Black Gold Technologies Vs Union of India (Madras High Court)
In the Instant case, the petitioner is seeking provisional released for the goods seized by the customs officer due to mis-declaration of the cargo in order to circumvent the import restriction imposed by the extant Foreign Trade Policy.
High Court states that, as per Schedule 3 there are two parts. Part A contains a list of hazardous wastes applicable for import and export with prior informed consent. Part B contains the list of other wastes applicable for import and export and not requiring prior informed consent. Schedule VI sets out hazardous and other wastes prohibited for import. It is not the case of the respondents that the imported goods in the case on hand fall under Schedule VI. Once the application of the Schedule VI of the 2016 Rules is ruled out, the only question is whether the import of the goods is free or restricted. Under either case, in view of the decision of the Hon’ble Supreme Court in Atul Automations, provisional release is very much permissible. The respondents have seized the goods under Section 110 of the Customs Act, 1962. Therefore, Section 110A of the Customs Act, 1962 will automatically kick in. As per Section 110A, “Any goods, documents or things seized under Section 110, may, pending the order of the adjudicating authority be released to the owner on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require.” Further, the statutory scheme obtaining in the Customs Act, 1962, the Foreign Trade Development and Regulation Act, 1992, Foreign Trade (Regulation) Rules, 1993 and the earlier Hazardous Wastes Rules concluded that despite the fact that the goods, whose import is restricted in terms of the Foreign Trade Policy, should be construed to be prohibited goods, there is no bar for the release of the goods. The learned Judge also noted that it is not open to the customs authorities to insist on re-export. This was to be done only by the authorities specified in Schedule VII of the Hazardous and Other Wastes Rules, 2016. As in that case, in the present case also, no proceedings have been initiated by the authorities in terms of the Hazardous Wastes Rules for directing the petitioners to re-export the goods. High Court therefore of the view that the petitioners are entitled to provisional release of the goods under Section 110A of the Customs Act, 1962. Therefore, the respondents are directed to assess and permit the provisional release of the goods in question upon payment of applicable duties of customs subject however to the eventual adjudication. The respondents shall release the goods after assessing and collecting the customs duty and other charges provisionally within a period of three weeks from the date of receipt of a copy of this order.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
The petitioners had imported consignments of “Used Rubber Tyre Cut in Two Pieces”. According to the petitioners, the said goods are freely importable and they are meant for manufacturing “rubber crumbs” to be eventually used for road laying.
2. The customs authorities were called upon to clear the goods in question on the ground that they have been classified under CTH 40040000. The respondents after examination came to the conclusion that the goods have been misdeclared. Though they had been declared as used tyre with one cut in bead wire, a random examination of the goods revealed that there was no cut in the bead wires. Therefore, it was referred to SIIB for detailed examination for import assessment. As per the examination report of the said officers, the cargo was found to be used rubber tyres in pressed bales. But there was no cut in the bead wires. Though import of used tyres with one cut in the bead wire is free, import of used rubber tyres is restricted. Hence, on the reasonable belief that the importer has mis-declared the cargo in order to circumvent the import restriction imposed by the extant Foreign Trade Policy, the entire cargo was seized for further investigation under the Customs Act, 1962. Following such seizure, the petitioners made a request for provisional release in terms of Section 110A of the Customs Act, 1962. Since the request was not complied with, these writ petitions came to be filed.
3. The petitioners’ request is opposed by the respondents. The respondents challenge the claim of Black Gold Technologies, that the imported goods were meant for manufacturing rubber crumbs at their unit said to be located in Alwar, Rajasthan. In Paragraph Nos.7 and 8 of the counter affidavits, the respondents have taken a stand that the seized goods have been restricted for import as per the Foreign Trade Policy and that they could have been imported only under due authorisation. Since the importer did not obtain valid licenses from DGFT, the goods were rightly seized. It is further contended that since the goods also constitute a hazardous waste, prayer for provisional release is also not maintainable. It is finally contended that the writ petitions have to be dismissed for non exhaustion of the alternative remedy available under the statute.
