Madras High Court
Norasia Container Lines Ltd vs Union Of India on 21 September, 2007
Author: V.Ramasubramanian
Bench: V.Ramasubramanian
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 21/09/2007 CORAM: THE HONOURABLE MR.JUSTICE V.RAMASUBRAMANIAN W.P.(MD)No.768 of 2007 and M.P.(MD).Nos.1 and 2 of 2007 Norasia Container Lines Ltd., rep. By Mr.S.Samuel Benett its duly authorised Power of Attorney Holder Ms.CSAV Group Agencies (India) Pvt. Ltd., "VVD Mahal", Tuticorin-628 003. ... Petitioner Vs. 1.Union of India, rep. By its Secretary, Ministry of Finance, New Delhi. 2.ITC Ltd (BR.SL.No.70) rep. By its Vice President (Commercial) Mr.BVS Jogarao Divisional Head Quarters, 106, Sardar Patel Road, Secunderabed - 500 003 India. 3.Indev Shipping Services (Tuticorin) Pvt. Ltd., Customs House Agents, No.31, Kerecope Street, Tuticorin-628 001. 4.Tuticorin Port Trust, rep. By its Chairman, Harbour Road, Tuticorin. 5.The Commissioner of Customs, Office of the Commissioner of Customs, Customs House, New Harbour Estate, Tuticorin-4. 6.PSA Sical terminal Ltd., Port of Singapore Authorities, Operator of Tuticorin Port's Container Terminal Tuticorin Port, Tuticorin. ... Respondents PRAYER Writ Petition filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Mandamus calling upon the respondents 4, 5 & 6 to take steps to destuff the cargo from the petitioner's 35 & 40' FCL containers, at present lying in the 5th respondent's container yard as provided under Section 61 & 62 of the Major Port Trust Act and Section 30 & 48 of the Customs Act and release the empty containers to the petitioner and Grant such other further relief's. !For Petitioner ... Mr.V.J.Mathew ^For RR 1 and 5 ... Mr.V.T.Gopalan, Addl. Solicitor General Mr.Pon.Muthuramalingam Asst. Solicitor General For RR 2 ... Mr.Arvind P.Datar Senior Counsel for Mr.M.S.Krishnan and Mr.S.Raghavan For RR 4 ... Mr.S.Yashwanth For RR 6 ... Mr.S.Silambanan Senior Counsel for M/S.Silambanan Associates :ORDER
M/s.ITC Limited, Secunderabed who is the second respondent herein, filed two Bills of Entry in September 2005, for the clearance of 1007 MTS of goods declared as waste paper, contained in 40 containers, supplied by a Company by name M/s.Evergreen Specialities Inc, USA. The Bills of Entry were filed by the second respondent through the third respondent. On an examination of the goods found in the containers, the Customs Department came to the conclusion that there was contaminated municipal waste in the containers which could not be allowed clearance.
2.Therefore, the Commissioner of Customs, who is the 5th respondent herein, issued a show cause notice dated 26.09.2005 under Section 124 of the Customs Act calling upon the second respondent as well as the third respondent to show cause as to why the goods should not be directed to be re-exported at the risk, cost and consequences of the second and third respondents. In the meantime, M/s.Evergreen Specialities Inc, upon whom the second respondent placed orders, for the supply of waste paper, sent a communication dated 26.9.2005 from USA that by mistake, somebody else's cargo with plastic content destined for another country was shipped to the second respondent herein. The second respondent sent a letter dated 27.09.2005 withdrawing the two Bills of Entry dated 13.09.2005 and 21.09.2005 in respect of those 40 containers on the ground that the supply was contrary to the orders placed by them on M/s.Evergreen Specialities Inc, USA.
3.The Central Pollution Control Board, Bangalore inspected the cargo on 29.09.2005 and submitted a report on 04.10.2005. Therefore, the Commissioner of Customs passed a Note Order on 07.10.2005 directing the importer ITC Ltd.,namely, the second respondent herein, to re-export the cargo covered by the aforesaid two Bills of Entry, at their own cost, risk and consequences, in terms of Rule 15 of Hazardous Wastes (Management and Handling) Rules, 1989. It was followed by an order-in-original dated 08.12.2005 confirming the Note Order dated 07.10.2005.
4.In pursuance of the aforesaid order, re-export of the cargo was made, in favour of the exporter M/s.Evergreen Specialities Inc. However, such re-export was not made to USA, but was made to Ajman, UAE. This re-export was made by emptying the original containers in which the cargo landed up from USA at Tuticorin Port and by stuffing the cargo in the containers belonging to the petitioner. The petitioner provided 40 containers for the shipment from Tuticorin Port to Ajman and those containers were of the description 40' FCL.
