2007 (9) TMI 493 - HC - Central Excise

Re-export of cargo - Whether there had been a final determination of the hazardous nature of the goods? - Excisability - Held that - 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. 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. 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. Within four weeks from this data, 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. 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. 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. 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.

Summary

Issues Involved:
1. Legality of the cargo's import and its classification as hazardous waste.
2. Responsibility for the disposal of the hazardous cargo.
3. Petitioner's claim for the release of their containers and compensation for incurred costs.

Detailed Analysis:

1. Legality of the Cargo's Import and Its Classification as Hazardous Waste:

The second respondent imported 1007 MTS of goods declared as waste paper in 40 containers from M/s. Evergreen Specialities Inc., USA. Upon examination, the Customs Department found contaminated municipal waste in the containers, which could not be cleared. The Commissioner of Customs issued a show-cause notice under Section 124 of the Customs Act, directing the re-export of the goods. The Central Pollution Control Board inspected the cargo and confirmed it contained municipal waste, recommending it be dealt with as "illegal traffic" under Rule 15 of the Hazardous Wastes (Management and Handling) Rules, 1989.

2. Responsibility for the Disposal of the Hazardous Cargo:

The second respondent withdrew the Bills of Entry and disowned the cargo, claiming it was a mistake by the exporter. The Customs Authorities directed the re-export of the cargo, which was sent to Ajman, UAE, but was rejected and returned to Tuticorin Port. The Customs Department and the second respondent disputed responsibility for the cargo's disposal. The court held that under Rule 15(3) of the Hazardous Wastes (Management and Handling) Rules, 1989, the second respondent, as the importer, had a statutory obligation to dispose of the cargo. The court emphasized that this obligation exists regardless of the second respondent's withdrawal of the Bills of Entry or the re-export attempt.

3. Petitioner's Claim for the Release of Their Containers and Compensation for Incurred Costs:

The petitioner, who provided containers for the re-export, faced demurrage charges as the cargo was returned and remained at Tuticorin Port. The petitioner sought a writ of mandamus to direct the respondents to de-stuff the cargo and release the empty containers. The court acknowledged the petitioner's predicament and the financial burden of demurrage charges. It directed the petitioner to shift the containers to a Customs Bonded Warehouse under supervision, allowing for the transfer of cargo to newly hired containers. The court ordered a final determination of the cargo's hazardous nature by the Central Pollution Control Board and mandated the second respondent to bear the costs and dispose of the cargo accordingly.

Conclusion:

The court ruled that the second respondent had a statutory obligation to dispose of the hazardous cargo under Rule 15(3) of the Hazardous Wastes (Management and Handling) Rules, 1989. The petitioner was permitted to shift the containers to mitigate losses, with the second respondent bearing the examination and disposal costs. The court's directions aimed to balance the petitioner's rights with the statutory obligations of the second respondent and the Customs Authorities.