules, 2008 read as under: "Rule 17 Illegal Traffic (2) In case of illegal import of the hazardous waste, the importer shall re-export the waste in question at his cost within a period of ninety days from the date of its arrival into India and its implementation will be ensured by the concerned State Pollution Control Board." 4.5 The provisions of Rule 17 (2) of the Hazardous Waste Rules, 2008 are very succinct and clear. They provide who so ever has imported the Hazardous Waste into India, will be required to re-export the same within a period of ninety days from the date of arrival of such waste into India, and the implementation of the same is to be ensured by the State Pollution Control Board. In terms of this rule, the Stat Pollution Control Board is the implementing authority for this provision. Further we should not forget that the present issue is in respect of the Hazardous Waste, which should be disposed of at the earliest in order to protect our environment, flora and fauna from the ill effects of such wast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(1) (b) and section 13 of the Environment (Protection) Act, 1986. The said agency is accredited for "Testing of PAH content in Petroleum Products" from National Accreditation Board for Testing and Calibration Laboratories as per standard of ISO/ IEC 17025/ 2005. 7.4 I further take up the issue wherein it has been alleged that the chemical examiner admitted that the contents i.e. Accnapthalene, Acenapthene, Flourine mentioned in RUD 5 do not fall under clause A12 to A15 of the Schedule II of the Hazardous Waste Rules, 2008, and hence cannot be considered as in Class A of Schedule II of the Hazardous Waste Rules, 2008. I observe that adjudicating authority has already taken up the point at para no 2.13 -2.15 of the Order in Original No LDH- CUS-JC-RRG-024-18-19 DATED 4.9.19, wherein this plea of the appellant w.r.t sample report CL-3953 in respect of open gear lubricant oil has been considered. However, I find that after going through the comparative chart of the parameters as tested and as specified by Cheveron who are a standard manufacturer of such products, the adjudicating authority has held that the test results on the parameters of flash point and kinematic viscosity of impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us waste, and hence the test was conducted by one private laboratory, M/s Avon Food Labs Pvt Ltd. For justifying the same Commissioner (Appeal) has referred to the CBEC Circular No 09/2009-Customs, which states as follows:- "Reference is invited to the Notification No. 35/2004-(N.T)- Customs dated 19.3.2004 and Board's Circular No. 31/2004-Cus dated 26/4/2004 regarding the import and export of hazardous wastes. As the field formations were facing certain difficulties in getting such consignments tested before permitting their clearance, the matter was taken up with Ministry of Environment and Forests. 2. Now, it has been informed by Ministry of Environment and Forests (MoEF) that if Customs authorities need assistance for undertaking sampling and analysis of the hazardous waste consignments, they could utilise the facilities of the recognised laboratories. These laboratories are recognised from time-to- time by the Ministry of Environment and Forests under Section 12(1) (b) and Section 13 of the Environment (Protection) Act, 1986 (EPA) read with Rule 10 of the Environment (Protection) Rules, 1986. The labs notified by MoEF are authorised to test all kinds of samples of hazard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority for that provision. 4.10 During cross examination of Shri A K Maurya Chemical Examiner, CRCL New Delhi, following questions and their responses as recorded in order in original where by the doubt is raised in respect of the test reports are reproduced below: "Qn.2 I am showing you the test reports bearing CL No. 3952, 3953 and 3954 (I)/ 04.02.2015 dated 19.02.2015 i.e. RUD - 1 to 3 and letter C. No. 35/CUS/Corress/2013-14 dated 22.06.2015 i.e. RUD-5, signatures appended are yours and were opined by you? Ans. I confirm that tests were done by Chemical Assistant, CRCL In supervision of Assistant Chemical Examiner, CRCL and report bearing CL No. 3952, 3953 and 3954 (I)/04.02.2015 dated 19.02.2015 i.e RUD-I to 3 were opined by me. Further letter C.No. 35/CUS/Corress/2013-14 dated 22.06.2015 i.e RUD- 5 were opined in consultation with Supervisory Authority, CRCL. Qn.3 It is correct by simply referring PAH value without ascertaining the nature of product it can be arrived at conclusion of Hazardous Waste? Ans Yes, it is correct without ascertaining the/nature of product in question conclusion of hazardous waste cannot be made. And first we have to ascertain the chemical test ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record, we find that the order of re- export of the goods on payment of redemption fine within 30 days and if not complied with, the goods will be disposed of as per the statutory provisions, is in excess of jurisdiction conferred by the Statute, because the provisions of the Customs Act do not provide for re-export of the imported goods on payment of redemption fine and therefore the adjudication order was beyond the statutory provisions of the Customs rules. This proposition was considered by the Division Bench of the Tribunal in the case of HBL Power Systems Ltd. v. CC, Visakhapatnam [2018 (362) E.L.T. 856 (Tri. - Hyd.)] wherein the Tribunal in identical circumstances has analysed the scope of Section 125 of the Customs Act. It is relevant to reproduce Section 125, which is hereinbelow :- 125. Option to pay fine in lieu of confiscation. - (1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods for, where such owner is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of nine Judges along with the issue relating to unjust enrichment. Yet the question is whether it is permissible for the High Court to direct the authorities under the Act to act contrary to the aforesaid statutory