Case Note & Summary
The petitioner, Hemant Surgical Industries Limited, is engaged in importing, manufacturing, and supplying medical equipment. Since 2008, it has imported used haemodialysis machines into India. On 28th January 2021, the petitioner imported a consignment of used haemodialysis machines under Bill of Entry No.2537281 for supply to a hospital run by the Delhi Sikh Gurudwara Management Committee. The Bill of Entry contained an examination order requiring certification by a Chartered Engineer that the goods were not hazardous waste or e-waste. The petitioner had previously imported an identical consignment under Bill of Entry No.2536133, which was cleared by customs and installed. Both consignments were examined by empanelled Chartered Engineers who certified that the used haemodialysis machines were not hazardous waste or e-waste. The petitioner paid duty of Rs.6,03,736/- on 10th February 2021. However, on 15th February 2021, respondent no.3 (Deputy Commissioner of Customs) raised an objection disallowing clearance, alleging violation of the Hazardous and Other Wastes (Management, Handling and Trans-Boundary Movement) Rules, 2016. The petitioner replied on 22nd February 2021, explaining that the Rules did not prohibit clearance. After a virtual hearing on 5th March 2021, the petitioner submitted a detailed representation on 8th March 2021, reiterating that the machines were not hazardous waste. Despite this, respondent no.3 issued a show cause notice on 19th March 2021 under Section 124 of the Customs Act, 1962, proposing confiscation under Section 111(d) and penalty under Section 112(a)(i). The show cause notice claimed that the import of 'Used Critical Care Medical Equipment' was prohibited under Rule 12(6) and Basel No. B-1110 of Schedule VI of the Rules. The petitioner replied on 12th and 15th April 2021, but respondent no.3 passed the impugned order on 21st April 2021, confirming the confiscation and penalty. The petitioner challenged this order before the Bombay High Court. The court noted that the show cause notice and impugned order proceeded on the basis that the goods were prohibited as 'used critical care medical equipment' under the Rules. However, the court observed that the impugned order recorded the petitioner's submissions extensively but failed to provide any finding that the goods were 'hazardous waste' or 'waste' as defined under the Rules. The court held that the definitions of 'hazardous waste' (Rule 3(17)) and 'waste' (Rule 3(38)) clearly indicate that the goods must be waste, not finished products. Since the imported used haemodialysis machines were finished products suitable for reuse, they could not be classified as hazardous waste or waste. The court also noted that the respondent did not dispute that the goods were not hazardous waste. Consequently, the court quashed the impugned order and directed the respondents to refund the redemption fine and other amounts paid by the petitioner under the interim order, with interest at 6% per annum from the date of payment until refund.
Headnote
A) Customs Law - Import of Used Medical Equipment - Classification as Hazardous Waste - Hazardous and Other Wastes (Management, Handling and Trans-Boundary Movement) Rules, 2016, Rule 3(17), Rule 3(38), Rule 12(6), Schedule VI - The court considered whether used haemodialysis machines imported for reuse fall within the definition of 'hazardous waste' or 'waste' under the Rules. Held that the imported goods are finished products, not waste, and therefore not prohibited. The show cause notice and impugned order failed to establish that the goods were hazardous waste or waste. (Paras 8-11) B) Customs Law - Alternative Remedy - Section 128 of Customs Act, 1962 - The respondent argued that the petitioner should exhaust the alternative remedy of appeal. The court, however, proceeded to decide the matter on merits as the impugned order was found to be without jurisdiction and based on erroneous interpretation. (Para 9) C) Customs Law - Confiscation and Penalty - Sections 111(d) and 112(a)(i) of Customs Act, 1962 - The court held that since the import was not prohibited, the goods could not be confiscated and no penalty could be imposed. The impugned order was quashed. (Paras 11-12)
Issue of Consideration
Whether used haemodialysis machines imported by the petitioner can be classified as 'hazardous waste' or 'waste' under the Hazardous and Other Wastes (Management, Handling and Trans-Boundary Movement) Rules, 2016, thereby making their import prohibited.
Final Decision
The court quashed the impugned order dated 21st April 2021 passed by respondent no.3. The respondents were directed to refund the redemption fine of Rs.5,00,000/- and any other amounts paid by the petitioner pursuant to the interim order dated 18th November 2022, with interest at 6% per annum from the date of payment until the date of refund.
Law Points
- Interpretation of 'hazardous waste' and 'waste' under Hazardous and Other Wastes Rules
- 2016
- Import of used medical equipment not prohibited
- Rule 12(6) and Schedule VI not applicable to non-waste items
- Customs Act Sections 111(d) and 112(a)(i) not attracted
