Legal principle

Control of customs areas under HCCAR-2009 confers no authority on customs officers to enforce the Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989, a public notice has no legal standing under the Customs Act, 1962, and section 151A instructions cannot extend to regulation of storage services.

Court decision

The Tribunal allowed both appeals and set aside the impugned order, holding that the Commissioner of Customs had no instrument of empowerment to sustain the proceedings: neither the impugned circular nor the public notice could be read into HCCAR-2009, section 151A could not stretch to cover them, and the tax administration lacked jurisdiction and domain competence to oversee compliance with the MSIHCR-1989.

Facts

M/s APM Terminals India Pvt Ltd operates two container freight stations ('Annexe' and 'Main') at Dronagiri, Navi Mumbai, as a grandfathered 'custodian' under section 45(1) of the Customs Act, 1962 and as an approved 'customs cargo service provider' (CCSP) under the Handling of Cargo in Customs Areas Regulations, 2009 (HCCAR-2009), renewed every five years with the latest approval effective 15th March 2020. The Commissioner of Customs (General), JNCH, by two Orders-in-Original dated 10th August 2023, imposed identical penalties of ₹50,000 and ₹4,00,000 under regulation 12(8) of HCCAR-2009 and section 117 of the Customs Act, 1962, and suspended the CCSP permissions under Public Notices 102/2020 and 110/2020 until regularization of permission for handling and storage of hazardous cargo. The allegation was that the appellants handled quantities of hazardous chemicals (ammonia, bromine, propylene oxide, diphenyl methane di-isocyanate and toluene di-isocyanate) exceeding 'thresholds' prescribed under the Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989 (MSIHCR-1989) during 2021, without getting the transactions 'regularized', thereby breaching clauses (i) and (q) of regulation 6(1) of HCCAR-2009.

Key provisions

• Section 141, Customs Act, 1962 — Conveyances and goods in a customs area subject to control of officers of customs
• Regulation 6(1)(i), Handling of Cargo in Customs Areas Regulations, 2009 — Responsibilities of Customs Cargo Service provider
• Section 151A, Customs Act, 1962 — Instructions to officers of customs
• Section 45, Customs Act, 1962 — Restrictions on custody and removal of imported goods
• Section 3, Customs Act, 1962 — Classes of officers of customs
• Section 157, Customs Act, 1962 — General power to make regulations
• Regulation 12(8), Handling of Cargo in Customs Areas Regulations, 2009 — Procedure for suspension or revocation of approval and imposition of penalty
• Regulation 5, Handling of Cargo in Customs Areas Regulations, 2009 — Conditions to be fulfilled by Customs Cargo Service provider
• Section 117, Customs Act, 1962 — Penalties for contravention etc not expressly mentioned
• Section 47, Customs Act, 1962 — Clearance of goods for home consumption
• Regulation 7, Handling of Cargo in Customs Areas Regulations, 2009 — Power to relax and regulate
• Regulation 10, Handling of Cargo in Customs Areas Regulations, 2009 — Approval of appointment of a Customs Cargo Service provider and review thereof