Whether used tyres imported by the importers be classified as “Hazardous Wastes?

Case:-COMMISSIONER OF CUSTOMS (IMPORTS), CHENNAI V/S V.S. GOVINDAN

Citation:- 2013(287) E.L.T. 161(Mad.)

Brief Facts: - The respondents in all the writ appeals have imported used tyres of different sizes from different countries across the globe and under bills of entry they claimed clearance of the goods for home consumption by paying necessary fee. But, the customs officials directed that the goods were to be examined by a Chartered Engineer. Accordingly, M/s. SGS India Private Limited, Chennai, who are the approved Chartered Engineer by the Government of India, Ministry of Commerce, inspected the consignments in the presence of Customs Appraiser and reported that the goods are used tyres and not reconditioned and not re-treaded and description found to tally with the invoice. Thereafter, the Additional Commissioner of Customs had taken up the case for adjudication and passed an order re-determining the value and confiscated the goods under Sections 111(d) and 111(m) of the Customs Act, but giving an option to redeem the goods on payment of fine under Section 125 of the Customs Act and also imposed penalty on the respondents under Section 112(a) of the Customs Act. According to the respondents, they have paid all the said sums and had requested the Deputy Commissioner of Customs (Docks) to release the goods. However, since the goods are not released, they have come forward to file the writ petitions praying to issue writs of Mandamus directing the authorities to release the goods. Along with the writ petitions, the importers have also filed Miscellaneous Petitions for the very same relief of directing the authorities to release the goods.
During the course of hearing before the learned single Judge, as certain doubts were raised by the Customs about the propriety of the inspection report of the Chartered Engineer M/s. S.G.S. India Private Limited, as agreed by both the parties, the learned single Judge had permitted the authorities to re-inspect the consignment of goods, and to file a report after such inspection. Accordingly, another authorized chartered engineer from the Inspectorate, Griffith India Private Limited, Chennai had inspected the goods in question on 15-4-2011 in the presence of the officials of the Directorate of Revenue Intelligence and in the presence of the representatives of the other parties concerned and had filed the inspection reports, dated 23-4-2011. According to the said report, as far as W.P. No. 8274 of 2011 (concerned with W.A. No. 930/2011) is concerned, it is found that the consignment consists of about 88% part-worn, re-treaded tyres, 8% re-usable tyres after re treading and 4% end of life tyres. In respect of W.P. No. 8512 of 2011 (concerned with W.A. No. 929/2011), it is found that the consignment consists of about 28% part-worn tyres and 72% re-usable tyres after re treading without any end of life tyres and in respect of W.P. No. 8372 of 2011 (concerned with W.A. No. 931/2011), it is found that the consignment consists of 92% part-worn tyres and 8% re-usable tyres after re-treading, without any end of life tyres. Considering the said report, the learned single Judge, directed the authorities to release, forthwith, the goods in question, further making it clear that the release of the goods in question would be subject to the further proceedings that may be initiated by the authorities, in accordance with the procedures established by law. It was also directed that the authorities shall consider the request of the imports for waiver of payment of demurrage, rent and detention charges, if any, in terms of Section 6(1) of the Handling of Cargo in Customs Areas Regulation, 2009, and pass appropriate orders thereon, on merits and in accordance with law. The customs officials against this order of the learned single Judge, filed these writ appeals.
During the course of arguments, the learned standing counsel appearing for the appellants/Customs would strenuously argue that the learned single Judge has not properly appreciated the report of the Inspectorate Griffith India Private Limited, who have opined that the imported tyres are six years old and that used tyres possible for re-treading only to a limited number of times and hence such re-treaded tyres, after their intended use, will add to the increase in overall volume of waste tyres and disposal of the same requires special environmental procedure as they fall under the category of ‘hazardous waste’. According to the learned standing counsel, the Hazardous Rules, 2008 will apply to the cases on hand and hence the importers be directed to re-export the used car tyres.

Appellant’s Contention: - The appellant contended that the Directorate of Revenue Intelligence received intelligence that old and used tyres imported by the petitioners through Chennai Port are being supplied to the reprocessing units located in Karnataka and Gujarat after cutting into pieces and since the report of the said Chartered Engineer does not appear to bring out the actual facts since it has omitted to consider the year of manufacture (though with respect to Apollo branded tyres even the month and year of manufacture were found to be explicitly mentioned in each of the tyres) and further some of the tyres were found to contain tubes in them, which was not at all mentioned in the said report, the imported tyres were seized under mahazars. According to the Customs authorities, in the event the imported tyres being found to be used pneumatic tyres either damaged or re treaded or having deep cuts or worn out, the same cannot find any use without resource recovery, recycling, reclamation and thereby would require specific licence issued by the Ministry of Environment upon satisfaction of the requirements thereto in terms of Serial No. B3140 of Schedule-B appended to the Hazardous Wastes (Management, Handling and Tran boundary Movement) Rules, 2009 and therefore, the imported tyres have to be construed as hazardous waste and their import cannot be allowed but to be sent back to the country from where the same were imported. It has also been stated that importing of used tyres by the importers is subject to various provisions of law governing the field and the guidelines issued for the import of the goods, based on the Basel convention on Trans boundary Movement of Hazardous Wastes and their disposal cannot override the specific provisions of the enactments, which are forming an integral part of municipal laws and if there is a conflict between the guidelines prevailing in the international arena and the procedures established by the statutes enacted by the Government of India, the provisions of local laws would prevail. It was also contended that the release of the imported tyres, without proper investigation, could result in the dumping of hazardous wastes in India, contrary to the laws in force, regulating the field. According to them, even if the customs authorities concerned had passed an order, on completion of the adjudication process, the importers cannot claim total immunity from such investigation by the Directorate of Revenue Intelligence only on the ground that the adjudication process had been completed and that they had paid the customs duty, the redemption fine and the penalty imposed by the authorities concerned.
Further they argue that the learned single Judge has not properly appreciated the report of the Inspectorate Griffith India Private Limited, who have opined that the imported tyres are six years old and that used tyres possible for re-treading only to a limited number of times and hence such re-treaded tyres, after their intended use, will add to the increase in overall volume of waste tyres and disposal of the same requires special environmental procedure as they fall under the category of ‘hazardous waste’. According to them, the Hazardous Rules, 2008 will apply to the cases on hand and hence the importers be directed to re-export the used car tyres.

