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TMI Blog2024 (6) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulations, 2009 and any determination by empowered authority of infraction thereto required Commissioner of Customs to ensure closure of hazardous chemicals storage facility. The question that arises is the existence of such determination. It is in the light of this exposition, made necessary by the lack of clarity in the show cause notice and impugned order, that the primary challenge of the appellant must be evaluated before proceeding to examine compliance with the mandate of Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989. For if the Commissioner of Customs is without jurisdiction to initiate action for breach of the Rules by reason of explicit lack of acknowledgement therein and/or by lack of domain competence to ascertain compliance, we, too, lack such jurisdiction. Accordingly, we have heard Learned Senior Counsel for the appellants and Learned Authorized Representative at length. The provisions of threshold is intended for goods in the territory of India and even the related provisions therein excludes any empowerment of customs officers. Thus, the empowerment to issue instructions cannot be stretched to cover the contents of the impugned circular withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... best left to the designated authorities under the relevant laws instead of claiming overarching authority merely from control of customs areas. The lack of jurisdiction and of domain competence precludes such inappropriate institution of proceedings. On this ground alone, the impugned order fails. Appeals are, accordingly, allowed. - MR C J MATHEW, MEMBER (TECHNICAL) AND MR AJAY SHARMA, MEMBER (JUDICIAL) Shri Rahul Narichania, Senior Advocate with S/Shri Vishal Sheth and Bimal Rajsekhar, Advocates for the appellants Shri Ram Kumar, Assistant Commissioner (AR) for the respondent ORDER M/s APM Terminals India Pvt Ltd operates two container freight station (CFS) , designated as Annexe and as Main , at Dronagiri Warehouse Complex, Navi Mumbai and, duly grandfathered as custodian of imported goods in terms of section 45(1) of Customs Act, 1962 by Commissioner of Customs, was also accorded approval under Handling of Cargo in Customs Areas Regulations, 2009 as customs cargo service provider (CCSP) that was being renewed every five years with the latest effective from 15th March 2020. They are aggrieved by restriction on their operations, imposed in separate orders [order-in-original no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs Act, 1962. If, indeed, that be so, the gravitas of such illicit appropriation of authority without legislative empowerment must have consequences from which the entire customs administration may distance themselves only on peril of having been complicit as silent spectators in massacre of rule of law. We are constrained to place this on record at the outset, and before dwelling on the merit of their contentions, as, even though the appellant has set out such as the framework of appellate recourse, the remit of the Tribunal, not extending to scrutiny of individual actions save in the context of penal detriment contemplated under law, does not permit us to go beyond determination of an impugned detriment as legal and proper leaving it to institutional oversight to amend that which may, in themselves, appear deficient. 2. It would appear that the factual core of the dispute is the alleged deliberate disregard of purported quantitative stipulation on both the pass through of specified chemicals during a calendar year as well as the peak for every calendar month; at least, that is our comprehension of the mind of the adjudicating Commissioner from the portrayal of the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n September 2021, 36.94 tons in September 2021, 35.92 tons in April 2021 and 64.56 tons on some unknown day of the particular month, breached the obligation to get transactions, exceeding the threshold of 60 tons, 50 tons, 5 tons, 20 tons and 10 tons for rule 4,5,7,8,9,13,14 and 15 of Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989 and of 600 tons, 500 tons, 50 tons, 200 tons and 100 tons for rule 10 to 12 of Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989, regularized in the manner stipulated therein and that similarly, as operator of CFS (Main), had, by handling of 2174.93 tons of diphenyl methane di-isocyanate during January-December 2021 and of 180 tons in June 2021, breached the obligation to get transactions, exceeding the threshold of 20 tons for rule 4,5,7,8,9,13,14 and 15 of Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989 and of 200 tons for rule 10 to 12 of Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989, regularized in the manner stipulated. 