4. The counsel on either side filed their written arguments and reiterated the contentions set out therein. They also relied on a host of case laws. The learned standing counsel placed heavy reliance on the provisions of the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016. Some of the provisions relied on by the learned standing counsel are as under :
“3.(17).-“hazardous waste” means any waste which by reason of characteristics such as physical, chemical, biological, reactive, toxic, flammable, explosive or corrosive, causes danger or is likely to cause danger to health or environment, whether alone or in contact with other wastes or substances, and shall include –
(i) waste specified under column (3) of Schedule I;
(ii) waste having equal to or more than the concentration limits specified for the constituents in class A and class B of Schedule II or any of the characteristics as specified in class C of Schedule II; and
(iii) wastes specified in Part A of Schedule III in respect of import or export of such wastes or the wastes not specified in Part A but exhibit hazardous characteristics specified in Part C of Schedule III;”
“3.(23).-“other wastes” means wastes specified in Part B and Part D of Schedule III for import or export and includes all such waste generated indigenously within the country;”
“13.Procedure for import of hazardous and other wastes.- (1) Actual users intending to import or transit for transboundary movement of hazardous and other wastes specified in Part A and Part B of Schedule III shall apply in Form 5 along with the documents listed therein, to the Ministry of Environment, Forest and Climate Change for the proposed import together with the prior informed consent of the exporting country in respect of Part A of Schedule III waste, and shall send a copy of the application, simultaneously, to the concerned State Pollution Control Board for information and the acknowledgement in this respect from the concerned State Pollution Control Board shall be submitted to the Ministry of Environment, Forest and Climate Change along with the application.
(2) For the import of other wastes listed in Part D of Schedule III, the importer shall not require the permission of the Ministry of Environment, Forest and Climate Change. However, the importer shall furnish the required information as per Form 6 to the Customs authorities, accompanied with the following documents in addition to those listed in Schedule VIII, wherever applicable. For used electrical and electronic assemblies listed at serial numbers 4 (e) to 4(i) of Schedule VIII (Basel No. B1110), there is no specific requirement of documentation under these rules:
(a) the import license from Directorate General of Foreign Trade, if applicable;
(b) the valid consents under the Water (Prevention and Control of Pollution) Act, 1974 (25 of 1974) and the Air (Prevention and Control of Pollution) Act, 1981 (21 of 1981) and the authorisation under these rules as well as the authorisation under the E-Waste (Management and Handling) Rules, 2011, as amended from time to time, whichever applicable;
(c) importer who is a trader, importing waste on behalf of actual users, shall obtain one time authorisation in Form 7 and copy of this authorisation shall be appended to Form 6.
(3) For Part B of Schedule III, in case of import of any used electrical and electronic assemblies or spares or part or component or consumables as listed under Schedule I of the E Waste (Management and Handling) Rules, 2011, as amended from time to time, the importer need to obtain extended producer responsibility authorisation as producer under the said E-Waste (Management and Handling) Rules, 2011. (4)Prior to clearing of consignment of wastes listed in Part D of Schedule III, the Custom authorities shall verify the documents as given in column (3) of Schedule VIII.
(5) On receipt of the complete application with respect to Part A and Part B of Schedule III, the Ministry of Environment, Forest and Climate Change shall examine the application considering the comments and observations, if any, received from the State Pollution Control Boards, and may grant the permission for import within a period of sixty days subject to the condition that the importer has –
(i) the environmentally sound facilities;
(ii) adequate arrangements for treatment and disposal of wastes generated;
(iii) a valid authorisation and consents from the State Pollution Control Board;
(iv) prior informed consent from the exporting country in case of Part A of Schedule III wastes.
(6) The Ministry of Environment, Forest and Climate Change shall forward a copy of the permission to the concerned Port and Customs authorities, Central Pollution Control Board and the concerned State Pollution Control Board for ensuring compliance with respect to their respective functions given in Schedule VII.
(7) The importer of the hazardous and other wastes shall maintain records of the hazardous and other waste imported by him in Form 3 and the record so maintained shall be made available for inspection.
