Ayyan Energy Resources (P) Ltd Vs Commissioner Customs (CESTAT Delhi)
Revenue Department has discretion to allow/disallow redemption of prohibited hazardous waste – CESTAT confirms Confiscation of Low Sulphur Waxy Residue being Hazardous Waste
The CESTAT, New Delhi in M/s Ayyan Energy Resources (P) Ltd. v. Commissioner [Customs Appeal No. 567 of 2011 dated December 6, 2022] upheld the order passed by the Revenue Department confiscating the waste oil and imposing the penalty on import of the same. Held that, the re-export of imported waste oil is not allowable as it is prohibited under the Hazardous Waste (Management, Handling and Trans-boundary Movement) Rules, 2008 (“HWR”).
Facts:
M/s Ayyan Energy Resources (P) Ltd. (“the Appellant”) imported good described as “Low Sulphur Waxy Residue (fuel oil)” from Bahrain which on examination and testing was found to be “waste oil” which was included at S. No. 29 of Schedule VI of the HWR. Whereas, import of waste oil is prohibited under Rule 13(4) of HWR. Accordingly, a Show Cause Notice (“SCN”) was issued alleging that the Appellant had willfully mis-declared the imported goods and also imported it in violation of paragraph 2.7 of Foreign Trade Policy 2009-2014 read with Rule 13(4) of the HWR. The Appellant was called upon to explain why the imported goods should not be confiscated and why a penalty should not be imposed under Section 112(a) of the Customs Act, 1962 (“the Customs Act”).
Thereafter, not satisfied by the Appellant’s reply, the Additional Commissioner passed an order against the Appellant wherein, the imported goods i.e. the waste oil, were confiscated, penalty of INR 1,00,000 was imposed on the Appellant and the Appellant’s director each. This order was then challenged by the Appellant before the Commissioner (Appeals) (“the Respondent”) wherein the penalty on director was set aside and the remaining order was upheld.
Hence, this appeal has been filed.
The Appellant prayed that the goods be released and contended that, as per Section 125 of the Customs Act, it is mandatory for the authority to give an option to redeem the goods which was not given to the Appellant. Also, the Appellant submitted that it was not ready to redeem the goods on redemption fine but was willing to re-export the ‘waste oil’ only if it was released to it without any redemption fine.
The Respondent submitted that release or re-exporting of the goods would not be possible as the goods are already being confiscated and thus were then the property of Central Government as per Section 126 of the Customs Act.
Issue:
Whether the imported goods which were prohibited and thus confiscated are liable to be released or re-exported?
Held:
The CESTAT, New Delhi in Customs Appeal No. 567 of 2011 held as under:
