Madras High Court
M/S.Anand Impex vs The Commissioner Of Customs on 27 February, 2012
Author: M.Jaichandren
Bench: M.Jaichandren
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 27-02-2012 CORAM THE HON'BLE MR.JUSTICE M.JAICHANDREN W.P.Nos.21732 to 21733, 21985 to 21988, 22081, 26681, 6682, 26837, 27187, 27188, 27946 of 2011 and W.P.Nos.429, 434, 435, 436, 570, 578, 866, 2182, 2196 of 2012 M/s.Anand Impex 507/31, Jessore Road, Debendra Nagar, Dum Dub Kolkata-700 074, Rep. By its Proprietor Tapan Kumar Saha .. Petitioner. Versus 1. The Commissioner of Customs, (Seaport-Imports), Customs House, No.60, Rajaji Salai, Chennai-600 001. 2. The Additional Commissioner of Customs (Gr.5A), Customs House, No.60, Rajaji Salai, Chennai-600 001. 3. The Assistant Commissioner of Customs (Gr.5A), Customs House, No.60, Rajaji Salai, Chennai-600 001. .. Respondents. Prayer in W.P.No.21732 of 2011 : Petition filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Mandamus directing the respondents herein to assess and clear the goods imported by the petitioner hereby covered by Bill of Entry No.3740944, dated 8.6.2011, comprising of 118 units of secondhand Digital Multifunction Print and Copying Machines, by adequately safeguarding the interest of the petitioner by issuing appropriate detention certificate to avoid payment of detention and demurrage charges in terms of Regulation 6(1) of the Handling of Cargo in Customs Area Regulations, 2009. For petitioners in W.P.Nos.21732 to 21733 of 2011 : Mr.R.Thiagarajan Senior Advocate for MR.N.Viswanathan For respondents in W.P.Nos.21732 to 21733 of 2011 : Mr.K.Ravi Anantha Padmanabhan (R1 to R3) : M/s.Reeta Chandrasekaran (R4) : Mr.S.Udayakumar (R5) For Petitioners in W.P.Nos.21985 to 21988 of 2011: : Mr.P.Jagadeesan For Respondents in W.P.Nos.21985 to 21988 of 2011: : Mr.K.Ravi Anantha Padmanabhan (R1 & R2) : Ms.P.Bhuvaneswari (R3) : M/s.Reeta Chandrasekaran (R4) : Mr.S.Udayakumar (R5) For petitioner in W.P.No.22081 of 2011: : Mr.R.Thiagarajan Senior Advocate for MR.N.Viswanathan For respondents in W.P.No.22081 of 2011 : Mr.K.Ravi Anantha Padmanabhan (R1 to R3) : M/s.Reeta Chandrasekaran (R4) : Mr.S.Udayakumar (R5) For Petitioners in W.P.Nos.26681, 2682, 26837, 27187, 27188 and 27946 of 2011: : Mr.A.K.Jayaraj For Respondents in W.P.Nos.26681, 2682, 26837, 27187, 27188 and 27946 of 2011: : Mr.K.Ravi Anantha Padmanabhan (R1 & R2) : Ms.P.Bhuvaneswari (R3) : M/s.Reeta Chandrasekaran (R4) : Mr.S.Udayakumar (R5) (Except in W.P.No.27946 of 2011) For Petitioners in W.P.Nos.429, 434, 435, 436, 570 and 578 of 2012: : Mr.B.Satish Sundar For Respondents in W.P.Nos.429, 434, 435, 436, 570 and 578 of 2012: : Mr.K.Ravi Anantha Padmanabhan (R1 & R2) : Mr.S.Udayakumar (R3) For Petitioner in W.P.No.2182 of 2012: : Mr.A.K.Jayaraj For Respondents in W.P.No2182 of 2012 : Mr.K.Ravi Anantha Padmanabhan (R1 & R2) : Ms.P.Bhuvaneswari (R3) : Mr.S.Udayakumar (R4) For Petitioners in W.P.No.866 of 2012 : Mr.A.K.Jayaraj For Respondents in W.P.No.866 of 2012 : Mr.K.Ravi Anantha Padmanabhan (R1 & R2) : Ms.P.Bhuvaneswari (R3) : M/s.Reeta Chandrasekaran (R4) : Mr.S.Udayakumar (R5) For Petitioners in W.P.No.2196 of 2012 : Mr.A.K.Jayaraj For Petitioners in W.P.No.2196 of 2012 : Mr.K.Ravi Anantha Padmanabhan (R1 & R2) : Ms.P.Bhuvaneswari (R3) : Mr.S.Udayakumar (R4) COMMON ORDER
Heard the learned counsels for the petitioners and the learned counsels appearing for the respondents.
