Madras High Court
The Commissioner Of Customs vs M/S.Mass Trading Company on 5 June, 2013
Bench: Chitra Venkataraman, K.B.K.Vasuki
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 05.06.2013
CORAM:
THE HONOURABLE Mrs.JUSTICE CHITRA VENKATARAMAN
and
THE HONOURABLE Ms.JUSTICE K.B.K.VASUKI
Civil Miscellaneous Appeal No.2876 of 2012
and
Writ Petition No.28716 of 2012
and
M.P.Nos.1 and 1 of 2012
The Commissioner of Customs
Custom House,
No.60, Rajaji Salai,
Chennai 600 001. .. Appellant in C.M.A.No.2876 of 2012
& R1 in W.P.No.28716 of 2012
Vs.
M/s.Mass Trading Company,
A-25, Rani Anna Nagar,
Chinnathirupathi
Salem 636 008. .. Respondent in C.M.A.No.2876 of 2012
& Petitioner in W.P.No.28716 of 2012
2. Additional Commissioner of Customs,
Custom House, No.60, Rajaji Salai,
Chennai 600 001. .. Respondent in W.P.No.28716 of 2012
APPEAL under Section 130 of the Customs Act, 1962 against the order dated 17.4.2012 made in Misc. Order No.242/12 in Common Final Order No.1328-1329/2011 dated 23.12.2011 on the file of the Honourable Tribunal (Customs, Excise and Service Tax Appellate Tribunal).
PETITION under Article 226 of The Constitution of India praying for the issuance of Writ of Mandamus directing the respondents to complete the adjudication proceedings in respect of the bills of entry Nos.790386 and 790354 (both dated 24.2.2011) within a period of one month.
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For Appellant in C.M.A.No.2876 of 2012
and for respondents in W.P.No.28716 of 2012 : Mr.Ravi Anantha Padmanabhan
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For Respondent in C.M.A.No.2876 of 2012
and for petitioner in W.P.No.28716 of 2012 : Mr.P.R.Renganath
for Mr.R.Raghavan
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C O M M O N J U D G M E N T
(Judgment of the Court was delivered by CHITRA VENKATARAMAN,J.) The present Civil Miscellaneous Appeal, filed by the Revenue as against the order of the CESTAT, was admitted by this Court on the following substantial questions of law:
"(1) Whether the order of the CESTAT dated 17.4.2012 is legal inasmuch as CESTAT in a Miscellaneous Application filed under Rule 41 of the CESTAT (Procedure) Rules, 1982 passed fresh Orders overriding its own Order, which provided for reference to the Pollution Control Board for ascertaining whether the impugned goods were Hazardous Waste.
(2) Whether or not the CESTAT is right in directing the department to get the goods examined by the Pollution Control Board, when the Pollution Control Board is not a prescribed authority for identification of Hazardous Waste as per the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008 read with various Schedules thereof.
(3) Whether the order of the CESTAT dated 17.04.2012 is correct in directing the department to clear the goods without any evidence to establish that the impugned goods are not Hazardous Waste, and despite the legal position within the aforesaid Rules."
2. The respondent/importer has also filed a Writ Petition before this Court seeking a Writ of Mandamus to direct the Revenue to complete the adjudication proceedings in respect of its Bill of Entry Nos.790386 and 790354, both dated 24.2.2011 within a period of one month. The importer also filed a Miscellaneous Petition in the Writ Petition seeking release of the consignment of imported goods, namely, used tyres of different sizes and waive payment of demurrage, rent and detention charges in terms of Regulation 6(1) of the Handling of Cargo in Customs Areas Regulation, 2009.
