Gujarat High Court
Kadri Enterprise A Proprietor Concern ... vs Union Of India & 2 on 6 November, 2015
Author: Harsha Devani
Bench: Harsha Devani, A.G.Uraizee
C/CA/9587/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CIVIL APPLICATION (FOR DIRECTION) NO. 9587 of 2015
In SPECIAL CIVIL APPLICATION NO. 8492 of 2015
================================================================
KADRI ENTERPRISE A PROPRIETOR CONCERN OF GULAM RASUL
GULAM MUSTUFA SHAIKH....Applicant(s)
Versus
UNION OF INDIA & 2....Respondent(s)
================================================================
Appearance:
MR DEVEN PARIKH, SR. ADVOCATE with MR S N THAKKAR, ADVOCATE
for the Applicant
MR RJ OZA, ADVOCATE for the Respondent No. 3
MS TRUSHA PATEL, GOVERNMENT PLEADER with MR PRIYANK P
LODHA, AGP for the Respondents No. 1 - 2
================================================================
CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI
and
HONOURABLE MR.JUSTICE A.G.URAIZEE
Date : 06/11/2015
ORAL ORDER
(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. By this application, the applicant seeks a direction to the opponent No.3, Assistant Commissioner of Customs, Mundra to permit the provisional clearance of import of old and used tyres made by the applicant under Bills of Entry No.17 and 18 of 2015 dated 16.03.2015.
2. The applicant herein is the original petitioner, who has filed the captioned petition challenging the order dated Page 1 of 11 HC-NIC Page 1 of 11 Created On Sun Nov 08 02:47:19 IST 2015 C/CA/9587/2015 ORDER 22.04.2015 passed by the opponent No.3 whereby, the applicant's request for assessment of Bills of Entry No.17 and 18 of 2015 dated 16.3.2015 has been rejected on the ground that the Ministry of Environment and Forests has issued an Office Memorandum dated 24.11.2014 and directed that old and used tyres for direct use should be treated as "prohibited goods" instead of "restricted goods". It is the case of the applicant that if under the EXIM policy, the import of used pneumatic tyres is permissible under the restricted or free category, the customs authorities cannot refuse assessment and clearance of such goods on the ground that such import not being permissible under some office memorandum issued by the Ministry of Environment and Forests.
3. Mr. Devan Parikh, Senior Advocate, learned counsel for the applicant submitted that the consignment sought to be imported and as imported has all along been described as "old and used discarded tyres not fit for fast moving vehicles and heavy loaded vehicles". Such import is of old and used tyres for re-use since the said tyres have a 55% residual life and such old tyres have been regularly imported since the past more than a decade all over the country by various importers. It was submitted that the import of the consignment in question falls under Chapter 40 of the Customs Tariff Act, 2014-15. The attention of the court was invited to Head Note-6 of Chapter 40 to point out that the same provides that "6. For the purposes of heading 4004, the expression "waste, parings and scrap" means rubber waste, parings and scrap from the manufacture or working of rubber and rubber goods definitely not usable as such because of cutting up, wear or other reasons." It was submitted that only the imports of "waste Page 2 of 11 HC-NIC Page 2 of 11 Created On Sun Nov 08 02:47:19 IST 2015 C/CA/9587/2015 ORDER pneumatic tyres" would be covered by the said entry 4004 00 00 which reads as "Waste, parings and scrap of rubber (other than hard rubber) and powders and granules obtained therefrom". Whereas the classification of the consignment in question, that is, old and pneumatic tyres would be covered by entry 4012 20 90 under the residual entry "others" of the main entry "4012" which relates to retreaded or used pneumatic tyres of rubber, solid or cushion tyres, tyre treads and tyre flaps of rubber and which are freely importable. However, the Customs Department has taken a view that such tyres would fall under entry 4012 2010 or 4012 2020, that is imports whereof are restricted and which would therefore require a licence for such import and in case the import is without licence, the same is subject to fine in lieu of confiscation.