Respondent’s Contention: - The respondent contended that the imported goods are not at all hazardous substances and that they have already paid the requisite duty and fee to the authorities concerned after the adjudication process. It has also been argued on their behalf that the order of adjudicating officer having not been challenged by the Department of Customs, it is not open for them to disobey the said orders. According to the importers, the learned single Judge has rightly assessed the entire issue in its proper perspective and has arrived at the conclusion of acceding their request and would pray to dismiss these writ appeals as devoid of merits.

Reasoning of Judgment: - The Hon’ble High Court held that though the learned single Judge, by the impugned common order dated 27-4-2011, has disposed of the Miscellaneous Petitions in all the three writ petitions, these writ appeals have been filed against the main writ petitions themselves as if they have been disposed of and even the registry has numbered the writ appeals. It has been verified that the W.P. Nos. 8274, 8372 and 8512 of 2011 are still pending. However, since the prayer in the writ petitions and the Miscellaneous Petitions filed therein are one and the same, they find that no purpose will be served by keeping the said writ petitions pending. Hence, even though those W.P. Nos. 8274, 8372 and 8512 of 2011 are not listed along with these writ appeals, this common judgment shall be deemed to dispose of those writ petitions also.
Further they have directed the Tamil Nadu Pollution Control to examine the goods and file a report before them. In due compliance of the same, the Pollution Control Board has examined the containers containing the goods and the District Environmental Engineer of the Tamil Nadu Pollution Control Board, Chennai District has submitted his report dated 19-10-2011 to the Member Secretary of the Tamil Nadu Pollution Control Board, which has been placed before them by the learned counsel appearing on either side. From the materials placed on record, they are able to assess that as per the United Nations Environmental Programme vis-à-vis Basel Convention regarding Pneumatic tyres, the lifetime of an original tyre casing must not exceed seven years. All the imported used tyres in these cases are 6+ years old and as per the reports available on record, these tyres cannot be made use of until and unless they are re-treaded and even after re-treading, they cannot be made use of for quite a long time. Therefore, naturally, these old tyres will shortly be a hazardous waste in our country. The Intelligence inputs submitted by the appellants that the old and used tyres imported by the respondents through Chennai Port are being supplied to the reprocessing units located in Karnataka and Gujarat after cutting into pieces also does not inspire us to support the case of the respondents/importers. The other ground urged by the respondents/importers is that their goods have been wrongly classified as hazardous waste by the Department. Admittedly, as discussed supra, the importers have imported old used tyres, whose further life span, even after re-treading, is very short as they cannot be used as such, given the wear and tear of the goods. The Honorable Apex Court in L.M.L Ltd. v. Commissioner of Customs [2010 (258) E.L.T. 321 (S.C.)], while dealing with scope of judicial review regarding classification of goods, has categorically held that ‘classification of goods’ involves technical and scientific evaluation and analysis. While holding so and further since no patent wrong was demonstrated regarding classification of particular product, the Honorable Apex Court has declined to interfere with the classification adopted by the authorities. Similar is the situation in the cases on hand. Though on the part of the importers it has been vehemently argued that their imported goods have been wrongly classified by the authorities, it has not been demonstrated by the importers before them as to how the authorities have committed error. In the teeth of the reports available on record and particularly in view of the fact that these imported old tyres are shortly going to be hazardous waste, they are unable to accept the reasonings offered by the learned single Judge in allowing the prayer of the importers. Even the other argument advanced on the part of the importers that the order of the adjudicating authority has not been challenged by the Customs, does not appeal to them, since the Department, having found the order of the adjudicating authority dated 8-3-2011 not correct, have taken up the matter with the Customs authorities for review, which they are empowered to do under law. For all the above reasons, these writ appeals filed by the Customs are allowed. The respondents/importers are directed to send back the imports to the countries of origin at their own cost and expenditure immediately. The appellants are directed to take all steps necessary in this regard. However, taking into consideration the fact that the respondents/importers have paid certain fee and other charges while claiming the goods, they direct the appellants to consider the requests of the respondents/importers for refund of any such fee or other charges they have paid for claiming the goods, as per rules, if any such request is made on behalf of the respondents/importers within two weeks of receipt of a copy of this order. The appellants shall pass speaking orders, after following due process of law, if any such request is made on the part of the respondents/importers within four weeks from the date of receipt of such a request from the respondents/importers.

Decision: - The appeal was allowed.

Conclusion:-The analogy drawn from this case is that even after finalization of the order of the adjudicating authority, goods can be re-classified in the facts and circumstances of a particular case that are also being covered under the various other laws.

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PJ/Case Laws/2012-13/1451

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