Case Note & Summary
The appellant, Principal Commissioner of Customs, filed a Tax Appeal under Section 130 of the Customs Act, 1962 against the judgment and order dated 08.10.2018 passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), West Zonal Bench, Ahmedabad. The Tribunal had allowed the appeals filed by the respondent, M/s R M Dhariwal (HUF), and set aside the confiscation of goods and imposition of penalty and fine. The respondent had exported gutkha using plastic packing material, which the Customs alleged was prohibited under Rule 5(d) and 5(g) of the Plastic Waste (Management and Handling) Rules, 2011. The Customs contended that the Tribunal erred in interpreting the Rules and in relying on Supreme Court judgments that exempted such exports. The respondent argued that the case was covered by Supreme Court orders in M/s Harsh International & Anr v. Union of India & Ors, M/s R.M. Dhariwal 100% EOU v. Union of India & Ors, and Baba Global Ltd & Anr v. Union of India & Anr, which held that the Rules did not apply to exports of gutkha. The High Court noted that the substantial question of law was squarely covered by the Supreme Court's binding precedent. The Court observed that the Tribunal had correctly applied the Supreme Court's orders and that the Customs' appeal lacked merit. Consequently, the High Court dismissed the appeal, upholding the Tribunal's decision.
Headnote
A) Customs Law - Export of Prohibited Goods - Plastic Waste Rules - The issue was whether the Plastic Waste (Management and Handling) Rules, 2011 apply to exports of gutkha using plastic packing material - The High Court held that the Tribunal correctly relied on Supreme Court judgments which exempted such exports from the Rules - The appeal was dismissed as the substantial question of law was covered by binding precedent (Paras 3-8).
Issue of Consideration
Whether the Tribunal erred in interpreting Rule 5(d) and 5(g) of the Plastic Waste (Management and Handling) Rules, 2011 to be read along with Section 113(d) and 118 of the Customs Act, 1962, and whether the Rules apply to exports of gutkha using plastic packing material.
Final Decision
The High Court dismissed the Tax Appeal, holding that the substantial question of law is covered by the binding precedent of the Supreme Court. The Tribunal's order was upheld.
Law Points
- Interpretation of Rule 5(d) and 5(g) of Plastic Waste (Management and Handling) Rules
- 2011
- Section 113(d) and 118 of Customs Act
- 1962
- Binding precedent of Supreme Court
- Applicability of Rules to exports
Case Details
R/TAX APPEAL NO. 22 of 2020
A.S. Supehia, Pranav Trivedi
Ms. Hardika Vyas for Appellant, Mr. Mihir Joshi (Senior Advocate) with Mr. Premal R Joshi and Mr. Hardik Modh for Respondent
The Principal Commissioner of Customs
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Nature of Litigation
Tax Appeal under Section 130 of the Customs Act, 1962 against the order of CESTAT allowing the respondent's appeal and setting aside confiscation of goods and imposition of penalty.
Remedy Sought
The appellant (Customs) sought to quash and set aside the Tribunal's judgment and order dated 08.10.2018.
Filing Reason
The appellant contended that the Tribunal erred in interpreting Rule 5(d) and 5(g) of the Plastic Waste (Management and Handling) Rules, 2011 and in relying on Supreme Court judgments to hold that the Rules do not apply to the respondent's export of gutkha using plastic packing material.
Previous Decisions
The Tribunal (CESTAT) allowed the respondent's appeals and set aside the confiscation and penalty. The High Court is now hearing the appeal against that order.
Issues
Whether the Tribunal erred in interpreting Rule 5(d) and 5(g) of the Plastic Waste (Management and Handling) Rules, 2011 to be read along with Section 113(d) and 118 of the Customs Act, 1962.
Submissions/Arguments
Appellant (Customs): The respondent exported gutkha using plastic packing material prohibited under Rules 5(d) and (g) of the Plastic Waste Rules, 2011. The Tribunal erred in setting aside confiscation on the ground that the plastic was biodegradable, as Rule 5(g) does not exempt biodegradable plastics. The Supreme Court orders relied upon by the Tribunal were subsequent to the exports and not applicable.
Respondent: The case is covered by Supreme Court judgments in M/s Harsh International, M/s R.M. Dhariwal, and Baba Global Ltd, which held that the Plastic Waste Rules do not apply to exports of gutkha. The substantial question of law is already answered by binding precedent.
Ratio Decidendi
The Plastic Waste (Management and Handling) Rules, 2011 do not apply to exports of gutkha using plastic packing material, as per the Supreme Court's binding orders. The Tribunal correctly relied on those orders, and the Customs appeal lacks merit.
Judgment Excerpts
The answer to the said substantial question of law which has been pressed hinges upon the order passed by the Supreme Court...
It is the case of the appellant – Customs that the Tribunal has fell in error in passing the impugned judgment and order...
In response to the aforesaid submissions, learned Senior Advocate Mr. Mihir Joshi appearing for the respondent at the outset has submitted that the substantial question of law in the present case is neither required to be framed nor required to be answered, in view of litigation which travelled to the appellate authority and was remanded.
It is submitted that in fact the case of the respondent is squarely covered by the Judgments and Orders passed by the Supreme Court...
Procedural History
The respondent exported goods on 01.12.2011. Customs confiscated the goods and imposed penalty and fine. The respondent appealed to the Commissioner (Appeals) which remanded the matter. Thereafter, the matter reached CESTAT, which allowed the respondent's appeals on 08.10.2018. The Customs then filed the present Tax Appeal before the High Court.
Acts & Sections
- Customs Act, 1962: 113(d), 118
- Plastic Waste (Management and Handling) Rules, 2011: 5(d), 5(g)
