Bombay High Court
Royal Carbon Black (P) Limited And ... vs Chief Commissioner Of Custom on 17 October, 2011
Author: D.Y.Chandrachud
Bench: D.Y.Chandrachud, A. A. Sayed
PNP 1 WP1452-17.10.sxw
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGNAL CIVIL JURISDICTION
WRIT PETITION NO.1452 OF 2011
Royal Carbon Black (P) Limited and another ..Petitioners.
versus
Chief Commissioner of Custom, Mumbai
and others ..Respondents.
.....
Mr. M.M. Vashi i/b M/s. M.P. Vashi & Associates for the Petitioners.
Mr. R. Ashokan for Respondents 1 and 2.
Ms. Naveena Kumai for Respondent No.3.
......
CORAM : DR.D.Y.CHANDRACHUD &
A. A. SAYED, JJ.
17 October 2011.
ORAL JUDGMENT (PER DR.D.Y.CHANDRACHUD, J.) :
1. The Petitioners have a factory at Raigad which manufactures carbon black, fuel oil and other products. The raw material in the manufacturing activity is stated to consist of 'used cut' rubber tyres.
The Petitioners claim to have the permission of the Maharashtra Pollution Control Board issued on 14 January 2011 (Exhibit B to the Petition). According to the Petitioners, under the customs tariff rules, import of used tyres with one cut falls under Open General License (OGL) and such goods are freely importable; the relevant entry being Item 4004 of Chapter 40 of the Customs Tariff. However, according to the Petitioners, tyres with multiple cuts and/or shredded tyres are restricted items which require a licence from the Director General of Foreign Trade. A copy of the licence issued by the Director General ::: Downloaded on - 09/06/2013 17:51:32 ::: PNP 2 WP1452-17.10.sxw of Foreign Trade to the Petitioners is annexed to the Petition as Exhibit D. The licence which has been issued on 20 April 2011 inter alia contains the following endorsement :-
"This import is permitted through Nhava Sheva Port, subject to the condition that the permission for import is valid till the validity of the authorisation issued by the Maharashtra State PCB and the item of import should not be contaminated with any other waste and the Board shall regularly monitor the unit and keep the Ministry of Environment and Forest informed. This license is issued subject to actual user condition besides other usual conditions of import license."
The licence has been issued for a quantity of 20,000 M.Tons.
2. The Petitioners claim to have imported 'one cut' tyres and multiple cut and/or shredded tyres. According to the Petitioners, the First and Second Respondents viz. the Chief Commissioner of Customs and the Commissioner of Customs (Import) at JNPT Port have created obstacles in the import of both sets of goods on the ground that the Petitioners do not have permission / licence required for goods falling under entry B-3140 of Part B of Schedule III of the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules 2008. The Petitioners submitted a representation on 15 June 2011 stating that no licence or permission is required from the Union Ministry of Environment and Forests, which is the Third Respondent. The First and Second Respondents have issued a public notice dated 21 April 2009 (Notice 22/2009) laying down the procedure for drawal of samples and testing.
3. The relief that has been sought in the Petition is that - (i) The ::: Downloaded on - 09/06/2013 17:51:32 ::: PNP 3 WP1452-17.10.sxw First and Second Respondents be directed not to prevent the Petitioners from importing one cut tyres and/or shredded tyres without insisting upon a licence or permission from the Union Ministry of Environment and Forests; (ii) The First and Second Respondents be directed not to insist upon any licence from the Director General of Foreign Trade for importing tyres with one cut in bead wire (in two pieces), which are freely importable and (iii) The First and Second Respondents be directed to clear the consignments containing one cut tyres and/or shredded tyres by following the public notice dated 21 April 2009.
4. An affidavit in reply has been filed in these proceedings on behalf of the First and Second Respondents by the Assistant Commissioner of Customs and on behalf of the Third Respondent by the Deputy Director in the Ministry of Environment and Forests.
5. The First and Second Respondents have stated that public Notice 22/2009 was issued to provide a procedure for drawal of samples and testing of import consignments. The reason for the notice was that the volume of import and export trade has expanded over the last few years. The Customs Laboratories do not necessarily have the test equipment or facilities to conduct certain tests. Hence, in order to have a uniformity in approach for Laboratory testing, a committee was constituted for the three Customs Houses in Mumbai and pursuant to the recommendations of the Committee, the procedure for drawal of samples and testing was formulated for cargo of the normal type. However, paragraph 3.1 of the notice also covers special type of cargo such as vegetable oils and hazardous cargo.