2. It has been stated that the petitioners had imported second hand Digital Multifunction Print and Copying Machines, imported under the various Bills of Entry. However, the customs officers concerned, the respondents herein, had detained the goods in question, without having proper reasons to do so.
4. The petitioners have filed the present writ petitions praying that the customs authorities concerned may be directed to release the goods in question, on payment of the applicable customs duties, on the declared value of the goods, as declared by the petitioners, and on their furnishing the necessary provisional duty bonds, pending final assessment, by the authorities concerned, in order to safe guard the interest of the Revenue, in terms of Section 18 of the Customs Act, 1962, read with Customs (Provisional Duty Assessment) Regulations, 1963.
5. The petitioners had further stated that they had imported the second hand Digital Multifunction Print and Copying Machines, of various models, from their overseas suppliers. They had also filed the Bills of Entry, with the assessment group concerned, at the Chennai Custom House, declaring the value of the imported goods, for the purpose of assessment and sought the clearance of the goods, under `Free Importability', as second hand capital goods, in terms of Paragraph 2.17, read with Paragraph 9.12 of the Foreign Trade Policy, and Paragraph 2.33 of the Hand Book of Procedures of 2009-14. However, the respondent Customs authorities concerned had not taken up the goods for examination, for assessing their value, for the payment of the customs duty. Due to the delay caused by the respondent customs authorities the petitioners are incurring heavy financial losses due to the payment of detention and demurrage charges.
6. It had been further stated that the import of second hand Photo Copiers and Second Hand Digital Multifunction Print and Copying Machines has been permitted, for over two decades. While so, the Customs Tariff Act, 1975, had been amended, from the month of December, 2006, in terms of which a new sub-heading, bearing No.8441 3100 had been inserted for the Digital Multifunction Print and Copying Machines, while the Photo Copier Machines had been shifted and introduced under Customs Tariff heading No.8443 3930 of the Customs Tariff Act, 1975, from the previous Tariff Heading No.9009 1200.
7. As such, the separate classifications made for Photo Copiers and Second Hand Digital Multifunction Print and Copying Machines made it clear that they were distinct and different goods. Further, the Foreign Trade policy had also recognized the different classifications for such machines in the ITC (HS) classifications of Export and Import Items, by the Directorate General of Foreign Trade, Ministry of Commerce and Industry, Department of Commerce. The Supreme Court had also held that the second hand Photo Copiers are capital goods and therefore, they are freely importable into India. Thereafter, the Ministry of Commerce had accepted the goods as second hand capital goods. However, certain restrictions had been imposed on the import of the old and used Photo Copiers, by way of a notification, bearing No.31/2005 RE, dated 19.10.2005, by amending paragraph 2.17 of the Foreign Trade Policy. However, the second hand Digital Multifunction Print and Copying Machines had been classified differently, as such machines were distinct and different in nature.
8. It had been further stated that the customs authorities concerned, while assessing the second hand Digital Multifunction Print and Copying Machines, under sub-heading 8441 3100 of the Customs Tariff Act, 1975, had, invariably, enhanced the value of the goods, for the purpose of assessment, by engaging the services of approved chartered engineers, while rejecting the true and correct value of the goods declared by the importers. The authorities concerned were also insisting on the production of a licence for importing such machines and they had been passing orders of adjudication for violation of the Foreign Trade Policy. Thus, the authorities concerned did not allow the clearance of the second hand Digital Multifunction Print and Copying Machines, without adjudication and without imposing fine and penalty. This Court had passed a number of orders directing the release of such goods, by the customs authorities concerned, without insisting on the production of the licence for their import. The orders passed for the release of the goods, in the writ petitions filed by a number of importers, had also been confirmed by the orders passed by the Division Bench of this Court.
9. It had also been stated that the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore, had passed final orders, recently, in its final Order, bearing Nos.405 to 416 of 2011, dated 29.6.2011, holding that the action of the customs authorities, in confiscating old and used second hand Digital Multifunction Print and Copying Machines, under Section 111(d) of the Customs Act, 1962, for non-production of the licence, under Paragraph 2.17 of the policy, is contrary to law.
