TaxTMI 
TaxTMI 
2007 (9) TMI 493
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....fore, the Commissioner of Customs, who is the 5th respondent herein, issued a show cause notice dated 26-9-2005 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 27-9-2005 withdrawing the two Bills of Entry dated 13-9-2005 and 21-9-2005 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 29-9-2005 and submitted a report on 4-10-2005. Therefore, the Commissioner of Customs passed a Note Order on 7-10-2005 directing the importer ITC Ltd., namely, the second respondent h....
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..... 8. Heard Mr. 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. Yeshwanth, 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. l 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 19-4-2007, 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 preju....
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....t 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 ....
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.... early as on 26-9-2005, 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 13-9-2005 and 21-9-2005 in respect of the cargo in question, by their letter dated 27-9-2005; (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 c....
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....mental 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 o....
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....ement 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 transh....
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....e 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-loading subject to inability to comply with sub-rule 2(1) above [in accordance with the procedure laid down by the State Pollution Central 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 i....
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.... 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 pi....
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....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 obli....
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....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 26-9-2005 was issued under Section 124 of the Customs Act. It was followed by a Note Order dated 7-10-2005 and an order-in-original dated 8-12-2005 passed by t....
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....e 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-1, Schedule 3 of Hazardous Waste (Management and 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 and 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, i....
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.... 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) &nb....