::: Downloaded on - 09/06/2013 17:51:32 :::PNP 4 WP1452-17.10.sxw Hazardous cargo is inter alia governed by the Hazardous Wastes (Management, handling and Transboundary Movement) Rules 2008. In the present case, it has been stated that no live consignment of the Petitioners is pending and the Petitioners are raising academic issues, in order to preempt the Customs Authorities from implementing the required tests prescribed for Hazardous cargo under Hazardous Wastes (Management, Handling and Transboundary Movement) Rules 2008. The Petitioners, it is stated in the reply, import two kinds of items which are sought to be governed by these proceedings. The first is "Used rubber type with one cut in bead wire" while the second is "Shredded types (Tyre waste)". While the first item is under the Open General Licence and freely importable under the ITC (HS), the second item is a restricted item for which a licence from the Director General of Foreign Trade is required. Both the items are classified under Heading 4004 of the Customs Tariff which deals with "Waste pairing and scrap and rubber of waste, Pairing and scrap of Rubber (Other than Hard Rubber)". Waste pneumatic tyres also fall under Sr. No.3140 of Part B of Schedule III of Hazardous Wastes (Management, Handling and Transboundary Movement) Rules 2008, and it has been stated that such goods can be imported only with the permission of the Ministry of Environment and Forests. The Director General of Foreign Trade issues licence for tyre scrap (shredded) subject to the condition that the Ministry of Environment and Forests shall regularly monitor the importer's unit during the validity of the authorization issued by the Maharashtra Pollution Control Board. Moreover, there is a condition that no contamination should occur with any other waste in the imported goods. In order to satisfy the conditions of the licence and the Rules, import items ::: Downloaded on - 09/06/2013 17:51:32 ::: PNP 5 WP1452-17.10.sxw are subjected to tests to ascertain whether there has been any contamination or otherwise and based on the test report by the India Rubber Manufacturer's Research Association approved Laboratory, goods are released. The test done is stated to take between four and five days. According to the First and Second Respondents, the Petitioners cannot have the benefit of public Notice 22/2009 since in regard to Hazardous waste a special test is required with a view to ascertain the prohibited nature of the goods and goods cannot be released unless they are free of contamination.
6. In the affidavit that has been filed by the Ministry of Environment and Forests, reliance has been placed on the provisions of the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules 2008. It has been stated that waste pneumatic tyres, excluding those which do not lead to resource recovery, recycling, reclamation or direct reuse are listed at entry B-3140 in Part B of Schedule III of the Rules. Such products, it is stated, can be imported into the country only with the permission of Ministry of Environment and Forests. Similarly, tyres scrap (multi cut and/or shredded tyres) is also covered by item B-3140 of Part B of Schedule III. On 11 January 2011 the Petitioners applied for permission to import 30,000 MT of 'end of life tyres-scrap with multi cuts /shredded'. The application was considered by the Ministry of Environment and Forests and on 8 February 2011 a no objection was granted for the import of 20,000 MT of tyres scrap (multi cuts/shredded). Consequently, it has been submitted that if the Petitioners import more than 20,000 MT of tyres scrap, that would be illegal under the provisions of the Rules and would have to be re-
::: Downloaded on - 09/06/2013 17:51:32 :::PNP 6 WP1452-17.10.sxw exported at the cost of the importer.
7. The basic submission which has been urged on behalf of the Petitioners, as amplified in prayer clause (a) of the Petition is that no permission or licence is required of the Third Respondent, Ministry of Environment and Forests, under the provisions of the Environment (Protection) Act 1986 and the Rules made thereunder. In order to elicit assistance on the correct position in law, notice was issued to the Third Respondent which has filed an affidavit as noted above.