10. It had also been stated that the respondent customs authorities had not assessed the goods, for a long time, contrary to the instructions issued by the Central Board of Excise and Customs, New Delhi, in its Circular bearing No.42/2001-Cus, dated 31.7.2001, which requires the speedy clearance of the imported goods, for the avoidance of the payment of detention and demurrage charges, by the importers of the goods concerned. Since, the goods under import do not fall under the category of prohibited goods there cannot be any impediment for the respondents to proceed with the assessment and clearance of the goods. Further, the request of the petitioners, for the appointment of the chartered engineers, listed in Appendix-V of the Handbook of Procedures 2009-14, for the purpose of examination and clearance of the goods, had not been accepted by the respondent customs authorities.
11. Further, they had not permitted the clearance of the goods, by the petitioners, in terms of Section 18 of the Customs Act, 1962, read with Customs (Provisional Duty Assessment) Regulations, 1963, causing serious hardship and financial loss to the importers of the goods in question. The petitioners are also incurring heavy financial loses due to the payment of the detention and demurrage charges, in respect of the goods in question. In such circumstances, the petitioners have preferred the above writ petitions, before this Court, under Article 226 of the Constitution of India.
12. In the counter affidavits filed on behalf of the respondents, the averments and allegations made by the petitioners, in the affidavits filed in support of the writ petitions, have been denied. It has been stated that the petitioners had not complied with the necessary requirements for the examination and the assessment of the goods in question. It has been further stated that, on 4.7.2011, the Central Board of Excise and Customs had issued a circular, bearing Circular No.27/2011-Cus, making it mandatory for all the Commissionerates to examine the imported old and used second hand Digital Multifunction Print and Copying Machines, in view of the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008. Therefore, even assuming that no import licence is required at present, for importing such machines, the petitioners are expected to produce the necessary permission granted in their favour, for importing such machines, from the Ministry of Environment and Forests, since, such old and used second hand Digital Multifunction Print and Copying Machines would be classified as hazardous waste, as per Rule 3(1)(iii) of the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008. In terms of Rule 3(1) of the said rules `Hazardous Waste' means any waste which has the characteristics of causing danger to health or environment and it includes wastes specified in part A or part B of the schedule III, in respect of import or export of such wastes, in accordance with rules 12, 13 and 14 or the wastes other than those specified in part A or part B, if they possess any of the hazardous characteristics specified in part C of that schedule.
13. It had also been stated that hazardous waste can only be imported for recycling, recovery or re-use, in terms of Rule 13(2) of the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008, subject to the compliance of the conditions stipulated in Rule 14 of the said Rules. Electronic Assemblies meant for re-use, as provided under Basel No.B1110(3rd sub-entry) can only be imported with the permission of the Ministry of Environment and Forests. As per Rule 17(1)(i) of the said Rules the imports made without the permission of the Central Government shall be treated as illegal traffic, and the importer shall be directed to re-export the waste in question, at his cost, within a period of ninety days from the date of its arrival in India, as per sub-rule 2 of Rule 17 of the Rules.
14. It had also been stated that the imported goods, namely, used obsolete and discarded old and used second hand Digital Multifunction Print and Copying Machines are nothing but Electrical and Electronic Assemblies. They are imported for direct re-use and not for recycling or for final disposal. As such, the imported goods are hazardous waste and therefore, they would come under the category of `offending' and prohibited goods, in terms of Section 111(d) and (o) of the Customs Act, 1962. Accordingly, the request of the petitioners for their expeditious and provisional release cannot be entertained. Further, it is the duty of the petitioners to take necessary steps to place all the records before the authorities concerned, including the report of the chartered engineer, for the purpose of adjudication. Since, the petitioners had not taken sufficient steps to get their goods examined for the purpose of adjudication and for the levying of customs duties, and for their release, the respondents cannot be held responsible for the alleged loss said to have been caused to the petitioners, by way of detention and demurrage charges. As such, the writ petitions, filed by the petitioners, are devoid of merits and therefore, they are liable to be dismissed.
