2021 (3) TMI 1376 - HC - Customs

Validity of Rule 2(vi)(a) of the Hazardous and Other Wastes (Management and Transboundary Movement) Amendment Rules, 2019 - Note-Import is permitted to units in Special Economic Zone (SEZ) and Export Oriented Units notified by the Central Government was omitted in Schedule VI against Basel No. B3010 in Column (2) - Basel No. B3010 pertaining to Solid Plastic Waste Polymethyl Methacrylate was omitted from Schedule-III, Part D of the Hazardous and Other Wastes (Management and Transboundary Movement) Amendment Rules, 2016. HELD THAT - In view of the amendment brought in the Rules, 2016, by notification dated 27-1-2021, the SEZ units and EOU units notified by the Central Government are permitted to use the raw materials against Basal No. B3010 in Schedule VI in the Rules, 2016. Though the petitioners have imported the materials prohibited by the Rules, 2019 the same were not put to use by the petitioners pursuant to the directions issued by this Court. The petitioners therefore, may approach the respondent authorities with an application to permit the petitioners to use the raw materials lying in the custody of the petitioners in view of the Rules, 2021 vide notification dated 27-1-2021. On receipt of such application, the respondent authorities are directed to permit the petitioners to use the raw materials which were imported by the petitioners and which were the subject matter of the petitions and such materials being kept separate unutilised by the petitioners as per the directions of this Court. The undertaking given by the petitioners before this Court is also discharged in view of the fact that now the petitioners can use such raw materials in SEZ units after the notification dated 27-1-2021. It is pertinent to note that Rules, 2016 are issued by the Ministry of Environment, Forest and Climate Change, Government of India and in view of the amendment in Rules, 2016 by Rules, 2019 by the said Ministry, the respondent authorities did not permit the petitioners to clear the goods for use. Now in view of the amendment brought by Rules, 2021 vide notification dated 27-1-2021, the petitioners are permitted to use such goods which are imported by it. Therefore, it cannot be said that though the goods were imported during the subsistence of Rules, 2019 cannot be used even after the petitioners are permitted to use in view of the change in policy of the Central Government with effect from 27-1-2021 - as the goods imported by the petitioners were never used in view of the directions of the Court, are now being permitted to be used by notification dated 27-1-2021, there is no need to restrain the petitioners from use of such raw materials which is otherwise permissible to be used. All the petitions are disposed of as having become infructuous with the direction to the respondent authorities to permit the petitioners to use the raw materials/goods which are kept unused pursuant to the directions issued by this Court on an application which may be made by the petitioners before the respondent authorities so as to remove the seal put up by the respondent authorities to enable the petitioners to use such goods.

Summary

Issues Involved:
1. Challenge to Rule 2(vi)(a) of the Hazardous and Other Wastes (Management and Transboundary Movement) Amendment Rules, 2019.
2. Permissibility of import of raw materials (virgin plastic waste and scrap) by SEZ units.
3. Impact of subsequent notification dated 27-1-2021 on the import and utilization of raw materials.
4. Directions for utilization of previously imported raw materials and discharge of undertakings.

Issue-Wise Detailed Analysis:

1. Challenge to Rule 2(vi)(a) of the Hazardous and Other Wastes (Management and Transboundary Movement) Amendment Rules, 2019:
The petitioners challenged Rule 2(vi)(a) of the 2019 Amendment Rules, which omitted the permission for SEZ and Export Oriented Units to import certain plastic wastes. They argued that this rule was ultra vires several sections of the Environment (Protection) Act, 1986, the SEZ Act, 2005, the SEZ Rules, 2006, and the Foreign Trade (Development and Regulation) Act, 1992, as well as Articles 14 and 19(1)(g) of the Constitution of India.

2. Permissibility of Import of Raw Materials by SEZ Units:
The petitioners, having licenses to import raw materials (new/virgin plastic scrap/waste) for their SEZ operations, faced objections from Customs authorities post the 2019 Amendment Rules. These authorities contended that such imports were no longer permitted even for SEZ units. The petitioners sought a writ of mandamus to declare their right to import such materials under their existing approvals and to direct Customs to allow the import and utilization of these materials.

3. Impact of Subsequent Notification Dated 27-1-2021:
A significant development occurred with the issuance of a new notification on 27-1-2021, which allowed the import of 'post-industrial or pre-consumer polyethylene wastes' and 'Polymethyl Methacrylate' for SEZ and Export Oriented Units. This notification effectively lifted the restrictions imposed by the 2019 Amendment Rules, permitting the petitioners to import and utilize these materials.

4. Directions for Utilization of Previously Imported Raw Materials and Discharge of Undertakings:
Following the 27-1-2021 notification, the petitioners moved applications seeking permission to use the raw materials that had been imported and were lying unused due to the court's directions. The court acknowledged the change in policy and directed the respondent authorities to permit the petitioners to use these raw materials. The court also discharged the undertakings given by the petitioners, noting that the materials were now freely importable and usable under the new rules.

Conclusion:
The court concluded that, given the subsequent notification dated 27-1-2021, the petitions had become infructuous. It directed the respondent authorities to allow the petitioners to use the previously imported raw materials and to remove any seals placed on these materials. The undertakings filed by the petitioners were also discharged. The court emphasized that the change in policy now permitted the use of these materials, which had been kept unused pursuant to its earlier directions.