Custom, Excise & Service Tax Tribunal
M/S. Eastron Overseas Inc vs C.C New Delhi (Import & General) on 18 June, 2013
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, SINGLE MEMBER APPEAL BENCH,
NEW DELHI.
Date of Hearing:18.06.2013
Date of Pronouncement:
Appeal Nos. C/2695/2012-CU[SM]
M/s. Eastron Overseas Inc Appellants
Vs.
C.C New Delhi (Import & General) Respondent
(Arising out of the Order-in-appeal No.ICD/168/2012 Dated 12.06.2012 passed by the Commissioner of Custom (Appeal), New Delhi.
Honble Shri Rakesh Kumar, Member (Technical)
1. Whether Press Reporters may be allowed to see the :
Order for publication as per Rule 27 of the CESTAT (Procedure) Rule, 1982?
2. Whether it would be released under Rule 27 of :
the CESTAT (procedure) Rule, 1982 for publication in any authoritative report or not?
3. Whether their Lordships wish to see the fair :
Copy of the order?
4. Whether order is to be circulated to the Department :
Authorities?
Appearance Sh. Naveen Malhotra, Advocate - for the Appellant Ms. Shweta Bector, DR - for the Respondent Final Order No.56851/2013 Per Rakesh Kumar The facts leading to this appeal are, in brief, as under:-
1.1 The appellant imported a consignment declared to be of Datagraphic Display Tubes for clearance of which they file a bill of entry. After assessment of duty and payment of the duty assessed, the goods were examined and were ordered to be cleared out of customs charge. However, at this stage the consignment was stopped by the SIIB Officers who conducted 100% examination and on examination the goods appeared to be old and used.
1.2 The goods were shown to a Chartered Engineer Sh. R.K.Aggarwal, on 02.03.2012, who after examining the goods on test check basis, gave an opinion that the goods are old and used and in some cases reconditioned and that it is difficult to comment on the extent of usage. Based on this opinion of the Chartered Engineer and keeping in view the Boards Circular No.27/2011-Cus. dt. 04.07.2011, the Department was of the view that these goods are e-waste whose import is restricted under Import Export Policy 2009-14 read with Boards Circular No. 27/2011-Cus. dt. 07.04.2011 and since no permission of the Ministry of Environment and Forests (MOEF) had been obtained for import for the purpose of re-use, the same would be liable for confiscation.
1.3 Show Cause Notice dt. 12.03.2012 was issued to the appellant for confiscation of the goods imported under section 111(d) of Custom Act, 192 and also for imposition of penalty on the appellant.
1.4 The Show Cause Notice adjudicated by the Additional Commissioner vide order-in-appeal dt. 12.03.2012 by which the goods, in question, were confiscated with an option to be redeemed for re-export on payment of redemption fine of Rs. 3,00,000/-. Besides this penalty of Rs. 1.50 Lakh was also imposed on the appellant. The Additional Commissioner in this order held that the goods being old and used Datagraphic Display Tubes are Hazardous Waste or e-waste and therefore prohibited for import in terms of CBEC Circular No. 27/2011-Cus. dt. 04.07.2011 read with Hazardous Waste (Management, Handing and Transboundary Movement) Rules, 2008 and para 2.17 of the Foreign Trade Policy Volume-I. 1.5 The appellant filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) vide order-in-appeal dt. 11.06.2012 while upholding the confiscation, reduced the redemption fine to Rs.20,000/- and penalty to Rs. 30,000/-. Against this order of the Commissioner (Appeals), this appeal has been filed.
2. Heard both the sides.
3. Sh. Naveen Malhotra, Advocate, ld. Counsel for the appellant, pleaded that the entire case of the Department is based on Chartered Engineers report, that the Chartered Engineer while giving opinion that the goods are old and used has nowhere stated that goods are in the nature of e-waste or Hazardous Waste, that no opinion in this regard from the MOEF has been obtained, that in view of this, the findings of the lower authorities that the goods imported are Hazardous e-waste is without any basis that at the tune of import, there were no rules to determine as to what is e-waste and the e-waste (Management & Handling)Rules, into force w.e.f. 01.05.2012, that the goods imported are stock lot consignment and not consignment of used goods and hence the same are not restricted for import under the Exim Policy, that in any case, even if the goods are treated as second hand/ used, the same being capital goods and not being covered by Para 2.17 (1)(a) of the Import & Export Policy, would be freely importable and that in view of this, the impugned order is not correct.
4. Ms. Shweta Bector, ld. DR, defended the impugned order relying upon the Boards Circular No. 27/2011-Cus dt. 21.07.2011, according to which import of second hand computers would require the permission from MOEF. She relying upon this Circular pointed out to Rule 17(2) of Hazardous Waste (Management, Handing and Transboundary Movement) Rules, 2008 according to which the imports in contravention these rules are to be treated as illegal traffic requiring the importer to re-import waste at his own cost. She, therefore, pleaded that there is no infirmity in the impugned order.
5. I have considered the submissions from both the sides and perused the records. There is no dispute that the goods imported are Datagraphic Display Tubes which are used in computer monitors. The goods have been examined by a Chartered Engineer on sample basis who is in his detailed report has opined that looking to the condition of the goods, the same are old and used/reconditioned goods. In this regard the opinion of the Chartered Engineer is reproduced below:-
Observations:
1. I found carbon deposits on the inner side of deflection coils (of deflection yoke), which occurs due to prolonged usage of the CR tubes. I found electrical wires being cut from the small populated PCB mounted on the deflection yoke, which happens when the same is being dismounted from the original mountings.
2. The CRT are also found to be repainted at the back portion including where HV Anode Wire/Suction Cup is to be put so as to cover up scratches, which normally occurs at the time of dis-mountings of HV Anode Wire/Suction Cup and other parts like Deflection yoke etc.