4. It would appear from the narrated litany in the show cause notice that the appellant, as operator of CFS (Annex), had been permitted, by letter of 5th Feb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as authority conferred transitively on the jurisdictional Commissioner of Customs to initiate the impugned suspension and penal detriment on the appellant in the narrated circumstances. The dovetailing of these deserves some attention. 6. It is common ground that the appellant, as custodian , is engaged with customs authorities in terms of section 45 of Customs Act, 1962. In contrast with the predecessor Sea Customs Act, 1878, which saddled customs authorities with custodianship, Customs Act, 1962 introduced third party custodianship which, for the most part and for long, had been confined to port trusts established under Major Port Trusts Act, 1963. It is also common ground that the code of give and take , notified as Handling of Cargo in Customs Areas Regulations, 2009 under the authority of amended section 141 of Customs Act, 1962 - intended for overarching control over conveyances and goods in customs areas and for operationalizing chapter III of Customs Act, 1962 specifically, brings custodians too within its fold. Exponential growth in international trade made for altering the contours of handling of cargo and enlarging the statutory framework of custodianship beyond that o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solidity of legal consequence. Confusion in laying out of the charges and chaos of blurred jurisdiction is certain to be manifest as metaphorical improvised explosive device which is abundantly demonstrated in the rambling narrative preceding peremptory conclusions, that have nothing to do with the statute, rules or regulations, in the impugned orders. Of particular significance is 19. The facts of the case are that the premises of the CFS, M/s. APM Terminals India Pvt. Ltd. -Main CFS has been duly notified by the Customs as a Customs area declared as Custodian of CFS vide Notification No. 07/2008 dated 07.10.2008. The noticee M/s. APM Terminals India Pvt. Ltd. - Main CFS is declared as CCSP under Regulation 10 of HCCAR, 2009 vide Notification No 20/2010 dated 15,03.2010 later renewed time to time latest vide Public Notice No. 110/2020 dated 07.09.2020. The renewal of authorization for handling and storage of hazardous cargo was granted to CCSP vide this Office letter dated 18.05.2017 for period of 02 Years w.e.f 18.05.2017. The CCSP was also granted authorization for handling, storing, receipt or dispatch of Hazardous DPD containers at the CFS, vide this office letter dated 14.09. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 10.01.2021 JNCH Public Notice No. 129/2020 as well as other law regulations. Further, CCSP's claim that the nature of the cargo dealt by any CFS is beyond the scope of the Customs Act, 1962 is not sustainable as Section 141 (2) read with Section 157 of Customs Act, 1962, empowers Customs to make rules/ regulation regarding goods to be received, stored, delivered, despatched or otherwise handled in a customs area. I also reiterate that the SCN is not issued under Rule 2(b), 3 and Schedule-5 of MSIHC, 1989. It is also confirmed from the Safety Audit Report that CCSP has exceeded the threshold limit for the hazardous cargo from Jan 2020 to Dec 2020 from Jan 2021 to Dec 2021 and continued to store Hazardous good without the permission from the Jurisdictional Commissioner and hence has violated Regulation 6 (1)(i) and 6 (l)(q) of the Handling of Cargo in Customs Areas Regulations, 2009. 24. Condition under Regulation 5 of HCCAR, 2009, which concerns overall safety and security of the premises may not be subjected to exemption by any authority. Para 5 of Circular No. 04/2011-Cus dated 10.01.2021, also reiterates that it has been decided that no relaxation or exemption from requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to those very statutes having nothing to do with the parent legislation for prescribing the threshold in the Rules alleged to have been the infracted by the appellant. The finding that life of personnel were endangered and that safety of goods were compromised is also bereft of any logical determination and has all the appearances of emotional outrage that has no place in an adjudicatory proceedings intended to deprive the noticee of approval to undertake commercial activities. 9. We gather that the abomination prompting the indefinite suspension till the appellant fell in line with some purported mandatory requirement not under Customs Act, 1962, not the Rules or Regulations framed thereunder and not under any other law empowering customs officers to enforce some provision therein enjoined upon customs cargo service provider (CCSP) by public notice no. 129/20 dated 7th October 2020 which, it appears, recalls the instructions of close to a decade earlier from Central Board of Excise Customs (CBEC) pertaining to handling of hazardous chemicals that was contained in circular no. 4/2011-Cus dated 10th January 2011 and, in particular, enjoining regular safety audits in accordance wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by