4. It was submitted that insofar as "waste pneumatic tyres"
are concerned the same would be covered by entry 4004 00 00 under the description "waste, parings and scrap of rubber (other than hard rubber) and powders and granules obtained therefrom". Even the said import only falls within the restricted category and import thereof is not prohibited. It was submitted that the stand of the Customs Department is that the import of the said consignment cannot be permitted in view of the impugned office memorandum dated 24.11.2014 of the Ministry of Environment and Forests whereby it has been informed that the import of second hand tyres in the country for direct reuse is not permitted. It was submitted that such memorandum is administrative in nature and not a decision of the Ministry of Environment and Forests in accordance with any procedure prescribed under law.Page 3 of 11
HC-NIC Page 3 of 11 Created On Sun Nov 08 02:47:19 IST 2015 C/CA/9587/2015 ORDER
5. It was submitted that import of tyres for reuse is permissible under rule 13(2) of the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008 (hereinafter referred to as "the rules"). There is no dispute with regard to the fact that tyres imported by the applicant are in good condition and usable. Reference was made to the certificate dated 24.3.2015 of the Surveyor, Assessor and Valuer as appointed by the Customs Department who has certified that "the tyres inspected on random basis are not new ones but in GOOD CONDITION and USABLE. During the inspection, it is observed that there is no scrap tyres.". Moreover, the officers of the Gujarat Pollution Control Board (GPCB), who have inspected the consignment pursuant to the directions issued by this court, have also certified that the tyres were found to be used tyres without any cut, worn out and retreading and that the tyres were not hazardous material.
6. It was further submitted that according to the Ministry of Environment and Forests, the said import though of used pneumatic tyres, would fall within the definition of "hazardous waste under rules 3(1) read with entry No.B-3140 (being Part- B) of the rules and can be imported only with the prior permission of the Ministry of Environment and Forests. It was submitted that the stand of the Ministry of Environment and Forests is based on a misreading of the provisions of the rules for the reason that undisputedly the import in question is of used pneumatic tyres and not of waste or scrap tyres which are entirely different. It was submitted that Part-B of Schedule- III to the rules is based on rule 9 of the BASEL Convention which categorically differentiates the waste pneumatic tyres as distinguished from used pneumatic tyres. It was submitted that Page 4 of 11 HC-NIC Page 4 of 11 Created On Sun Nov 08 02:47:19 IST 2015 C/CA/9587/2015 ORDER in any case even under Entry No.3140, the import of used tyres for reuse is permissible, under the circumstances; the impugned office memorandum cannot go beyond the rules and provide that the import of second hand used tyres in the country is prohibited. It was submitted that the stand adopted by the respondent authorities being contrary to the provisions of the law, the relief, as prayed for in the application, deserves to be granted.