3. In some pcs. The potion of mounting of deflection yoke is found to be changed, indicating that the deflection yoke is re-fixed on the same, which would not happen when the same is fixed originally.
4. I have found different types/designs of small populated PCBs mounted on the deflection yoke, which suggests that the same are not having uniformity in design and may have been sourced from different suppliers and after re-furnishings of the same, they are re-mounted on the tubes.
5. I have also notices some rust on the Mounting Frames in some of the pcs. (on the periphery of the CR tubes), which meant for mounting the tubes in cabinets), suggesting that these belongs to a long period of time.
6. About the CRT, the same appears not being re-vacuumed, as no scar marks were found (after removing the deflection yoke) from its position on some pcs., which may indicate that the glass shell of the CRT are kept intact and other item(s) i.e. reconditioned yoke parts are being fitted on the tubes.
7. Although no live testing is being make, but it appears that these tubes may be in working condition, when put to use. So my conclusion is that although it is very difficult to comment on the quantum of the usage of the Datagraphic tubes, yet by looking at the carbon deposits on the deflection coils mainly on inner side on physical examination besides various other observations as explained above, the same are found to be old and used with reconditioning/changing of some parts (if viewed as single assembled pc. as a whole). The certificate is issued after physical inspection of approx. 10% of the total items (by taking the same outside the container) and the same is issued without any prejudice and is correct to the best of my knowledge and judgment. (RUD-3).
6. Though the appellant claim that goods are stock lot, they have not seriously disputed the above opinion of the Chartered Engineer and their plea is that the goods are not e-waste or Hazardous Waste as there is no such remark in the Chartered Engineers report. On going through this report I am of the view that the goods have to be treated as old and used/reconditioned Datagraphic Display Tubes. The point of dispute which now remains to be decided is as to whether at the time of import i.e. Dec.2011, the import of these goods was restricted. In this regard the ld. Departmental Representative relies upon the Boards Circular No. 27/2011 Cus. dt.04.07.2011 which in turn refers to the Hazardous Waste (Management, Handing and Tranboundary Movement) Rules, 2008 and in particular to Rule 17 of the said Rules read with Entry No. B 1110 of part B of Schedule-III of the said rules. The ld. counsel for the appellant on the other hand pleads that the goods should be treated as un-restricted old and used capital goods whose import is permissible in terms of para 2.17 of the Foreign Trade Policy.
7. Hazardous Waste as defined in Rule 3(l) of Hazardous Waste (Management, Handing and Transboundary Movement) Rules, 2008 made by the Central Government under section 6, 8 & 25 of the Environment Protection Act, 1986, means any waste which by reason of its physical, chemical, reactive, toxic, flammable, corrosive or explosive characteristics causes or is likely to cause, danger to health or environment, whether alone or in contact with other wastes or substances and shall include, among others, the wastes specified in Part A or part B of Schedule-III to these Rules in respect of import or export of such wastes in accordance with Rules 12 & 13 and 14. Under Rule 12, MOEF shall be the nodal Ministry to deal with the transboundry movement of the Hazardous Wastes and to grant permission for transit of the Hazardous Wastes through any part of India. Under Rule 13, no import of the Hazardous Wastes from any country to India for disposal shall be permitted, the import of Hazardous Waste from any country shall be permitted only for recycling or recovery or re-use. Rule 14 mentions the conditions for import or export of certain categories of Hazardous Waste for recycling or re-use. Under Rule 14(1), import or export of Hazardous Wastes specified in Schedule-III shall be regulated in accordance with the conditions laid down in the said schedule and as per Rule 14(2), import of Hazardous Waste specified in part B of Schedule-III does not require prior informed consent of the country from which the waste has been imported. As per Schedule-III, Part B, the wastes listed therein having no star (*) can be imported into the country only with the permission of the MOEF. Rule 16 prescribes the procedure for obtaining permission from MOEF for import of wastes covered under Schedule-III. Rule 17(1) of these Rules states that export and import of Hazardous Waste from or into India shall be deemed illegal if it is without permission of Central Govt. in accordance with these Rules. Sub-Rule (2) of Rule 17 states that in case of illegal import of Hazardous Waste, the importer shall re-export the waste, in question, at his cost within a period of 90 days from the date of import and its implementation will be ensured by the concerned State Pollution Control Board.
8. Serial No. B1110 of part B of Schedule-III covers among other items electrical & electronic assemblies (including printed Circular Board, electronic components & wires) destined for direct use and not for recycling or final disposal. This entry is without any star(*) and, therefore, these items would require permission of MOEF for import.
9. The goods imported are electronic assemblies for direct re-use and, therefore, in my view the same would be covered by Serial No. 1110 of Part B of the Schedule-III to the Hazardous Waste Rules, 2008, which as discussed above, would require prior permissible from Ministry of Environment of Forests and since these goods have been imported without permission from the Ministry of Environment of Forests, this import would have to be treated contrary to the restrictions imposed under Hazardous Waste Rules, 2008 and accordingly the same would be liable for confiscation under Section 111(d) of the Customs Act, 1962. And the same, in accordance with Rule 17(2) of the Hazardous Wastes Rules, 2008 have to be re-exported by the Importer at his cost. The e-waste (Management & Handling) Rules 2011 mentioned by the learned counsel for Appellant, as mentioned in Rule 2 of their Rules, apply to produces, consumers or bulk consumers involved in manufacture, sale purchase and processing of electrical and electronic processing of electrical equipment or components specified in their rules and as such, there rules do not apply to import of Hazardous Waste or e-waste, which is governed by Hazardous Waste Rules, 2008 only. Therefore I do not find any infirmity in the impugned order. The appeal is dismissed.
(Rakesh Kumar) Member(Technical) S.Kaur 1