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Gujarat High Court Case Information System
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SCA/12964/2009 8/ 8 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 12964 of 2009
With
SPECIAL
CIVIL APPLICATION No. 13003 of 2009
With
SPECIAL
CIVIL APPLICATION No. 13004 of 2009
With
SPECIAL
CIVIL APPLICATION No. 13005 of 2009
With
SPECIAL
CIVIL APPLICATION No. 13341 of 2009
To
SPECIAL
CIVIL APPLICATION No. 13345 of 2009
=========================================================
OSWAL
AGRICOMM PVT LTD - Petitioner(s)
Versus
UNION
OF INDIA & 3 - Respondent(s)
=========================================================
Appearance
:
M/S
THAKKAR ASSOC. for
Petitioner(s) : 1,
MR PS CHAMPANERI for Respondent(s) : 1 -
4.
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE KS JHAVERI
Date
: 13/01/2010
ORAL
ORDER
1. Draft amendment granted.
2. The petitioners herein have prayed for a declaration that the officials of respondent no.2 have no authority or competence to take any action against the petitioners having their units in the Kandla Special Economic Zone in view of the provisions of sections 21, 22, 51 and 53 of the Special Economic Zones Act, 2005 and the Rules; declaration that the respondent no.3 and respondent no.4 are the competent authorities for the purpose of regulating the imports/exports and/or other transactions relating to or concerning the units located in Kandla SEZ in view of the provisions of Special Economic Zones Act, 2005 and Special Economic Zones Rules, 2006; declaration that the action of the respondent no.2 and its officials in detaining the containers of the petitioners and other similarly placed persons in Kandla SEZ since 5 months, rendering 5000 workmen jobless since last 5 months and incurrring/paying demurrage and other charges in crores to the shipping companies in foreign exchange as being illegal, arbitrary and unjust and other related prayers.
3. The petitioners are private limited companies engaged in the business of recycling of plastic scrap into plastic granules and agglomerates and agro products at their units in the Kandla Special Economic Zone. According to the petitioners, they are governed by the provisions of The Special Economic Zones Act, 2005 read with The Special Economic Zones Rules, 2006. The respondent no.3 is the administrative head of the Special Economic Zones and the respondent no.4 is the office of the Custom based at KSEZ which is under the control of the respondent no.1.
4. The petitioners obtained consolidated approval from Gujarat Pollution Control Board (GPCB) under the provisions of Section 25 of the Water (Prevention and Control of Pollution) Act,1974, Section 21 of the Air (Prevention and Control of Pollution) Act, 1981 and authorisation under Rule 3[c] and 5[5] of the Hazardous Waste (Management and Handling) Rules, 1989, amendment Rules, 2000, amended Rules 2003 framed under the Environment (Protection) Act, 1986. The said approval is valid upto 2014.
5. The petitioners imported certain materials covering Bills of Entry. According to the petitioners the containers of the petitioners were detained though the laboratory reports as per applicable policy is positive by the officials of respondent no.2 who have no authority of law or competence to take any such action in respect of the imports made to KSEZ. The CIPET, Ahmedabad sent a report which is positive and it is stated that the sample may be considered as free from any kind of toxic/non-toxic contamination.
6. The petitioners made representation to the Commissioner of Customs, Kandla, stating that almost six weeks have passed and the goods were not cleared. The petitioners also pointed out that the factories of the petitioners are virtually closed for want of raw materials. The petitioners also relied upon the clean report from CIPET Laboratory, Ahmedabad and requested the authority to release the goods forthwith. It also appears that the office of respondent no.3 has made representation to the office of Commissioner of Customs, Kandla pointing out that the action by the Kandla Customs Officials is wholly without authority of law. However, no action was taken by the authority and therefore the present petitions have been filed.
7. At this stage it is required to be noted that the Government Notification dated 1.1.1997 pertaining to procedure related to Import of Plastic waste/scrap. Clause (vii) reads as under:
(vii) Before the clearance of the plastic waste/scrap, all imported consignments of such plastic scrap/waste shall be subjected to scrutiny and testing of sample. Custom authority shall for this purpose draw a sample and send the same to the nearest laboratory/office of the central institute of plastic engineering and technology (CIPET) with a view to having same analyzed and verified that such imported consignment, are in conformity with the description/definition as given in sub para (I) and (ii) above.
8. The petitioner has produced the Test Certificate issued by Central Institute of Plastic Engineering and Technology at Annexure-H (page
75). Clause [c] at page 75 specially says that it is Virgin .
This shows that nothing is adverse as per the test conducted by the Central Institute of Plastic Engineering and Technology. If the goods are in the category of recycle the test result would have shown the same as Recycle .
9. At this stage it is also required to reproduce paras 4.28 and 4.31 of the affidavit in reply filed by Deputy Commissioner of Customs, the respondent no.2 herein:
4.28 I say that the report of sample of plastic scrap/waste in CAPET Ahmedabad is doubtful and the report of the Kandla Customs Laboratory is contradictory. It is noticed that in many cases similar samples of plastic waste/scrap containing stickers/labels were tested at CIPET, Chennai for various parties and they have stated that the same are used ones. Whereas CIPET Ahmedabad has stated that the samples are virgin plastic waste. In fact, it has been admitted by the authorized persons of CIPET Ahmedabad that in the last 5 years, they haven ot given any adverse report for samples tested at their laboratory. As a matter of precautions, similar samples are being tested at other branch of CIPET and Customs House Laboratory, Kandla.