3. The facts leading to the filing of the Civil Miscellaneous Appeal by the Revenue and the Writ Petition by the importer are as follows:
The petitioner herein imported second hand used pneumatic tyres. It is stated that these tyres, at the time of import in 2011, had five years of residual useful life as distinct from waste/end of life tyre. The importer filed documents relating to the value and description of the goods declared. Since the tyres imported were old and used and the contemporaneous import value for similar or identical items were not available, there was a first check appraisement to ascertain the actual description of goods and appraise the value thereof with the help of an independent approved Chartered Engineer. The importer engaged the services of the Chartered Engineer M/s.SGS India Private Limited, Chennai for the said purpose. Under report dated 28.2.2011, it certified the goods covered by Bill of Entry as old and used tyres and the value was appraised by the valuer. Considering the fact that the report was inconclusive as regards the actual nature and description of goods, taking note of the fact that there were information received through DRI that hazardous waste were being dumped into the country and the first appraiser was not adhering to the professional ethics, the Department decided to go for re-examination and appraisal of goods in the presence of another Chartered Engineer, namely, M/s.Inspectorate Griffith India Pvt. Ltd. (IGIPL), Chennai. By report dated 30.5.2011, the second Chartered Engineer stated that the goods were used pneumatic tyres, meant for usage in passenger cars. They further observed that even though these tyres visually appeared as available for further use, they could generate unseen safety hazards, since the source and history of them and the manner in which they used were unknown; identifying invisible internal problems associated with used tyres was difficult and by visual inspection, compliance of structural safety could not be detected. The Additional Commissioner of Customs viewed that the Chartered Engineer impliedly indicated that the tyres were in the nature of wastes, which would ultimately result in causing damages to safety, health and environment. Thus the goods had to be classified under CTH 4004 0000 and in terms of ITC HSN, the same were restricted for import.
4. The Authority viewed that in terms of Serial No.B3140 of Schedule B appended to The Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008, import of waste pneumatic tyres, excluding those which do not lead to resource recovery, recycling, reclamation or direct reuse requires license from Ministry of Environment and Forests. The importer was required to register himself with the Ministry in terms of Rule 14 for importing any hazardous waste for purposes of recycling and reuse. In the absence of compliance, the importer has to re-export the said hazardous waste within a period of 90 days from the date of import. In the absence of non-compliance of Rules for importing any hazardous wastes for the purpose of recycling, reclamation or direct reuse and with the description of the subject goods being suppressed, the importer was called upon to show cause as to why the imported goods under the Bill of Entry dated 24.2.2011 should not be held as waste pneumatic tyres and the transaction values of goods imported should not be rejected. Apart from that, in view of misdeclaration of the value and the violation of the provisions of the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008, confiscation under Section 111(m) and 111(d) of the Customs Act, 1962 read with Rule 14 of the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008 and in view of the non-compliance of the provisions of the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008, the importer was also asked to show cause as to why goods should not be re-exported under Rule 17 of the Rules. Apart from that, penalty was also proposed as per Section 112(a) of the Customs Act, 1962.
5. After hearing the importer, the Additional Commissioner of Customs ultimately passed an order on 22.07.2011, confirming the proposal that the imported used old tyres were hazardous waste, classifiable under CTH 400 40000; that the transaction value was determined at Rs.3,48,628/- and Rs.3,56,525/-, thereby rejecting the value given in the Bill of Entry. The order resulted in the compensation under Section 111(d) and 111(m) of the Customs Act, 1962 read with Rule 17 of the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008, Section 11 of the Foreign Trade (Development & Regulation) Act, 1992 and Rules 11 and 14 of the Foreign Trade (Regulation) Rules, 1993. The Authority permitted the importer to redeem on payment of a fine of Rs.1,00,000/- under Section 125 of the Customs Act for export only. A sum of Rs.2,00,000/- was imposed to the importer under Section 112(a) of the Customs Act. The option for redemption was to be exercised within 30 days from the date of receipt of the order.
6. Aggrieved by this, the importer went on appeal before the Commissioner of Customs (Appeals). On going through the two certificates, the Commissioner of Customs (Appeals) held that the Department was wrong in not referring the matter to the Pollution Control Board. Once a doubt was entertained that the goods would be hazardous, the certificate from the Pollution Control Board would have been a final word on the issue. In the circumstances, the Commissioner of Customs (Appeals) directed the lower authority to take further action to get the inspection done by the Pollution Control Board and to have a certificate from them within a period of 15 days from the date of receipt of a copy of the order. If the goods were not hazardous, then the order imposing the condition of re-export for redemption would be set aside leaving the other portion untouched, since the case for confiscation existed in view of the import of restricted goods without a licence. Aggrieved by this, the importer went on appeal before the CESTAT. So too the Revenue.