7. Vehemently opposing the application, Ms Trusha Patel, learned standing counsel for the respondents No.1 and 2 submitted that the used tyres for reuse fall under Schedule III Part-B (B-3140) of the rules and hence, are regulated for the purpose of import/export. Accordingly, the applicant has to apply to the Ministry of Environment and Forests for import of used tyres for any purpose including reuse thereof. Therefore, they are hazardous substances in relation to the import of which, permission is required to be obtained under rule 16 of the rules. It was submitted that the impugned office memorandum has been issued pursuant to the discussion and conclusions of the 33rd Technical Review Committee meeting constituted under the rules held on 28.10.2014 which was acceded to by the Ministry of Environment and Forests. Referring to Schedule III (Part B) of the rules, it was pointed out that as per rule 14(2) read with the note given below the Table, "all other wastes listed in this Schedule -3 (Part-B having no 'star/s' (*...) can only be imported in to the country with the permission of MoEF". Thus, the applicant is statutorily required to obtain prior permission of the Ministry of Environment and Forests for import of all such waste without 'star/s' which include waste pneumatic tyres, excluding those which do not Page 5 of 11 HC-NIC Page 5 of 11 Created On Sun Nov 08 02:47:19 IST 2015 C/CA/9587/2015 ORDER lead to resource recovery, recycling or direct reuse as listed at B-3140 of Schedule III Part-B. It was submitted that under rule 17 of the rules, the export and import of hazardous wastes from and into India shall be deemed illegal if it is without the permission of the Central Government in accordance with law. The applicant, in contravention of the rules, has imported second hand tyres without obtaining the prior approval prescribed under the rules and therefore, in view of the provisions of rule 17(2), it is required to re-export the imported wastes at its own cost. As regards the validity of the impugned office memorandum, the attention of the court was invited to rule 23 of the rules, to point out that the same provides that the Authority specified in column 2 of Schedule VII shall perform the duties as specified in column 3 of the Schedule, subject to the provisions of the rules. Referring to Schedule VII, the learned counsel pointed out the duties of the Ministry of Environment and Forests. It was submitted that one of the duties cast upon the Ministry of Environment and Forests, is identification of hazardous wastes and therefore, the Ministry is duly empowered to identify as to which goods are hazardous in nature and prohibit import thereof. It was, accordingly, urged that the goods imported by the petitioner being waste pneumatic tyres, the import of which is prohibited by the impugned office memorandum, the applicant is not entitled to the grant of any relief, as prayed for in the application, which deserves to be rejected.
8. Mr. R. J. Oza, learned senior standing counsel for the respondent No.3 adopted the arguments advanced on behalf of the respondents No.1 and 2.
Page 6 of 11HC-NIC Page 6 of 11 Created On Sun Nov 08 02:47:19 IST 2015 C/CA/9587/2015 ORDER
9. As noted hereinabove, the Ministry of Environment and Forests contends that the import in question is of waste pneumatic tyres falling under B-3140 of Schedule III to the rules. The record of the case shows that undisputedly, the goods imported by the applicant - petitioner are used pneumatic tyres fit for reuse. In the above backdrop reference may be made to entry B-3140 which read thus:
"Waste pneumatic tyres, excluding those which do not lead to resource recovery, recycling, reclamation or direct reuse."
10. Thus, a plain reading of the entry shows that the goods that are covered thereunder are waste pneumatic tyres and not used pneumatic tyres. The operations mentioned in the entry are to be done to the tyres which are waste and not second hand tyres which are to be reused. At this juncture reference may be made to the Chapter 40 of the CTI (HS) Classification of Export and Import Items, which clearly shows that there exists a category of Used Pneumatic tyres which fall under Exim Code 4012 20. Insofar as waste pneumatic tyres are concerned, they, prima facie, would be covered under heading 4004 which reads thus:
"Waste, parings and scrap rubber (other than hard rubber) and powders and granules obtained therefrom."
11. A perusal of Part B of Schedule III to the rules shows that below the Table, it is inter alia stated that the said list is based on Annexure-IX of the Basel Convention of Transboundary Movement of Hazardous Wastes and comprises of Wastes not Page 7 of 11 HC-NIC Page 7 of 11 Created On Sun Nov 08 02:47:19 IST 2015 C/CA/9587/2015 ORDER characterized as hazardous under Article I of the Basel Convention.
12. Entry B-3140 under the Basel Convention reads thus:
"Waste pneumatic tyres, excluding those destined for Annex IV A operations."
