By TIOL News Service

MUMBAI, JULY 05, 2016 : THE vessel Al Kabeer arrived in January 2013 and discharged its cargo into bonded tanks for warehousing. The goods were classified under 27101960 as 'base oil' and samples drawn were sent to CRCL Delhi for testing. The test results were found to be non-compliant with IS: 15078:2001 applicable to rubber processing oil. As the aromatic content was 78.5%, it did not appear to be eligible for classification under the declared entry but under 27079900 leviable to duty at 10%. The test report also indicated that that it is a waste product listed in Schedule III Part A of Hazardous Waste (Management, Handling and Trans-boundary Movement) Rules, 2008. Further, owing to 'polycyclic aromatic hydrocarbon' being more than 50mg/kg in the samples, the goods were opined by the CRCL to be hazardous waste. The goods were seized.

The Commissioner of Customs (Import), Mumbai, held that the imported goods, both present and past, are liable for confiscation and with, except in relation to those that had been cleared on earlier occasions, the option to redeem on payment of fine only for re-export within 90 days of the order. In addition, penalties were also imposed. Duty liability on past imports was also enhanced.

The appellants are before the CESTAT.

The Bench after considering the rival submissions observed –

++ as per note 2 of Chapter 27 of first schedule of CTA, 1975 heading of "petroleum oils and oils obtained from bituminous minerals" include not only petroleum oils and oil obtained from bituminous obtained by any process but also similar oils as well as those consisting mainly of mixed unsaturated hydrocarbon obtained by any process, provided that the weight of the non-aromatic constituents exceeds that of aromatic constituents.

++ on a careful examination of facts and circumstances, it would appear that the imports of the appellants do contain a higher percentage of aromatic constituent than prescribed for classification under 2710. The alternate heading which describe the imported goods to be waste brings it under the ambit of Hazardous Waste (Management Handling & Trans Boundary Movement) Rules, 2008 Rules and, therefore, liable for action under section 111 and section 112 of Customs Act, 1962.

++ it is noted that the adjudicating authority has placed reliance on certain test samples relating to earlier imports. In the absence of any evidence that the samples have not been drawn, we are unable to appreciate the argument advanced by appellants that these test result are not reliable.

++ though the nodal ministry for Hazardous Waste (Management Handling & Trans Boundary Movement) Rules, 2008 is the Ministry of Environment and Forest and the appellants contend that reliance on tests carried out by laboratories, that are not approved by that Ministry, is inappropriate, we find that testing is for coverage under note 2 of Chapter 27 of First Schedule of Customs Tariff Act, 1975. It is following a re-classification on account of non-fitment with that note that the goods become subject to Rules governing handling of hazardous waste.

++ the origin of confiscation resides in the domain of Customs procedures and hence reliance on testing by CRCL is not questionable. Accordingly, we are not convinced that the samples have not been subjected to a valid test.

++ we are also not convinced that testing procedure should be subject to cross-examination by the appellant as the credibility of the test is not in question and a non-expert may not be in a position to query an expert on technicalities. It was open to the appellants to produce expert witnesses on their side during the adjudication proceedings. No such request was canvassed on behalf of appellants.

Holding that the adjudicating authority had correctly held the imported product to be subject to the provision of Hazardous Waste (Management Handling & Trans Boundary Movement) Rules, 2008 and, therefore, there is no reason to interfere with the impugned order, the appeals were rejected.

(See 2016-TIOL-1624-CESTAT-MUM)