(8) The importer of the hazardous and other wastes shall file an annual return in Form 4 to the State Pollution Control Board on or before the 30th day of June following the financial year to which that return relates.
(9) Samples of hazardous and other wastes being imported for testing or research and development purposes up to 1000 gm or 1000 ml shall be exempted from need of taking permission for import under these rules.
(10) The Port and Customs authorities shall ensure that shipment is accompanied with the movement document as given in Form 6 and the test report of analysis of the waste, consignment, wherever applicable, from a laboratory accredited or recognised by the exporting country. In case of any doubt, the customs may verify the analysis.”
“15.Illegal traffic.- (1)The export and import of hazardous or other wastes from and into India, respectively shall be deemed illegal, if,-
(i) it is without permission of the Central Government in accordance with these rules; or
(ii) the permission has been obtained through falsification, mis-representation or fraud;
or
(iii) it does not conform to the shipping details provided in the movement documents; or
(iv) it results in deliberate disposal (i.e., dumping) of hazardous or other waste in contravention of the Basel Convention and of general principles of international or domestic law.
(2) In case of illegal import of the hazardous or other waste, the importer shall re-export the waste in question at his cost within a period of ninety days from the date of its arrival into India and its implementation will be ensured by the concerned Port and the Custom authority. In case of disposal of such waste by the Port and Custom authorities, they shall do so in accordance with these rules with the permission of the Pollution Control Board of the State where the Port exists.
(3) In case of illegal import of hazardous or other waste, where the importer is not traceable then the waste either can be sold by the Customs authority to any user having authorisation under these rules from the concerned State Pollution Control Board or can be sent to authorised treatment, storage and disposal facility.”
5. The learned standing counsel would point out that even according to the petitioners, the imported goods would fall under the category B3140 which falls under Part B of Schedule 3 of the aforesaid rules. If that be so, the petitioners could have imported the same only with the permission of the Ministry of Environment, Forest and Climate Change. It is not the case of the petitioners that such permission was obtained. Therefore, the import has to be deemed illegal as per Rule 15. Rule 15(2) mandates that such illegally imported wastes shall be re-exported. The learned standing counsel points out that the rules have been made under the relevant provisions of Environment (Protection) Act, 1986. The said Act has a overriding effect on other laws. He therefore would contend that the question of provisionally releasing the goods cannot arise.
6. In support of this contention, the learned counsel relied on a decision of the Hon’ble Division Bench of the Madras High Court reported in 2013 (287) E.L.T 161 (Mad), (Commissioner of Customs (Imports) Chennai vs. V.S.Govindan. That was also a case of imported used tyres which were more than six years old. It was considered as hazardous waste and the Hon’ble Division Bench directed the importers to re-export the same. This decision was followed in Universal Trading Co. vs. The Commissioner of Customs, Kandla, 2014 (313) E.L.T 164 (Tri-Ahmd.,). The learned counsel drew my attention to the decision reported in 2015 (329) E.L.T 489 (Tri-Delhi), 2017 (347) E.L.T 4 (All.,), 2013 (297) E.L.T 184 (Mad.,) and 2012 (275) E.L.T 528 (Bom.,). Since the learned counsel for the petitioners placed heavy reliance on the decision of the Hon’ble Supreme Court reported in 2019 (365) E.L.T 465 (S.C) (Commissioner of Customs vs. Atul Automations Pvt., Ltd.), the learned standing counsel drew my attention to the decision of the Hon’ble Division Bench reported in 2019 (367) E.L.T 920 (Mad) (Commissioner of Customs, Chennai – II vs. City Office Equipment) in which Atul Automations Pvt., Ltd, case has been distinguished. The learned standing counsel called upon this Court to dismiss the writ petitions.
7. I carefully considered the rival contentions and went through the materials on record. I must straight away observe that the respondents are not adopting a consistent stand. Their case is that the petitioners had misdeclared the imported goods. The relevant Chapter heading is as follows :