5.Unfortunately, the Customs Authorities at Ajman cleared only five containers and directed the petitioner to take back the remaining 35 containers to the Port of origin on the ground that they contained materials restricted for entry in the UAE. Therefore, after putting the second and third respondents on notice, the petitioner brought back the 35 containers with the cargo, back to the Tuticorin Port.
6.But the second respondent disowned the cargo and the Customs Department namely, the fifth respondent is not willing to dispose of the cargo as "abandoned material" on the ground that hazardous material cannot be disposed of but only be destroyed by the importer or exporter. Consequently, the containers lent on hire by the petitioner, (to whoever it was) are lying in the warehouse of the sixth respondent within the container terminal of the Tuticorin Port Trust. As a person who has provided storage space for the containers, the sixth respondent is charging ground rent day by day on the petitioner.
7.Under these circumstances, as a person whose containers are caught in the crossfire between the respondents and as a person who is made to pay demurrage charges for the past about 20 months or so, the petitioner has come up with the present writ petition seeking the issue of a writ of mandamus to direct the respondents 4, 5 and 6 to take steps to de-stuff the cargo from the containers belonging to the petitioner, now lying in the container yard of the 5th respondent and to release the empty containers to the petitioner.
8.Heard Mr.V.J.Mathew, learned counsel for the petitioner, Mr.V.T.Gopalan, learned Additional Solicitor General appearing for the respondents 1 and 5, Mr.Arvind P.Datar, learned Senior Counsel and Mr.M.S.Krishnan learned Counsel appearing for the 2nd respondent, Mr.S.Yashwanth, learned counsel for the 4th respondent and Mr.S.Silambanan, learned Senior Counsel for the 6th respondent.
9.Before adverting to the factual matrix and the rival contentions, it is relevant note that pending disposal of the writ petition, the petitioner sought an interim direction in M.P.No.1 of 2007 for refund of the amounts debited from the petitioner's account by the respondents 4, 5 and 6 towards ground rent charges. The said miscellaneous petition was disposed of by Justice M.JAICHANDREN on 19.04.2007, the operative portion of which reads as follows:
"In the above circumstances, the fifth respondent is directed to permit the petitioner to shift the containers containing the Cargo, which is the subject matter of the writ petition, to any one of the Customs Bonded Warehouses, in Tuticorin, within a period of four weeks from the receipt of a copy of this order without prejudice to the contentions of the parties concerned. The fifth respondent is also directed to take appropriate steps to comply with Rule 15(2)(ii) of The Hazardous Wastes (Management and Handling) Rules, 1989, expeditiously. The fourth and sixth respondents are directed to take necessary steps to enable the fifth respondent to comply with this order. This M.P. is ordered accordingly. Post on 25.04.2007."
10.The Union of India and the Commissioner of Customs who are the respondents 1 and 5 herein filed an appeal against the said order in W.A.No.175 of 2007. The writ appeal was disposed of by the Division Bench by an order dated 31.05.2007 and the operative portion of the order of the Division Bench is as follows:
"Considering the facts and circumstances of the case, the Court is of the considered opinion that the questions whether the transfer of the waste has taken place in the presence of the Customs Authority, after making any examination or supervision and whether it is an hazardous one or whether it requires, at this stage, any further report to be called for have got to be gone into on the merits of the matter. Till that time, the Court is of the considered opinion that the order under challenge is got to be continued and it would be fit and proper that the writ petition could be disposed of at the earliest. Under these circumstances, the writ petition has got to be disposed of by the learned single Judge within a period of four weeks herefrom. Accordingly, it is ordered. The time for compliance of the order of the learned single judge is extended by four weeks. Till that time, debiting the ground rent is suspended. Accordingly, this writ appeal is disposed of. Consequently, connected MP is closed."
It is in view of the direction issued by the Division Bench to dispose of the writ petition within four weeks that the writ petition has come up for disposal. The containers have not also been shifted so far to a private bonded warehouse, in compliance with the aforesaid interim order, as a result of which, the petitioner issued a notice threatening to initiate contempt proceedings and the fifth respondent has sent a reply. It is in this background that the writ petition was taken up by me for disposal.
11.Mr.V.J.Mathew, learned counsel for the petitioner contended that the petitioner merely provided 40 containers on hire for the export of a cargo from Tuticorin Port Trust to Ajman, UAE and that on account of the threat posed by the Customs Authorities of UAE, the petitioner was compelled to bring back the containers. Therefore, the retention of the containers in the container terminal of the fourth respondent, fastened with a liability to pay demurrage to the sixth respondent has visited the petitioner with two serious consequences namely
-
(a)35 containers are now lying idle for the past nearly 20 months resulting in heavy opportunity cost to the petitioner; and
(b)the petitioner is made to pay ground rent unnecessarily to the sixth respondent, for no sin committed by the petitioner except that of lending their containers on hire.
12.Therefore, the prayer of the petitioner is for de stuffing the cargo and for releasing the containers. In so far as the loss allegedly sustained by the petitioner under the entire transaction is concerned, the petitioner has already filed a civil suit in O.S.No.7 of 2007 on the file of the District Court at Tuticorin seeking recovery of a sum of Rs.2,28,88,825.82 together with interest. All the respondents herein except the Union of India are cited as defendants in the said suit. The petitioner has also impleaded the exporter M/s.Evergreen Specialities Inc, USA as a defendant in the said suit.
13.Mr.V.T.Gopalan, learned Additional Solicitor General, appearing for the Union of India and the Commissioner of Customs, contended that the Ministry of Environment and Forests, Government of India, New Delhi had already issued an Office Memorandum bearing No.13-1/2004-HSMD dated 24.03.2005 permitting the import of paper, paperboard and paper product wastes into the country without any license, subject to the condition that it should not be contaminated with municipal and other wastes. Since the consignment of 40 containers were imported by the second respondent from M/s.Evergreen Specialities Inc, USA under two Bills of Entries dated 13.9.2005 and 21.09.2005 and the same were found by the Customs Authorities to contain municipal waste, a show cause notice was issued on 26.09.2005 by the fifth respondent. It was followed by a Note Order dated 07.10.2005 and an order-in-original dated 08.12.2005 directing the second respondent to re-export it. Therefore, according to the learned Additional Solicitor General, the second respondent is obliged to re-export it or arrange for the incineration of the cargo, in accordance with the Hazardous Wastes (Management and Handling) Rules, 1989. Till the goods are either re-exported or incinerated, the question of permitting the petitioner to take away the containers, would not arise. The respondents 1 and 5, according to the learned Additional Solicitor General, apprehend that if the containers are emptied and the petitioner is allowed to take away the containers, the liability fastened upon the importer or the exporter under the aforesaid Rules, to dispose it of or incinerate it, will never get discharged. This apprehension on the part of the respondents 1 and 5 is also fortified by the fact that the second respondent had already disowned the cargo. Under such circumstances, the learned Additional Solicitor General contended that the petitioner should not be allowed to take away the containers unless the cargo contained therein is disposed of in the manner provided under the aforesaid Rules.
14.Mr.Arvind P.Datar, learned Senior Counsel for the second respondent contended -
(a) that even as early as on 26.09.2005, the exporter M/s.Evergreen Specialities Inc, USA sent a communication to the Commissioner of Customs (5th respondent) admitting to a mistake on their part in shipping somebody else's cargo destined for another country to the second respondent;
(b) that as a consequence, the second respondent withdrew the two Bills of Entry dated 13.09.2005 and 21.09.2005 in respect of the cargo in question, by their letter dated 27.09.2005;
(c) that on account of the withdrawal of the Bills of Entry, the exporter M/s.Evergreen Specialities Inc arranged to recall the goods, but to a different destination namely Ajman, UAE; and
(d) that the goods so exported to Ajman in the 40 containers in question came back to the Tuticorin Port on account of the rejection of the same by the Customs Authorities at Ajman and hence, the second respondent ceased to be either an importer or an exporter in respect of the goods and consequently, they would have nothing to do with the prayer of the petitioner.
15.In addition to the aforesaid, Mr.Arvind P.Datar, learned Senior Counsel for the second respondent also contended that there has been no conclusive finding by the Central Pollution Control Board that what is contained in the 35 containers of the petitioner is actually Hazardous Waste, coming within the purview of the Hazardous Wastes (Management and Handling) Rules, 1989. In the absence of such a conclusive finding, the resistance on the part of the respondents 1 and 5 to allow the cargo to be transferred to other containers and to allow the containers to be shifted to any other Private Bonded Warehouse, was improper. As a matter of fact, the cargo came in different containers from USA and after the order of the Commissioner of Customs, they were transferred to the containers of the petitioner in the presence of the Customs Officials and exported to Ajman, UAE. Therefore, according to the learned Senior Counsel for the second respondent, the refusal of the customs department to permit the petitioner to shift the containers to a private bonded warehouse and to transfer the cargo to other containers, is unjustified, (i) especially when they permitted the same on the earlier occasion and (ii) also since even a private bonded warehouse would be under the lock and key of the Assistant Commissioner of Customs.
16.Without prejudice to the aforesaid submissions, Mr.Arvind P.Datar, learned Senior Counsel submitted that the second respondent would have no objection to the prayer of the petitioner being allowed to the limited extent of permitting the containers to be shifted to a Private Bonded Warehouse. After such shifting, a team of experts as suggested by the Central Pollution Control Board could examine the samples of the cargo, to arrive at a final conclusion. If the conclusion so arrived at, is that the cargo contained hazardous waste, it could be disposed of in a manner as suggested by the team of experts. If the finding is otherwise, the material could be disposed of even by the Customs Authorities, as abandoned material.
17.Mr.S.Silambanan, learned Senior Counsel appearing for the sixth respondent, whose storage space is now occupied by the containers of the petitioner, contended that the sixth respondent also wants the containers to be shifted and the ground rent paid to the sixth respondent, up to the date of such shifting.
18.On a careful consideration of the rival contentions, it is clear that there is no quarrel with the fundamental issue namely that the petitioner should get back their containers. But the quarrel is only with respect to the entitlement of the petitioner to have the containers shifted to another Private bonded Warehouse without the responsibility for the disposal of the cargo in accordance with the aforesaid rules, being fixed on anyone.
19.Both on account of their abandonment of the cargo at the earliest point of time and also on account of the civil litigation for damages faced by them, the second respondent claims that they have no responsibility for the disposal of the cargo. According to the second respondent, they have nothing to do with the cargo after the withdrawal of the Bills of Entry and the re-export of the cargo to Ajman, UAE. Therefore, according to the second respondent it is the look out of the petitioner or the Customs Authorities or M/s.Evergreen Specialities Inc, USA to export it or extinguish it.
20.But the Customs Authorities contend that by virtue of Rule 15(3) of the Hazardous Wastes (Management and Handling) Rules, 1989, the liability to dispose it of, is only with the importer or the exporter and the Customs Authorities cannot take the role of a Municipal Corporation to clear or dispose of such waste material.
21.In order to appreciate the conflicting stand taken by the second respondent and the fifth respondent, it is necessary to examine some of the provisions of the Customs Act, 1962, the Major Port Trusts Act, 1963 and Hazardous Wastes (Management and Handling) Rules, 1989. Section 62 of the Major Port Trusts Act, 1963 empowers the Board of Trustees of a Major Port to dispose of goods not removed from the premises within a time limit. Section 62 reads as follows:
"62.Disposal of goods not removed from premises of within time limit-
(1)Notwithstanding anything contained in this Act, where any goods placed in the custody of the Board upon the landing thereof are not removed by the owner or other person entitled thereto from the premises of the Board within one month from the date on which such goods were placed in their custody, the Board may, if the address of such owner or person is known, cause a notice to be served upon him by letter delivered at such address or sent by post, or if the notice cannot be so served upon him or his address is not known, cause a notice to be published in [the Port Gazette or where there is no Port Gazette, in the Official Gazette] and also in at least one of the principal local daily newspapers, requiring him to remove the goods forthwith and stating that in default of compliance therewith the goods are liable to be sold by public auction [or by tender, private agreement or in any other manner].
Provided that where all the rates and charges payable under this Act in respect of any such goods have been paid, no notice of removal shall be so served or published under this sub-section unless two months have expired from the date on which the goods were placed in the custody of the Board. (2)The notice referred to in sub-section (1) may also be served on the agents of the vessel by which such goods were landed.
(3)If such owner or person does not comply with the requisition in the notice served upon him or published under sub-section (1), the Board may, at any time after the expiration of two months from the date on which such goods were placed in its custody, sell the goods by public auction [or in such cases as the Board considers it necessary so to do, for reasons to be recorded in writing sell by tender, private agreement or in any other manner] after giving notice of the sale in the manner specified in sub-sections (2) and (3) of section 61. (4)Notwithstanding anything contained in sub-section (1) or sub-section (3)-
(a) the Board may, in the case of animals and perishable or hazardous goods, give notice of removal of such goods although the period of one month or, as the case may be, of two months specified in sub-section (1) has not expired or give such shorter notice of sale and in such manner as, in the opinion of the Board, the urgency of the case requires;
(b)arms and ammunition and controlled goods may be sold in accordance with the provisions of sub-section (4) of Section 61.
(5)The Central Government may, if it deems necessary so to do in the public interest, by notification in the Official Gazette, exempt any goods or classes of goods from the operation of this section."
Section 61 also contains a similar provision for the sale of the goods if rates or rent are not paid or lien for freight is not discharged.
22.Section 48 of the Customs Act, 1962 prescribes the Procedure for sale of goods which are not cleared, warehoused or transhipped within 30 days after unloading. Section 48 reads as follows:
"48.Procedure in case of goods not cleared, warehoused or transhipped within [thirty days] after unloading.- If any goods brought into India from a place outside India are not cleared for home consumption or warehoused or transhipped [within [thirty days]] from the date of the unloading thereof at a customs station or within such further time as the proper officer may allow or if the title to any imported goods is relinquished, such goods may, after notice to the importer and with the permission of the proper officer be sold by the person having the custody thereof;
Provided that-
(a)animals, perishable goods and hazardous goods, may, with the permission of the proper officer, be sold at any time;
(b)arms and ammunition may be sold at such time and place and in such manner as the Central Government may direct.
Explanation.-In this section, "arms" and "ammunition" have the meanings respectively assigned to them in the Arms Act, 1959 (54 of 1959)."