15. The learned counsels appearing on behalf of the petitioners had submitted that the goods imported by the petitioners, namely, old and used second hand Digital Multifunction Print and Copying Machines cannot be termed as `Waste' or as `Hazardous Waste', as alleged by the customs authorities concerned. They are second hand capital goods. From the Inspection Report submitted by the Inspectorate Griffith India Pvt. Ltd., it is clear that the goods imported by the petitioners cannot be classified as `Hazardous Waste', as they have been found to be functional for a period of nearly five years. Further, they cannot be classified as Electrical and Electronic Assemblies, coming under Basel No.B1110 of Part-B of Schedule III of the Hazardous Waste (Management Handling and Transboundary Rules), 2008, due to their residual life.
16. It has been further stated that the goods in question could be imported freely, without any restrictions, as they are not restricted or prohibited goods. It has also been stated that no licence is needed for the import of such goods and no prior permission is required for such imports from the Ministry of Environment and Forests, as stated by the respondents.
17. It had also been stated that, in the minutes of the twenty fourth meeting of the Technical Review Committee, of the Ministry of Environment and Forests, Government of India, held at New Delhi, on 16.11.2011, it had been noted that there was no specific mention about the multifunction devices in the EXIM Policy. The members of the Technical Review Committee had agreed that the Directorate General of Foreign Trade may be requested to include the multifunction devices under the restricted list. Thus, it is clear that second hand Digital Multifunction Print and Copying Machines, imported by the petitioners, are not under the restricted category, at present. While so, it would not be open to the respondents to claim that the petitioners ought to have obtained the necessary licence and the prior permission from the Ministry of Environment and Forests, for the importing of such goods, as though the goods in question are restricted items. Therefore, the claims made on behalf of the respondents that the goods imported by the petitioners could be classified as `Hazardous Waste' cannot be sustained. Accordingly, the respondents ought to examine and assess the goods imported by the petitioners, for the payment of customs duty and for the clearance of the goods, thereafter.
18. The learned counsel appearing on behalf of the respondent customs department had submitted that the writ petitions filed by the petitioners are premature in nature and therefore, they are liable to be dismissed, in limini. It has been further stated that it is the primary duty of the petitioners to get the goods examined, by an approved chartered engineer, in the presence of the customs officer concerned, by furnishing the relevant records. In spite of the orders having been passed in the month of June, 2011, the goods in question had not been examined, by a chartered engineer, as the petitioner had not taken sufficient steps to examine the goods and to submit the examination report, to the Assessing Officer, to enable him to proceed with the further processing of the matter.
19. It has been further stated that the approved chartered engineers, namely, M/s.S.G.S. India private limited, had been debarred by the Department, from examining the goods, on account of their misconduct, after a detailed enquiry had been conducted. The said information had been passed on to the traders, by way of a public notice No.59/2011, dated 29.7.2011. Even thereafter, after obtaining the approval from the Additional Commissioner of Customs, the petitioners had not chosen to take any steps to examine the goods in question.
20. It has been further stated that, on 4.7.2011, the Central Board of Excise and Customs had issued a circular, in Circular No.27/2011-Cus, making it mandatory to all the Commissionerates to examine the imported old and used Digital Multifunction Print and Copying Machines, in the light of the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008. Even assuming that no import licence is required for importing of such machines, at present, the petitioners should produce the necessary permission from the Ministry of Environment and Forests, for importing the machines, as they would fall under the category of `Hazardous Waste', as per Rule 3(1)(iii) of the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008, read with Basel No.B 1110 of part B of schedule III to the said Rules, 2008. It had also been submitted that the hazardous waste can only be imported for recycling, recovery or re-use, in terms of Rule 13(2) of the said Rules, subject to compliance of the conditions stipulated in Rule 14 of the Rules.
21. He had also submitted that the Electronic Assemblies, as provided under Basel No.B1110, (3rd sub-entry), can only be imported with the permission of the Ministry of Environment and Forests. In terms of Rule 17(1)(i) of the said Rules, the imports made without the permission of the Central Government shall be treated as illegal traffic. As per sub-rule 2 of Rule 17, the importer would be compelled to export the waste in question, at his cost, within a period of ninety days from the date of its arrival in India. As such, the imported goods are offending' and 'prohibited' goods, in terms of Section 111(d) and (o) of the Customs Act, 1962.
22. In such circumstances, the requests made by the petitioners, for the release of the goods in question, cannot be acceded to, by the respondents. As such, the issue relating to the granting of detention certificates, to cover the detention and demurrage charges, would not arise. As such, the writ petitions filed by the petitioners, are devoid of merits and therefore, they are liable to be dismissed.