provision. We do not think it is, even while acting under Article 226 of the Constitution. The power conferred by Article 226/227 is designed to effectuate the law, to enforce the Rule of law and to ensure that the several authorities and organs of the State Act in accordance with law. It cannot be invoked for directing the authorities to act contrary to law. In particular, the Customs authorities, who are the creatures of the Customs Act, cannot be directed to ignore or act contrary to Section 27, whether before or after amendment. May be the High Court or a Civil Court is not bound by the said provisions but the authorities under the Act are. Nor can there be any question of the High Court clothing the authorities with its power under Article 226 or the power of a Civil Court. No such delegation or conferment can ever be conceived. We are, therefore, of the opinion that the direction contained in Clause (3) of the impugned order is unsustainable in law." 12. We also f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prohibited by any law, those goods which have been imported may be permitted to be exported. The formal procedure of filing a shipping bill and observing other formalities relating to export of goods would have to be followed. There is no prohibition on the adjudicating authority from permitting re-export of the goods. When an adjudicating authority after ordering confiscation of imported goods permits their re-export, he is in effect first ordering the redemption of the goods on payment of fine and thereafter permitting them to be reexported. Each of these two actions is independent and is permitted by law. An order whereby both are combined, therefore, is not contrary to law. 11. If we take up the issue from another angle that where the adjudicating authority allows re-export of the prohibited goods and in such a case, by holding that the order of confiscation and redemption fine is not justifiable, this will make the provisions of Section 125 of the Customs Act redundant which specifically empowers the adjudicating authority to exercise his powers in respect of prohibited goods. As confiscation and redemption fine in lieu of confiscation and re-export are two independent action ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is relevant to note that while the Learned Member (judicial) holds that no redemption fine is imposable when re- export of goods is allowed, learned Member (Technical) does not hold otherwise. On the other hand, by interpreting the order of the Commissioner the Member (Technical) comes to the conclusion that no permission has been granted by the Commissioner to re-export and therefore the question that Commissioner cannot pass an order granting permission to re- export while imposing redemption fine does not arise in this case. In paragraph 48 of the order impugned the Commissioner refers to the argument as to whether simultaneous imposition of two conditions, namely, (i) imposition of fine in lieu of confiscation and (ii) direction to re-export can co-exist. Ultimately in paragraph 49 he rejects the request for release of 11.5 MTs of Lithopone and re-export of 10 MTs of Tetracycline. Thereafter in paragraph 50 he orders confiscation of the whole consignment containing 10 MTs of Tetracycline and 11.5 MTs of Lithopone under Section 111(d) and (m) of the Customs Act, 1962 read with Section 119 and Section 3 of the Foreign Trade Development & Regulation Act. An option to redeem the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to relevant rules. In the light of the above, there is justification in the view taken by the Learned Member (Technical) that the last sentence in paragraph 50(i) of the order may be treated as an observation with regard to the legal position. This is more so in view of the rejection of the prayer of the importer to release the goods for reexport in paragraph 49 of the order." 4.6 Similar view has been expressed by the tribunal in the decisions cited by the learned counsel. On going through the provisions of section 125 and the above referred decision the position of law emerges as follows: i. In terms of Section 125, officer adjudging the cases in relation to confiscation of goods shall confiscate the goods absolutely when the goods under adjudication are prohibited goods and in case where the goods are not prohibited he shall still confiscate the goods but allow the goods to redeemed on payment of redemption fine adjudged by him. ii. On redemption of the said goods the person redeeming the goods becomes the owner of the goods and he is entitled to deal with the goods in manner he likes. No condition can be imposed by the adjudicating authority for dealing the goods in partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Enviro-Legal Action vs. Union of India 1996(3) SCC 212 * Vellore Citizens' Welfare Forum vs. Union of India 1996(5) SCC 647 * The Oleum Gas Leak case (M.C. Mehta vs. Union of India) AIR 1987 SC 1086 * M. C. Mehta vs Kamal Nath & Ors (1997)1SCC388 4.15 Since the issue involves the hazardous good we would not be in position to permit the clearance of the goods without the active consideration of the same by the SPCBs/ PCCs who are the designated authority in terms of the rule 17 (2) of the Hazardous Waste Rules, 2008 and also as per the Board Circular of 2009, referred by us earlier. In our view now with the capability to ascertain the Hazardous Nature of the impugned goods CRCL should conduct proper re-test on the goods and give the report, to the concerned authorities in the matter. In our view revenue authorities should make a proper and justifiable opinion in the matter as to the nature of the goods after retesting of the same and in consultation with the concerned SPCB. On the basis of the said opinion, the appellant should be either permitted to clear the goods in DTA or re-export the same as per Rule 17 (2) of the Hazardous Waste Rules, 2008. In case importer do ..... 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