23.While Section 61 and 62 of the Major Port Trusts Act, 1963 empowers the Board of Trustees of the Port Trust itself to dispose of the goods if the goods are not removed by the owner within one month, Section 48 of the Customs Act empowers the person having the custody of the goods to sell the goods. It is pertinent to note that sub-section (4) of Section 62 of the Major Port Trusts Act empowers the Port to dispose of even hazardous goods after serving notice of a shorter duration upon the importer. Similarly, the proviso under Section 48 of the Customs Act, 1962 also enables the sale of even hazardous goods.
24.It is in the light of such a power conferred upon the Port Authorities and upon the person having custody of the goods, to sell even hazardous goods, under the aforesaid provisions of both the Acts that the learned Senior Counsel for the second respondent took a stand that the Customs Authorities are entitled to dispose of the cargo when it is abandoned.
25.Coming to the Hazardous Wastes (Management and Handling) Rules, 1989, Rule 15 reads as follows:
"15.Illegal traffic.- (1)The movement of hazardous wastes from or to the country shall be considered illegal:-
(i)if it is without prior permission of the Central Government;
(ii)if the permission has been obtained through falsification, misrepresentation or fraud; or
(iii)it does not conform to the shipping details provided in the document; (2)In case of illegal movement, the hazardous wastes in question-
(i)shall be shipped back within thirty days either to the exporter or to the exporting country;
(ii)shall be disposed of within thirty days from the date of off-lading subject to inability to comply with sub-rule 2 (1) above [in accordance with the procedure laid down by the State Pollution Control Board or Committee in consultation with Central Pollution Control Board]. (3)In case of illegal transboundary movement of hazardous wastes, the occupier exporting hazardous waste from the country or the exporter exporting hazardous waste to the country and importer importing hazardous waste into the country shall ensure that the wastes in question is safely stored and shipped or disposed off in an environmentally sound manner within thirty days from the date of off-loading.
(4)The exporting country shall bear the costs incurred for the disposal of such waste.]"
26.From a reading of Rule 15(3), it is clear that in the case of illegal transboundary movement of hazardous wastes, there is a liability fastened upon three persons namely -
(a) the occupier exporting hazardous waste from the country;
(b) the exporter exporting hazardous waste to the country; and
(c) importer importing hazardous waste into the country.
The obligation under Rule 15(3) imposed upon the above three persons, is two fold namely,
(a)that the wastes in question is safely stored and shipped or
(b)that it is disposed of in an environmentally sound manner within thirty days from the date of off-loading.
27.On account of the manner in which the aforesaid liability or obligation is fastened upon the occupier, exporter or importer, the learned Additional Solicitor General contended that the Customs Authorities are not obliged to dispose of hazardous waste and that it is the responsibility of the second respondent to do it.
28.In the light of the rival contentions revolving around the provisions of the Customs Act, Major Port Trusts Act and Hazardous Wastes (Management and Handling) Rules, 1989, as extracted above, the core issue that arises for consideration is, as to whether the second respondent or the fifth respondent or any other person has the obligation to dispose of the cargo and as to whether the petitioner should be made to suffer till the dispute between the respondents 2 and 5 is resolved.
29.As seen from the narration of the facts in paragraphs 1 to 6 above, it was the second respondent who imported waste paper from M/s.Evergreen Specialities Inc, USA. It is admitted by the learned Senior Counsel appearing for the second respondent that thousands of tonnes of waste paper stuffed in one thousand containers were imported by the second respondent from M/s.Evergreen Specialities Inc, USA. While 960 containers got cleared, 40 containers became the subject matter of dispute. It is admitted by the second respondent that the second respondent had filed two Bills of Entry dated 13.09.2005 and 21.09.2005 in respect of the 40 containers in question, whose contents were declared as waste paper. Therefore, there can be no denial of the fact that the import of the cargo contained in 40 containers, at the earliest point of time, was by the second respondent from M/s.Evergreen Specialities Inc, USA.
30.After the Customs Authorities declared the cargo contained in these 40 containers to be hazardous waste, the second respondent withdrew the Bills of Entry, by a communication dated 27-9-2005 taking umbrage under the fact that the exporter Evergreen Specialities Inc, USA admitted to a mistake in sending the wrong consignment to a wrong country. But, I am unable to comprehend as to how the second respondent could claim to have washed their hands off the entire dispute, merely by the withdrawal of the Bills of Entry and also contend that they are neither the importers nor the exporters within the meaning of Rule 15(3) of the Hazardous Wastes (Management and Handling) Rules, 1989.