23. In reply, the learned counsels appearing for the petitioners had submitted that the claims made on behalf of the respondents, that the goods imported by the petitioners are `Hazardous Waste', in the light of the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008, cannot be sustained. The goods imported by the petitioners are freely importable goods. Therefore, no licences or permissions are required for the importing of such goods, as alleged on behalf of the respondents. Further, the goods imported by the petitioners are second hand capital goods and they would not fall under the category of offending' and 'prohibited' goods, in terms of Section 111 of the Customs Act, 1962. Further, the goods in question cannot be termed as Electrical or Electronic Assemblies falling under Basel No.B110 part B of schedule 3 of the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008. In fact, the Electrical and Electronic Assemblies may form a part of certain machines, instruments or equipments. However, they cannot be equated with the Digital Multifunction Print and Copying Machines, which have been imported by the petitioners. Electrical and electronic parts cannot function by themselves, as a unit. They may only constitute a component or a part of full-fledged machines or equipments.
24. In view of the submissions made by the learned counsels appearing for the petitioners, as well as the respondents, and on a perusal of the records available, this Court is of the considered view that the used Digital Multifunction Print and Copying Machines, imported by the petitioners, cannot be said to fall under the category of `Hazardous Waste', as per Rule 3(1)(iii) of the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008, read with Basel No.B 1110 of part B of schedule III to the said Rules, 2008. The respondents have not been in a position to show, by sufficient evidence, that the goods imported by the petitioners are mere Electrical or Electronic Assemblies falling under Basel No.B1110 Part B of Schedule 3 of the said Rules.
25. It could be gathered, from the Minutes of the twenty fourth meeting of the Technical Review Committee, held at New Delhi, on 16.11.2011, that there is no specific mention about the multifunction devices in the EXIM and and therefore, the import of multifunction devices need to be placed in the same category, as photocoping machines. In fact, it had been decided, in the said meeting, to request the Directorate General of Foreign Trade to include multifunction devices in the restricted list, so that the Ministry of Environment and Forests could consider the applications for import of such devices, in the light of the conditions provided in the Basel Convention Technical Guidelines on 'Transboundary Movements of Electronic and Electrical Waste', after getting the necessary opinion from the Expert Committee. Thus, it is clear that the Digital Multifunction Print and Copying Machines are not in the restricted category, at present.
26. It is also noted that, in the reports of the chartered engineer, relating to the goods already inspected, the Digital Multifunction Print and Copying Machines, imported by the petitioners, have been found to have a residual life of a minimum of five years, provided proper attention is bestowed towards prompt and periodic maintenance and servicing of the machines.
27. Further, from the communication of the District Environmental Engineer, dated 11.11.2011, addressed to the Member Secretary, Tamil Nadu Pollution Control Board, Chennai, it cannot be concluded that the goods imported by the petitioners can be categorized as `Hazardous Waste', under the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008. No independent assessment has been made by the Tamil Nadu Pollution Control Board, based on which the used Digital Multi Function Print and Copying Machines could be classified as restricted goods'. As such, the contentions raised on behalf of the respondents cannot be countenanced.
28. In such view of the matter, this court finds it appropriate to direct the customs authorities concerned, who are the respondents in the above writ petitions, to release the goods in question, which had already been inspected by the authorised chartered engineers, on payment of the appropriate customs duty, subject to the adjudication process to be conducted, as per the relevant provisions of law.
29. In respect of cases relating to which the authorised chartered engineers had not inspected the goods in question, the customs authorities concerned shall direct the inspection of such goods before they are released. Such goods may be directed to be released, on payment of the appropriate customs duty and on the fulfillment of the conditions prescribed by law. It is made clear that it would be open to the petitioners to make the necessary requests, to the respondents, as per Regulation 6 of the Handling of Cargo in Customs Area Regulations, 2009, for the waiver of the detention and demurrage charges, if any. On completion of the inspection, the respondents shall release the goods, as expeditiously as possible, not later than ten days, thereafter.
The writ petitions are ordered accordingly. No costs. Consequently, connected miscellaneous petitions are closed.
csh To
1. The Commissioner of Customs, (Seaport-Imports), Customs House, No.60, Rajaji Salai, Chennai-600 001.
2. The Additional Commissioner of Customs (Gr.5A), Customs House, No.60, Rajaji Salai, Chennai-600 001.
3. The Assistant Commissioner of Customs (Gr.5A), Customs House, No.60, Rajaji Salai, Chennai 600 001