7. By order dated 23.12.2011, while confirming the remand by the first Appellate Authority, the Tribunal modified the order on fine and penalty that even before arriving at a decision, the same could not be levied. Thus the Tribunal directed the original authority to decide the matter afresh within a month's time from the date of receipt of the order of the Tribunal. Subsequent thereto, the importer filed a petition in Miscellaneous Application No.242 of 2012 on 16.3.2012 before the Tribunal, pointing out that even as on the date of passing of the order, the Revenue had had the benefit of the letter from the Tamil Nadu Pollution Control Board dated 14.10.2011, which was not submitted before the Tribunal when the case was heard by the Tribunal. According to the importer, the letter from the Pollution Control Board contained nothing prejudicial to the Revenue; consequently, the importer sought for modification of the order seeking release of the consignments. The Tribunal passed an order dated 17.4.2012 allowing the prayer of the importer and thereby directed the release of the goods in terms of an order passed under similar circumstances by this Court in W.P.Nos.8274, 8372 and 8512 of 2011.
8. A reading of the order passed by the CESTAT shows the reliance placed by the importer to the order of this Court in W.P.Nos.8274, 8372 and 8512 of 2011 ordering release of the similar goods other than end-of-life tyres. Even though the Revenue took objection that the Pollution Control Board did not give a categorical statement regarding the hazardous nature of the import, yet, the Tribunal persuaded itself to pass an order in favour of the importer that the Pollution Control Board had not given a categorical certificate on the impugned consignment and that this Court had passed an order directing release of goods on terms, under similar circumstances. Aggrieved by this, the present Civil Miscellaneous Appeal has been preferred by the Revenue.
9. It is a matter of record that the order passed by this Court in W.P.Nos.8274, 8372 and 8512 of 2011 was taken on appeal by the Revenue in W.A.Nos.929 to 931 of 2011. By order dated 26.09.2012, this Court pointed out that the order appealed against by the Revenue was as against the order passed on 27.4.2011 in the Miscellaneous Petitions and not, in fact, in the main Writ Petitions; yet, considering the prayer being one and the same, this Court took note of the pendency of the Writ Petitions and passed a common order in the writ appeal as well as in the writ petitions. It is a matter of record that the said writ petitions were preferred by a different assessee who had imported used tyres. These were also subjected to examination by the very same valuers who had done the appraisal in the case before us. The consignment by one of the importers' writ petitions were worn out tyres.
10. A reading of the order of the Division Bench of this Court dated 26.09.2012 shows that during the pendency of the Writ Petitions, this Court directed the Tamil Nadu Pollution Control Board to examine the goods and file a report before this Court in order to have the detailed facts about the nature of import. After referring to the Pollution Control Board's report dated 19.10.2011, this Court held that the imported tyres involved in the Writ Petitions were 6+ years old and that they could not be made use of until and unless they were re-treaded and even after re-treading, they could not be made use of for quite a long time. In the light of the same, this Court allowed the Writ Appeals of the Revenue and set aside the order of the learned single Judge, ordering release on terms. The importers were directed to send back the imports to the countries of origin at their own cost and expenditure immediately. Thus, the order in the Writ Petitions (which in fact was only in Miscellaneous Petitions), which persuaded the Tribunal, is no longer there for the importer to seek release of the goods on terms.
11. Learned Standing Counsel appearing for the Revenue pointed out that when the very basis of the order of the Tribunal is no longer there, the order of the Tribunal directing release of the goods on certain terms has to be necessarily set aside and the importer cannot have free clearance of the goods imported. He pointed out that as contended before the Tribunal, the Pollution Control Board's report dated 14th October, 2011 or for that matter 7th March, 2012, discussed nothing about the hazardous character of the imported goods. In the circumstances, the question of the importer having a straight clearance does not arise.
12. Per contra, learned counsel appearing for the Writ Petitioner submitted that the order of this Court in the Writ Appeal is now a subject matter of appeal before the Apex Court. In the circumstances, in the absence of anything objectionable in the report of the Pollution Control Board, the Revenue cannot resist the order of the Tribunal. He particularly laid stress on the penultimate paragraph of the order of the Tribunal observing that the Pollution Control Board Authorities, who had inspected the impugned consignment, had not given any categorical certificate that the goods comprised in the impugned consignments was hazardous waste. Consequently, he pleaded for release of the goods.
13. Heard learned Standing Counsel appearing for the Revenue and the learned counsel appearing for the Writ Petitioner and perused the materials placed before this Court.
14. We do not find that there is any justifiable ground to reject the plea of the Revenue, thereby allow the case of the Writ Petitioner. Firstly, the basis of the order of the Tribunal, namely, order in the Writ Petitions (Miscellaneous Petitions), is no longer there for the importer to claim the orders of release on terms too.