31.It is true that an attempt was made to re-export the cargo to Ajman, UAE at the instance of the exporter Evergreen Specialities Inc, USA and it is also true that the Customs Authorities accepted the shipping bills filed in respect of the said cargo intended for shipment to Ajman, UAE. But the contention that after it was re-exported from Tuticorin Port to Ajman, the second respondent completely went out of the picture with a gate pass to freedom, is to say the least, uncharitable. The second respondent, may be entitled to disown the cargo by withdrawing the Bills of Entry, but they cannot disown their liability under the Hazardous Wastes (Management and Handling) Rules, 1989, atleast for 5 different reasons, which are enumerated and elaborated in the following paragraphs.
32.Reason No: 1 This is not a case where some unknown person from an alien land has sent an unsolicited cargo in favour of an innocent person who had never ordered the import. This is a case where the material contained in the 40 containers in question, came as part of a large consignment (of 1000 containers), a major portion of which, was cleared by the second respondent. To put in a nutshell--
(a)It was the second respondent who ordered the import of waste paper;
(b)The import was from a regular supplier of the second respondent namely, M/s.Evergreen Specialities Inc, USA; and
(c)The cargo was part of a large consignment, for which the second respondent had filed Bills of Entry. Therefore, the withdrawal of 2 Bills of Entry by the second respondent in respect of the 40 containers in question and their subsequent transhipment to UAE, cannot discharge the second respondent of their obligations to comply with the law of the land.
33.Reason No: 2 Mr.Arvind P.Datar, learned Senior Counsel appearing for the second respondent contended that in view of various provisions of The Customs Act, 1962, the second respondent cannot be fastened with any obligation to send back the cargo in question. But as admitted by the learned Senior Counsel for the second respondent, their attempt to wriggle themselves out of the controversy, is primarily on account of a suit for compensation filed by the petitioner against all the respondents herein. Therefore, the second respondent apprehends that if they take upon themselves, the liability of sending back the cargo to USA, it would have a bearing upon the civil suit. In the civil suit for compensation filed by the petitioner, the second respondent appears to have taken a stand that they had nothing to do with the cargo and that therefore, they are not responsible to pay any compensation to the petitioner on account of the present imbroglio.
34.But the question as to whether the second respondent is an importer or exporter or occupier within the meaning of Rule 15(3) of the Hazardous Wastes (Management and Handling) Rules, 1989 and the question as to whether the second respondent has a duty to dispose of the cargo in accordance with the aforesaid rules, cannot be decided, with an eye on the civil suit for compensation pending before the District Court. The issue pending before the Civil Court is one arising out of the contractual obligation between the petitioner and the second respondent or Evergreen Specialities Inc, USA, (whoever had engaged the services of the petitioner). The question that has arisen for consideration in the present writ petition is not one arising out of a contractual obligation, but one arising out of a statutory obligation.
35.Therefore, the issue as to whether the second respondent has an obligation under Rule 15(3) of the aforesaid rules, has to be decided only with reference to these rules and not with reference to the contractual obligations between the petitioner and the second respondent or Evergreen Specialities Inc, USA.
36.Reason No: 3 Moreover, the obligation imposed under Rule 15(3) of the aforesaid rules cannot even be determined with reference to the provisions of the Customs Act, 1962. Even if the second respondent does not have an obligation to dispose of the cargo under the Customs Act, 1962, it cannot have a bearing upon their obligation to dispose of the cargo under Rule 15(3) of the aforesaid rules. The Customs Act, 1962 and the Hazardous Wastes (Management and Handling) Rules, 1989, occupy different fields. Therefore, the absence of a statutory obligation under one of them cannot result in the obligation imposed by the other, getting wiped out.
37.The above conclusion is inevitable for the simple reason that the Customs Act, 1962 as well as the aforesaid rules, have their own definitions of the words importer and exporter. The word exporter is defined under Section 2(20) of the Customs Act as follows:
"(20)"exporter", in relation to any goods at any time between their entry for export and the time when they are exported, includes any owner or any person holding himself out to be the exporter."
The same word is defined under Rule 3(10) of the Hazardous Wastes (Management and Handling) Rules as follows:
"(10)"exporter" means any person under the jurisdiction of the exporting country who exports hazardous wastes and the exporting country itself, who exports hazardous wastes."
Similarly the word importer is defined under Section 2(26) of the Customs Act as follows:
"(26)"importer", in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer."
But the same word is defined under Rule 3(18) of the Hazardous Wastes (Management and Handling) Rules as follows:
"(18)"importer" means an occupier or any person who imports hazardous wastes."
38.Therefore, it is clear that the Customs Act and the Hazardous Wastes (Management and Handling) Rules, 1989 operate at two different levels and they occupy different fields. Hence, even if the second respondent does not have an obligation to clear the cargo and dispose it of, under the Customs Act, 1962 it cannot automatically absolve them of their liability under Rule 15(3) of the Hazardous Wastes (Management and Handling) Rules.