8. The Central Government has issued the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules 2008 in exercise of powers conferred by the Environment (Protection) Act 1986. Rule 2(l) defines the expression "hazardous waste" as follows :
"2(l) "hazardous waste" means any waste which by reason of any of its physical, chemical, reactive, toxic, flammable, explosive or corrosive characteristics causes danger or is likely to cause danger to health or environment, whether alone or when in contact with other wastes or substances, and shall include -
(i) waster specified under column (3) of Schedule I,
(ii) wastes having constituents specified in Schedule II if their concentration is equal to or more than the limit indicated in the said Schedule, and
(iii) wastes specified in Part A or Part B of the Schedule III in respect of import or export of such wastes in accordance with rules 12, 13 and 14 or the wastes other than those specified in Part A or Part B if they possess any of the hazardous characteristics specified in Part C of that Schedule."
(emphasis supplied).
9. Chapter IV of the Rules deals with the import and export of hazardous wastes. Rule 13(1) stipulates that no import of the ::: Downloaded on - 09/06/2013 17:51:32 ::: PNP 7 WP1452-17.10.sxw hazardous wastes from any country to India for disposal shall be permitted. However, under sub rule (2) of Rule 13 hazardous waste from any country shall be permitted only for recycling, recovery or reuse. Import or export of hazardous wastes specified in Schedule VI is absolutely prohibited. Rule 14 specifies that the import and export of hazardous wastes specified in Schedule III shall be regulated in accordance with the conditions laid down in the Schedule. In sub rule (2) of Rule 14 it has been specified in clause (i) that the import or export of hazardous wastes specified in Part A of Schedule III requires the prior informed consent of the country from where it is imported or to which it is exported and requires the licence of the Director General of Foreign Trade and prior written permission of the Central Government. Clause (ii) of sub rule (2) of Rule 14 provides that the import of hazardous wastes specified in Part B of Schedule III shall not require prior informed consent of the country from where it is imported.
10. Rule 16 lays down the procedure for the import of hazardous wastes. A person intending to import or transit for transboundary movement, hazardous wastes specified in Schedule III has to apply to the Central Government in respect of the proposed import with the prior informed consent wherever applicable and to send a copy of the application to the State Pollution Control Board. The State Pollution Control Board in turn has to forward its observations to the Ministry of Environment and Forests within thirty days. Under sub rule (2) of Rule 16, on receipt of an application the Ministry of Environment and Forests has to examine the application considering the comments and observations, if any, of the State Pollution Control ::: Downloaded on - 09/06/2013 17:51:32 ::: PNP 8 WP1452-17.10.sxw Board. The Ministry of Environment and Forests may grant permission for import within a period of sixty days subject to the condition that the importer has - (i) environmentally sound recycling, recovery or reuse facilities; (ii) adequate facilities and arrangement for treatment and disposal of wastes generated; and (iii) a valid registration from the Central Pollution Control Board and proof of being an actual user, if required. Under sub rule (3) the Ministry of Environment and Forests has to forward a copy of the permission granted under sub rule (2) to the Central Pollution Control Board, the concerned State Pollution Control Board and to the concerned Port and Customs authorities for ensuring compliance of the conditions of imports and safe handling of the hazardous waste. Under sub rule (4) the Ministry of Environment and Forests has to communicate its permission to the importer. The role of the Port and Customs authorities is specified in sub rule (5) of Rule 16. The Port and Customs authorities have to ensure that the shipment is accompanied by the movement document in Form 9 and the test report of analysis of the hazardous waste consignment in question, from a laboratory accredited by the exporting country or the inspection and certification agency approved by the Director General of Foreign Trade. In sub rule (6) the Customs authorities have to collect three samples of the consignment prior to clearance for analysis and to retain the report for a period of two years. Part B of Schedule III contains a list of hazardous wastes for import and export which do not require the prior informed consent of the country from which the product is imported. This is evident from the provisions of Rule 14(2)(ii). Item B-3140 of the Rules is as follows :
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"B3140 Waste pneumatic tyres, excluding those which do
not lead to resource recovery, recycling, reclamation or direct reuse."
11. The basis of the Petition is that no permission of the Ministry of Environment and Forests is required for the purposes of import. The submission totally lacks merit. Firstly, as the narration of facts would indicate the Petitioners themselves applied for permission, in response to which the Ministry of Environment and Forests granted its permission by an order dated 8 February 2011 for the import of 20,000 MT of tyres scrap (multi cuts /shredded) through Nhava Sheva Port. This was, however, valid till the validity of the authorisation issued by the State Pollution Control Board (31 March 2014) and it was stipulated that - (i) The import of the used tyres should not be contaminated with any other waste and (ii) The Port shall regularly monitor the unit and keep the Ministry informed.