4.31 and 4.32 I say that prior to August 2009, the officers of the respondent no.2 were collecting samples of plastic waste/scrap for units in the KASEZ. However, Ministry of Commerce vide their instruction No.34 dated 31-08-2009 has stated that no agency can carry out inspection, search, seizure or investigation without approval of the D.C. of the Zone concerned. Coy of the said instruction dated 31-8-2009 of the Ministry of Commerce is anenxed herewith and marked as Annexure-V. Accordingly it was not possible to collect samples for various imported consignments in KASEZ...
10. Even in the report of CIPET, Chennai, there are no adverse remarks. Clause [b] produced at page 139 states as under:
[b] The LLDPE and LDPE/LLDPE bag cut pieces are found to be printed and some of them having stickers pasted on them. However, it does not give any clue whether the packing material is generated as waste during printing operation or otherwise except that the stickers pasted on them giving indication of their usage as stickers are normally affixed after packaging the product.
11. Even the Clause (5) thereof states as under:
Since the cut pieces do not have any contamination it will not generate any residue during recycling except the stickers and labels .
12. Affidavit in reply filed on behalf of the respondent nos.1 and 3. Para 9 thereof reads as under:
9. In reply to para 4.22 I state that Plastic Waste & scrap (non-hazardous) classified under ITC (HS) 39159090 is categorized as restricted item for import into India. However, by virtue of Rules 27(1) of the Rules, 2006 restricted goods can be imported into a Special Economic Zone. Plastic waste & scrap import in domestic tariff area is required to be regulated as per the public notice no.392/92-97 issued by the DGFT. After the enactment of SEZ Act, All Letters of Approval (LOA) issued by the office of the Development Commissioner to the plastic waste importing units in KASEZ carried a condition to comply with the provisions of the aforementioned Public Notice. Hence, the bills of Entry filed in this office under Rule 27/29 of SEZ Rules are passed provisionally subject to the compliance of the aforementioned Public Notice. Rule 27(10) provides for assessment on the basis of self declaration of all routine examination as restricted. The provisionally assessed Bills of entry are presented to customs officer at the port of import as per Rule 29(2)(b) and since the plastic scrap are imported in containers, the port customs transfer it to SEZ after verification of the Seal without customs escort as provided in Rule 28(2) & (5) read with Rule 29(2)(c). The customs authorities in KASEZ verify the seal and allow entry of the consignment as per Rule 29(2)(e) & (h). On arrival of the goods, the appraiser assign posting to the Preventive Officer (Authorized Officer) in terms of Rule 29(2)(e) & (h) and to draw representative samples in compliance of the Public Notice in question (which is made applicable in the letter of Approval). These samples are forwarded to the nearest CIPET Centre as provided in the Public Notice (in this case CIPET, Ahmedabad) and test report is received. If the said test report is in tune with the aforementioned Public Notice, the goods can be put to use and the Bill of Entry is also finally assessed. (Emphasis supplied)
13. The test report shows that the the goods are virgin . As stated hereinabove if the test report is in tune with the aforementioned public notice the goods can be put to use. Even the test report produced at page 139 states that it does not give any clue whether the packing material is generated as waste during printing operation or otherwise except that the stickers pasted on them giving indication of their usage as stickers are normally affixed after packaging the product.
14. In the case of Special Civil Application No.504 of 2008, a Division Bench of this Court held as under:
5. The learned senior advocate for the petitioner relied upon a decision of the Hon'ble the Apex Court in the matter of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai and others, reported in AIR, 1999 SC
22. The learned senior advocate for the petitioner invited attention of the Court to para 10 and 11 and thereafter, paras 17 to 21. The Court is of the opinion that the present authority issuing Show Cause Notice figures nowhere in the provisions of the SEZ Act. Therefore, prima facie, the Court is of the opinion that the authority has issued the Show Cause Notice without there being jurisdiction for issuance of such notice. The matter requires closer scrutiny. Hence Rule. Ad interim relief granted earlier to continue.
6. .....
The submission is prima facie, found to be not acceptable for the simple reason that after SEZ Act, 2005 coming into force wherein specific authorities are provided. The Court is of the opinion that the Customs authorities seems to have been rendered functus officio so far as the matter pertaining to the conduct of a unit situated in SEZ is concerned.
7. In view of the decision of the Hon'ble the Apex Court in the matter of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai (supra) until the authority issuing Show Cause Notice is able to satisfy the Court about its 'locus standi' and its jurisdiction, authority cannot be allowed to usurp the power to issue Show Cause Notice. Otherwise, the entire object and purpose of establishment of Special Economic Zone will stand frustrated.
15. In view of the above facts and circumstances of the case Rule returnable on 26th February 2009.
16. In the meantime ad interim relief is granted in terms of para 9(HH) subject to the compliance of all the provisions and subject to further orders by this court in respect of any duty or tax payable by the petitioners in case the petitions fail. Direct service is permitted.
[K.S.
JHAVERI, J.] mary Top