39.Reason No: 4 Moreover, the provisions of Section 48 of the Customs Act which enables the person having custody of the goods to sell the uncleared goods have to be understood, as conferring only a right upon the Customs Department and the person having custody. Section 48 of the Customs Act cannot be construed as one imposing an obligation upon the authorities to dispose of the goods. In contradistinction, Rule 15(3) of the Hazardous Wastes (Management and Handling) Rules imposes an obligation upon the importer and exporter to ship or dispose off the goods if they are hazardous. A right conferred under a statute has always to be understood as distinguished from a liability imposed under a statute.
40.Reason No: 5 In the first instance, the cargo in question came as part of a larger consignment imported admittedly by the second respondent from Evergreen Specialities Inc, USA. On the basis of the Bills of Entry filed by the second respondent, the goods were sought to be cleared. But after the Customs Authorities raised an alarm, a show cause notice dated 26.09.2005 was issued under Section 124 of the Customs Act. It was followed by a Note Order dated 07.10.2005 and an order-in-original dated 08.12.2005 passed by the fifth respondent. By the said order, the second respondent was directed to re-export the cargo. These orders were not challenged by the second respondent on the ground that they had withdrawn the two Bills of Entry. On the contrary, the second respondent complied with the said order and an export was made, though not to USA. Therefore, it is clear that the second respondent had no issue with being labeled as an importer in respect of the same cargo, when proceedings were taken under Section 124 of the Customs Act. Hence, the second respondent cannot now turn around and say that their role as an importer got extinguished with the re-export of the cargo to Ajman, UAE.
41.Therefore, for all the above reasons, I hold that the second respondent has a statutory obligation under Rule 15(3) of the rules to dispose of the cargo, if it is found to be hazardous. I make it clear that the question whether there is a contractual obligation for the second respondent towards the petitioner or anyone else is to be decided only in the civil suit.
42.Coming to the next question as to whether there had been a final determination of the hazardous nature of the goods, I find that pending the writ petition, the Commissioner of Customs arranged for an inspection of the cargo by the Central Pollution Control Board, in pursuance of an interim order passed. A Team of Officials of the Central Pollution Control Board inspected the containers, got 3 containers out of 35 containers opened in the presence of the Customs Authorities and examined the same and submitted a report on 31.05.2007. The observations and recommendations of the Central Pollution Control Board are extracted below for easy appreciation:
"Observations:
In context to the background and introduction, the observations recorded during the visit are summarized below:
(i) As on date, there are 35 containers (weighing approximately 875 MT) containing cargo imported under "mixed waste paper" category and reported lying since Nov. 2005 at the import terminal of port of Tuticorin, being operated by M/s.PSA Sical Terminal Ltd.
(ii) During the visit, three containers (bearing number CSVU 4053790, POCU 1161784 and CLHU 4628229) out of 35 were got opened, in presence of the Customs Authority, for inspection by the team, and, noticed that the cargo weighing approximately twenty five tons in each container is mixed with plastic bottle, jute rags, glass bottles, metal cans and house hold wastes, an identified category of garbage. Although, the consignment appears to be imported under the category B-3020 - Paper, Paper board and Paper product wastes falling under List B, Part-A Schedule 3 of Hazardous Waste (Management & Handling) Rules, 1989 and further amendments thereof, and as per the subsequent directions issued by the MEF Vide Office Memorandum No. 13-1/HSMD dated March 24, 2005 yet, the consignments containing such wastes do not meet specification mentioned in the aforesaid rules.
(iii)Further, the visual observation of the above consignments, during the visit suggests the following:
(a) Emitting less odour.
(b) Generating no leachate, but have signs of presence of 'spores' and 'colonies' of "microbes". However, requires thorough analysis of the representative samples of the consignments to know the exact composition, quality, type & nature of the wastes and to confirm the presence of any microbial toxins.
Recommendations:
(i) In view of the above observations and present conditions of the consignments, it shall be appropriate to deal the same in accordance to the Rule 15 of Hazardous Wastes (Management & Handling) Rules 2003, thereby, accounting the consignment as "Illegal Traffic."
(ii)In the event of the non-conforming to the recommendation (i) above, following course of action is suggested.
a) The consignments are required to be kept in one of the Custom bonded warehouses, provided with adequate roof and necessary lining (made of HDPE) on floor so as to avoid entry of rain water and to direct contact of wastes with the soil and ground water, respectively.
b) As directed by the Hon'ble High Court, Commissioner of Custom is to ensure that the proper care and necessary precautions need to be taken while transferring the container containing the wastes from the terminal of Tuticorin port to the Custom bonded warehouse.
c)In order to assess and estimate the composition and characteristics of the cargo, lying at Tuticorin port to facilitate suitable method of disposal, a Committee may be constituted drawing the experts from the organisations like IIT-Madras, NCL Pune, including the officials from CPCB, South Zonal Office, Bangalore, TNPCB, District Environmental Engineer Office, Tuticorin.
d)In case, the cargo, in question needs to be incinerated, Custom Authority shall ensure that the same is safely transported on land from port of Tuticorin to point of Incineration under supervision of expert team, needs to be formulated. Further, the Custom Authority shall also ensure that the total expenditure in disposing the cargo by incineration be borne by the importer in accordance to the rules under reference.
