Import of products containing HCFC-22 – yet another clarification

By Vijay Kumar

DGFT had issued a circular No. 26 on 13th Sept. 2005 clarifying that Air conditioners filled with HCFC-22 gas which had already been imported will be treated as free imports and allowed clearance by Customs. We had carried an article on the issue Air Conditioners filled with HCFC-22 : Interesting but confusing. The article questioned,

So what does the DGFT Circular do?

The said Circular interalia clarifies that Air Conditioners filled with HCFC-22 ( R-22 ) gas, which have already landed and arrived but not cleared for home consumption will be treated as free and clearances will accordingly be allowed by Customs. Does this leave scope for interpretation? What about the Air Conditioners en route to India but not landed? What about further such consignments which will be imported? Is the Circular amply clarifying the status on the subject issue? Or is it just a ‘frivolous’ query?

Now the DGFT has clarified,

The import of products containing HCFC – 22 (R-22) gas is free under the ITC (HS) Classification of Export and Import Items. However, the ODS Rules, 2000 stipulate that a license is required for such imports.

It has been decided that until such time this anomaly is sorted out, licenses for import of products containing HCFC – 22 gas will be issued by the Directorate General of Foreign Trade in cases where clearances have been given by the Ministry of Environment and Forest.

But the Circular however still remains shy from clarifying whether Schedule I of the ODS restricts HCFC-22/R-22? – Does ODS restrict import of Monocholorodifluoromethane?

Since DGFT was not issuing licence for import of Air Conditioners with HCFC-22, Customs Department in Mumbai and elsewhere in India had come with the ingenious way out of obtaining Bond and Bank Guarantee for clearing the air conditioners filled with Freon Gas – Ever heard of allowing import of prohibited / restricted items by taking Bond/ Bank Guarantee ?? Seriously, the Complement Cascading effect of this Circular will continue and hopefully another Circular will be in the offing.

By the way, why increase paper work by having licence for import of Air conditioners filled with HCFC –22? What purpose will possibly be served by this? Does this help the cause of environment? What check will one have on local manufacturers of the said product? Why increase paper work and accordingly scope for harassment?

DGFT CIRCULAR NO . 47 (RE-2005)/2004-09, Dated: February 8, 2006