15. A reading of the order of the Tribunal, which is now under appeal before this Court, shows that the importer sought for release of the goods placing reliance on the order passed by this Court in the Writ proceedings. The Revenue took a serious objection that the Pollution Control Board's report did not say anything categorically as regards the hazardous nature of the imported goods; in which event, when the certificate itself is not in speaking terms, which would persuade this Court to allow the release of goods and with the order of this Court in Writ Appeals setting aside the earlier order of release of similar worn out tyres in the Writ Petitions, we do not find any justifiable ground to confirm the order of the Tribunal, so as to allow the release of the goods imported by the importer.
16. We have gone through the report of the Pollution Control Board, which is also enclosed in the paper book filed by the importer herein. We do not find any reason to accept the claim of the importer based on these certificates, for, as rightly pointed out by the Revenue, the certificate speaks nothing on the absence or presence of any hazardous material or the likelihood of its giving out any hazardous material when put to use even after re-treading. We find that the Tribunal, on the first occasion, in the order dated 23.12.2011, had correctly directed the authorities to obtain a report from the Pollution Control Board. It was only the assessee/importer, who filed the Miscellaneous Petition before the Tribunal and sought for re-consideration of the order passed on the basis of the report of the Pollution Control Board dated 14.10.2011, which was available at the time when the Tribunal originally passed the order on 23.12.2011. If the Tribunal had gone into the certificate issued by the Pollution Control Board dated 14.10.2011 to find out as to whether it had categorically pronounced on the hazardous character of the imported material, it is one thing for this Court to say that if a finding of fact is there, the Revenue would not be justified in resisting the order of release. As already pointed out, a cursory reading of the Pollution Control Board certificate shows that it has not pronounced anything on the hazardous character of the imported material at all. On the other hand, it merely referred to the earlier two reports as well as the physical condition of the tyres imported and ultimately observed as follows:
"On examining the condition of the tyres it is observed that the buttons and grooves 12" , 13" and 15", imported tyres were intact and they were not worn, but the tyres are found to be used ones (Photographs Enclosed). On further verification of the documents it is observed that the consignments have been inspected on 28.02.2011 by M/s.SGS India Private Limited, Perungudi based on Custom Examination Order dated 25/02/2011.
Subsequent inspection was carried out by Inspectorate Griffith India Private Limited, Chennai 600 001 at the insistence of the Customs Authorities (Copy enclosed).
It is submitted that Waste pneumatic tyres is listed as on un-starred item in Part B of Schedule III vide item No.B 3140; and according to Hazardous Waste (Management, Handling and Transboundary) Rules 2008 and amendment 2010 after obtaining prior permission of Ministry of Environment & Forests, Government of India.
Hence as per the provisions of Hazardous Waste (Management, Handling and Transboundary) Rules 2008 and amendment 2010, the waste pneumatic tyres can be imported to the country with the permission of Ministry of Environment & Forests."
17. We do not think this report could be accepted as categorically speaking on the condition of the tyres as required for the purpose of their release. Considering the above, we have no hesitation in setting aside the order of the Tribunal dated 17.04.2012 and restoring the matter back to the Adjudicating Authority as was originally done by the Tribunal in its order dated 23.12.2011 to decide the matter afresh after getting a report from the Tamil Nadu Pollution Control Board. Considering the demurrage incurred by the importer, we direct the Additional Commissioner of Customs, DEPB/adjudicating authority to get the certificate from the Tamil Nadu Pollution Control Board on the imported item within a period of six weeks from the date of receipt of a copy of this order and after furnishing a copy of the report to the importer, pass orders on merits and in accordance with law within a further period of six weeks.
18. The Civil Miscellaneous Appeal is disposed of accordingly. No costs. Consequently, M.P.No.1 of 2012 is closed.
19. In the light of the order passed in the Civil Miscellaneous Appeal, it is not necessary to go into the merits of the Writ Petition, for, nothing survives in the writ petition. Accordingly, the Writ Petition stands dismissed. No costs. Consequently, M.P.No.1 of 2012 is also dismissed.
sl To
1. The Commissioner of Customs, Custom House, No.60, Rajaji Salai, Chennai 600 001.
2. Additional Commissioner of Customs, Custom House, No.60, Rajaji Salai, Chennai 600 001.
3. The Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench Chennai