(iii)Further, it is also recommended that sincere attempts shall be made by the Custom Authority in order to re-export the consignment in accordance to the Rules 15(i) of Hazardous Wastes (Management & Handling) Rules 2003 as such the consignments have not yet been "off-loaded" and the suggestion made in para
(ii) above shall be opted as ultimate choice when no other option is available and should be restricted as one time measure only."
43.It is seen from the above that the Central Pollution Control Board was not averse to the idea of shifting the containers from the container terminal of the Tuticorin Port to the Customs Bonded Warehouse but they wanted the Customs Bonded Warehouse to have adequate roofing and necessary lining on the floor. However, it is admitted that even in the container terminal of the Port, there is no such roofing or lining on the floor provided for the containers. Therefore, I am of the considered view that the containers could be shifted, to a Customs Bonded Warehouse so as to mitigate the loss sustained by the petitioner, who is after all, neither the importer nor the exporter.
44.As seen from Recommendation No.(ii)(c) of the Central Pollution Control Board, the Board wanted to assess and estimate the composition and characteristics of the cargo for the purpose of arriving at a final conclusion so that a suitable method of disposal could be arrived at. Therefore, keeping in mind all the above, I am of the considered view that the writ petition could be disposed of permitting the petitioner to shift the 35 containers to a Private Bonded Warehouse, with adequate safeguards, for the purpose of final determination of the composition and characteristics of the cargo, to enable its eventual incineration or export.
45.Accordingly, the writ petition is disposed of with the following directions:
(a)The petitioner is permitted to shift the 35 containers in question to any one of the Customs Bonded Warehouses in Tuticorin at his own cost within a period two weeks, under the supervision of an Officer nominated by the fifth respondent.
(b)The Customs Bonded Warehouse to which the containers are shifted, shall be kept under the lock and key of an Officer nominated by the fifth respondent.
(c)If the petitioner or the second respondent is able to get 35 containers of the same size and description for hire, they shall be permitted by the fifth respondent to transfer the cargo from the containers in question to the newly hired containers, again under the supervision of the officials of the Commissionerate of Customs, as had been done at the time of re-export to Ajman, UAE. After such transfer, the petitioner may take away their empty containers.
(d) Within four weeks from this date, the fifth respondent shall have the cargo examined by the Team of Officials nominated by the Central Pollution Control Board for a final determination of the question as to whether the goods are hazardous in nature which could only be incinerated or disposed of otherwise. The cost of such examination shall be borne in the first instance by the second respondent.
(e)If after the examination of the cargo, the Central Pollution Control Board comes to a final determination that it is hazardous, then the second respondent shall have the cargo incinerated or re-exported back to Evergreen Specialities Inc, USA or to any one else in any other country. If the material is held by the Central Pollution Control Board to be either non-
hazardous or fit for disposal locally (though hazardous), the fifth respondent may permit the disposal of the cargo locally, subject however to the terms and conditions imposed by the Central Pollution Control Board. The incineration or re-export or local disposal shall be as recommended by the Pollution Control Board and it shall be at the cost of the second respondent, in the first instance. The second respondent shall carry out this obligation, as per the recommendation of the Pollution Control Board, within six weeks of submission of the report, by the Pollution Control Board.
(f) Till the time the cargo is re-exported or incinerated or disposed of locally, the petitioner shall bear the lease rental for the newly hired Customs Bonded Warehouse (to which it is shifted), as well as for the containers hired by them for the transfer of the cargo. It will be open to the petitioner to include this item of expenditure in the claim made by them in the Civil Court.
(g) The obligations carried out and the expenses incurred, by the petitioner or the second respondent or the fifth respondent in carrying out the above directions, shall be without prejudice to each other's rights agitated in the civil suit. No costs. Consequently, connected miscellaneous petitions are closed.
Sgl To
1.The Secretary, Union of India, Ministry of Finance, New Delhi.
2.The Vice President (Commercial) ITC Ltd (BR.SL.No.70) Mr.BVS Jogarao Divisional Head Quarters, 106, Sardar Patel Road, Secunderabed - 500 003 India.
3.Indev Shipping Services (Tuticorin) Pvt. Ltd., Customs House Agents, No.31, Kerecope Street, Tuticorin-628 001.
4.The Chairman, Tuticorin Port Trust, Harbour Road, Tuticorin.
5.The Commissioner of Customs, Office of the Commissioner of Customs, Customs House, New Harbour Estate, Tuticorin-4.
6.PSA Sical terminal Ltd., Port of Singapore Authorities, Operator of Tuticorin Port's Container Terminal Tuticorin Port, Tuticorin.