13. Annexure IV bears the heading "Disposal Operations". Section-A thereof bears the heading "Operations which do not lead to the possibility of resource recovery, recycling, reclamation, direct re-use or alternative uses and encompasses all such disposal operations which occur in practice. The disposal operations, inter alia, include deposit into or onto land (e.g. landfill, etc.); land treatment (biodegradation of liquid or sludgy discards in soils, etc.); deep injection (e.g., injection of pumpable discards into wells, salt domes of naturally occurring repositories, etc.); surface impoundment (e.g. placement of liquid or sludge discards into pits, ponds or lagoons, etc.); specially engineered landfill (e.g., placement into lined discrete cells which are capped and isolated from one another and the environment, etc.); release into a water body except seas/oceans; release into seas/oceans including sea-bed insertion; biological treatment not specified elsewhere in the Annexure which results in final compounds or mixtures which are discarded by means of any of the operations in Section-A; physico chemical treatment not specified else where in the Annexure which results in final compounds or mixtures which are discarded by means of any of the operations in Section A (e.g., evaporation, drying, calcination, neutralization, precipitation, etc.); and incineration Page 8 of 11 HC-NIC Page 8 of 11 Created On Sun Nov 08 02:47:19 IST 2015 C/CA/9587/2015 ORDER on land, etc. Therefore, even waste pneumatic tyres, if they are destined for the operations enumerated under Section-A of Appendix IV, do not fall within the category of waste pneumatic tyres. Under the circumstances, the import in question which is comprised of used pneumatic tyres which are described as old and used discarded tyres not fit for fast moving vehicles and heavy loaded vehicles and which are sought to be reused for tractor trolleys and animal driven carts etc., prima facie, would not fall within the ambit of entry B-3140 of Part B of Schedule III to the rules. Consequently, when the import in question does not fall within the ambit of the definition of hazardous waste as contemplated under the Environment (Protection) Act, 1986 and the rules framed thereunder, the question of applicability of rule 16 and 17 of the rules would not arise.
14. As regards the impugned office memorandum, the same does not appear to be relatable to any power conferred by the Act or the rules framed thereunder, including the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008.
15. On behalf of the respondents, reliance has been placed on rule 23 read with Schedule VII to the rules. In the opinion of this court, rule 23 of the rules merely provides for duties of various authorities and Schedule VII enumerates the duties cast upon the authorities mentioned therein. It cannot be gainsaid that duty is not synonymous with power.
16. In the absence of any power conferred upon the Ministry of Environment and Forests, to specify any additional category of hazardous wastes being traceable to any provisions of the Page 9 of 11 HC-NIC Page 9 of 11 Created On Sun Nov 08 02:47:19 IST 2015 C/CA/9587/2015 ORDER Act or the rules, the impugned memorandum, as rightly submitted by the learned counsel for the applicant, is merely in the nature of administrative instructions and has no enforceability in law. Under the circumstances, the prohibition contained in the impugned office memorandum not being backed by any statutory provisions, prima facie, cannot be relied upon for the purpose of refusing to process the bills of entry submitted by the applicant.
17. In the aforesaid premises, the court is of the view that the applicant has made out a prima facie case for grant of interim relief. The balance of convenience also lies in favour of the applicant, inasmuch as, the import in question, prima facie, does not appear to be governed by the rules. Irreparable injury is writ large on the face of the record, inasmuch as, the applicant is suffering from severe losses on account of the demurrage etc.
18. For the foregoing reasons, the application succeeds and is, accordingly, allowed. The respondents are directed to forthwith permit assessment and clearance of the goods imported by the applicant - petitioner under Bills of Entry No.17 and 18 dated 16.03.2015 in accordance with the provisions of the Customs Act, 1962, subject to the following conditions:
(i) The Customs authorities shall depute a Surveyor to check whether the tyres are reusable with or without retreading.
(ii) The petitioner shall not clear any goods which are not reusable.Page 10 of 11
HC-NIC Page 10 of 11 Created On Sun Nov 08 02:47:19 IST 2015 C/CA/9587/2015 ORDER
(iii) The responsible person concerned will file an undertaking to the effect that they will sell the imported goods in a manner that they will be reused.
19. Rule is made absolute accordingly, with no order as to costs.
Direct Service is permitted.
(HARSHA DEVANI, J.) (A.G.URAIZEE,J) parmar* Page 11 of 11 HC-NIC Page 11 of 11 Created On Sun Nov 08 02:47:19 IST 2015