12. But secondly, and perhaps more fundamental, Rule 14(ii) only relaxes the requirement of a prior informed consent of the country from which goods specified in Part B of Schedule III are imported.
However, the procedure prescribed in Rule 16 for the import of hazardous wastes has to be followed. Rule 16 makes it abundantly clear that the permission of the Union Ministry of Environment and Forests is necessary in respect of the import or transit for transboundary movement of hazardous wastes specified in Schedule III. The expression "transboundary movement" is defined by clause (za) of Rule 2 as follows :
"(za) "transboundary movement" means any movement of hazardous wastes from an area under the jurisdiction of one country to or through an area under the jurisdiction of another ::: Downloaded on - 09/06/2013 17:51:32 ::: PNP 10 WP1452-17.10.sxw country or through an area not under the jurisdiction of any country, provided at least two countries are involved in the movement."
13. Clearly any movement of hazardous wastes from an area under the jurisdiction of one country to an area under the jurisdiction of another country is covered by the expression "transboundary movement". In that view of the matter, the permission of the Ministry of Environment and Forests is required.
14. Prayer clause (b) seeks a direction to the Director General of Foreign Trade not to insist upon any licence for importing tyres with one cut in bead wire (in two pieces). The affidavit which has been filed by the First and Second Respondents is clear. As clarified on the affidavit, used rubber tyres with one cut in bead wire fall under the OGL whereas shredded tyres (tyre waste) are a restricted item for which a licence from Director General of Foreign Trade is required.
Consequently, the license which is issued to the Petitioners as annexed to the Petition is for the import of tyre scrap (multi cuts/ shredded) for manufacture of Bio-fuel oils and Carbon Black subject to the terms of the licence. In view of the clarification which is placed on the record in the affidavit, no further directions are necessary. No live consignment is pending clearance. Upon arrival of any consignment, it is for the Customs authorities to inspect and examine the consignment and follow the procedure established by law.
15. As regards prayer clause (c), the Petitioners seek a direction that the consignment should be cleared by following clause 3 of the public ::: Downloaded on - 09/06/2013 17:51:32 ::: PNP 11 WP1452-17.10.sxw notice dated 21 April 2009. The public notice, as its preamble indicates, is to facilitate the systematic drawal of samples and testing on an expeditious basis. Clause 3 provides for sampling during import. However, clause 3.1 of the public notice takes note of the fact that several waste materials are required to be tested for the purposes of Hazardous Wastes (Management, handling and Transboundary Movement) Rules 2008. In the present case, the affidavit filed on behalf of the First and Second Respondents indicates an objective and rational basis why the normal procedure for drawal of samples and testing as specified in the notice cannot be followed. The manner in which samples are required to be drawn has been adverted to in the affidavit of which a reference has already been made in the earlier part of the order. It has been stated on affidavit that samples are drawn with a view to satisfy the conditions of the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules 2008 and a test is carried out.
Based on the test report of an approved laboratory of India Rubber Manufacturer's Research Association (IRMRA), goods are released.
No exception can be taken to the procedure.
16. In these circumstances, save and except for the clarification in respect of prayer clause (b) of the Petition which has been made in the light of the explanation tendered on behalf of the First and Second Respondents on affidavit, we do not see any reason or justification to grant any relief as sought in prayer clauses (a) and (c).
17. The contention of the Petitioners that no permission of the Ministry of Environment and Forests is required is plainly fallacious.
::: Downloaded on - 09/06/2013 17:51:32 :::PNP 12 WP1452-17.10.sxw Moreover, in any event this Court in exercise of its writ jurisdiction under Article 226 of the Constitution would not interdict the careful scrutiny by the First, Second and Third Respondents that is necessary to ensure that the import of hazardous wastes takes place strictly in accordance with the governing requirements of the law. The Rules have been made in the public interest and with a view to ensure that the import, management and handling of hazardous wastes does not result in a deleterious effect on public health and the environment. The provisions contained in the Rules must be scrupulously enforced.
We accordingly dismiss the Petition.
There shall be no order as to costs.
(Dr. D.Y. Chandrachud, J.) (A. A. Sayed, J.) ::: Downloaded on - 09/06/2013 17:51:32 :::