later enactment in the statute, existed before both Manufacture Storage and Import of Hazardous Chemicals Rules, 1989 (MSIHCR, 1989) and its parent Environment Protection Act, 1986 which, owing to its non-discriminatory applicability, governed custodians whether of the statutory class, i.e., port trusts or the approved class. It must, therefore, be presumed to have been obligatory for container freight stations to be compliant with the said Rules even before 2009 and the onset of familiarity of Commissioners of Customs with the mandate on hazardous chemicals for customs cargo service providers (CCSP) by the circular supra. Hence, we would not be in error to hold that the mandate of Manufacture Storage and Import of Hazardous Chemicals Rules, 1989 (MSIHCR, 1989) operated independently of oversight under the Handling of Cargo in Customs Area Regulations, 2009 and any determination by empowered authority of infraction thereto required Commissioner of Customs to ensure closure of hazardous chemicals storage facility. The question that arises is the existence of such determination. 11. It is in the light of this exposition, made necessary by the lack of clarity in the show cause n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another law, including Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989 (MSIHCR, 1989), for detriment under the impugned Regulations. We have also examined supra the chronology of the regulatory oversight under Environmental Protection Act, 1986 over facilities such as container freight stations (CFS) even before the authority to frame Regulations under section 141 of Customs Act, 1962 was vested in the Central Board of Excise Customs (CBEC) on 10th May 2008. Consequently, the oversight under the authority of Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989 (MSIHCR, 1989) existed, and exists, independent of any authority created by or acknowledged in Customs Act, 1962, including Central Board of Excise Customs (CBEC), and from earliest of times without any contemplation to confer parallel authority either in the subsequent incorporation in section 141 of Customs Act, 1962 or in Handling of Cargo in Customs Area Regulations, 2009. That this restriction was fully acknowledged is apparent from disinclination on the part of Central Board of Excise Customs (CBEC) to extend the Regulations and, instead, preferring to communicate the importance of compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd even for such purposive extent as impugned proceedings has, into the Handling of Cargo in Customs Area Regulations, 2009. There was, thus, no instrument that the Commissioner of Customs could have drawn upon to sustain the proceedings initiated in the show cause notice and concluded by the impugned order. 15. The scheme of Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989 (MSIHCR, 1989) envisages four aspects of handling of chemicals for instituting obligation therein in connection with industrial activity ; while there is no whiff of industrial activity in the operations of the appellant, the inclusion afforded to isolated storage confers the status of occupier on them. The four aspects are major accident , approval and notification of sites , safety audit and import ; threshold so lavishly scattered in the show cause notice and impugned order engages occupiers who are in excess thereof which, in the context of the impugned proceedings, is relevant to approval by the competent authority under rule 7 therein as well as stipulation of consent on alteration from the terms for approvals obtained initially. That the appellant was indeed required to obtain approval i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm the detriment to the appellants has most severely jeopardized the legality of the outcome in the impugned order. That those proceedings before the Maharashtra Pollution Control Board are not connected to the impugned Rules is further evident from scattered reference to such notice in the documents and submissions; the impugned Rules make no room for issue of notice save in instances of deficiency in documentation and the notices, that seem to have weighed with the Commissioner of Customs, could have no bearing on the continued operation of the appellants as customs cargo service provider (CCSP) considering the tutelary and capacity building intent of the Rules. Thus, the legal foundation of the impugned order is seriously unsettled. 17. It can be seen that the legislative framework does not envisage the tax administration patently lacking in domain competence and domain exposure to address and enforce environmental concerns to undertake oversight of compliance with Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989 (MSIHCR, 1989). That is best left to the designated authorities under the relevant laws instead of claiming overarching authority merely from contro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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