As per case facts, M/s.Sripathi and M/s.Rajarajeswari imported goods declared as waste paper, which were subsequently found to be prohibited municipal solid waste. Adjudication orders were issued, confiscating the goods ...
No Acts & Articles mentioned in this case
2026:MHC:2215W.P.(MD)Nos.24097, 24098, 24099, 24101, 24102, 24103 and 24104 of 2024
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Date of Reserving the OrderDate of Pronouncing the Order
10.06.2026 19.06.2026
CORAM :
THE HONOURABLE MR. JUSTICE D.BHARATHA CHAKRAVARTHY
W.P.(MD)Nos.24097, 24098, 24099, 24101, 24102, 24103 and
24104 of 2024
and
W.M.P.(MD)Nos.20380 and 20381 of 2024
W.P.(MD)Nos.24097 to 24099 of 2024:-
M/s.Sripathi Paper and Boards Private Limited,
Represented by its Deputy General Manager – Purchase,
Shri.P.Jegatheesan,
Sukkiravarpatti, Sivakasi - 626 130. ... Petitioner in
W.P(MD)Nos.24097 to 24099 / 2024
Vs.
1.The Commissioner of Customs,
Custom House, New Harbour Estate,
Tuticorin - 628 004.
2.The Joint Commissioner of Customs,
Custom House, New Harbour Estate,
Tuticorin - 628 004.
3.The Deputy Director,
Directorate of Revenue Intelligence,
22/114, Celin Garden, Rochy Colony,
South Beach Road, Tuticorin - 628 001.
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W.P.(MD)Nos.24097, 24098, 24099, 24101, 24102, 24103 and 24104 of 2024
4.The Assistant Environment Engineer,
Tamil Nadu Pollution Control Board,
76, Anna Salai, Guindy, Chennai - 600 032.
5.M/s. Maerskline India Pvt. Ltd.,
Prestige Zackaria Metropolitan,
Block - A, 5
th
Floor,
Anna Salai, Chennai - 600 002.
6.M/s. A.L.S. Terminal Private Ltd.,
Harbour Express High Road,
Tuticorin.
7.The Director General of Foreign Trade,
New Delhi.
8.The Secretary to Government,
Ministry of Environment and Forests and Climate Change,
New Delhi.
(R7 and R8 are suo motu impleaded
order dated 05.06.2026] ... Respondents in
W.P(MD)Nos.24097 to 24099 / 2024
Prayer in W.P.(MD)No.24097 of 2024 : Writ Petition filed under Article 226 of
the Constitution of India, praying to issue a Writ of Certiorarified Mandamus,
calling for the records pertaining to the Order-in-Original-TUT-CUSTOM-PRV-
JC No.16/2024 dated 28.02.2024 and quash the same and further direct the
second respondent to permit re-export of goods covered under the Bill of Entry
No.8989516 dated 06.06.2022 to Dubai, United Arab Emirates or alternatively,
direct the second respondent to permit disposal of the subject goods in India for
recycling as per the relevant law in force.
Prayer in W.P.(MD)No.24098 of 2024 : Writ Petition filed under Article 226 of
the Constitution of India, praying to issue a Writ of Certiorarified Mandamus,
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W.P.(MD)Nos.24097, 24098, 24099, 24101, 24102, 24103 and 24104 of 2024
calling for the records directing the 1
st
, 2
nd
, and 3
rd
respondents to bear the
detention charges imposed by the fifth respondent with respect to the goods
covered by Bill of Entry No.8989516 dated 06.06.2022 so as to enable the
petitioner to dispose of the said goods in terms of Hazardous and other Wastes
(Management and Transboundary Movement) Rules, 2016 or alternatively direct
the 1
st
, 2
nd
and 3
rd
respondent to ensure the compliance of the detention waiver
certificate dated 20.05.2024 by the fifth respondent.
Prayer in W.P.(MD)No.24099 of 2024 : Writ Petition filed under Article 226 of
the Constitution of India, praying to issue a Writ of Mandamus, direct the first
respondent to take appropriate action against the fifth respondent for suspension
or revocation of the approval given to the fifth respondent as an authorized
carrier in terms of Regulation 11 to the Sea Cargo Manifest and Transhipment
Regulations, 2018.
For Petitioner in all the W.Ps. : Mr.Hari Radhakrishnan
For R1 to R3 in all the W.Ps. :Mr.R.Gowri Shankar
Senior Standing Counsel
For R4 in all the W.Ps. :Ms.Madhuri Donti Reddy
For R5 in all the W.Ps. :Mr.P.Giridharan
For R6 in all the W.Ps. :No Appearance
For R7 and R8 in all the W.Ps. :Mr.K.Govindarajan
Deputy Solicitor General
W.P.(MD)Nos.24101 to 24104 of 2024:-
M/s.Rajarajeswari Krafts Pvt. Ltd.,
Represented by its Director,
Shri R.Vijayakanth,
No.900 Kamak Road,
Sivakasi - 626 189. ... Petitioner in
W.P(MD)Nos.24101 to 24104 / 2024
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W.P.(MD)Nos.24097, 24098, 24099, 24101, 24102, 24103 and 24104 of 2024
Vs.
1.The Commissioner of Customs,
Custom House, New Harbour Estate,
Tuticorin - 628 004.
2.The Additional Commissioner of Customs,
Custom House, New Harbour Estate,
Tuticorin - 628 004.
3.The Joint Commissioner of Customs,
Custom House, New Harbour Estate,
Tuticorin - 628 004.
4.The Assistant Commissioner of Customs,
Custom House, New Harbour Estate,
Tuticorin - 628 004.
5.The Deputy Director,
Directorate of Revenue Intelligence,
22/114, Celin Garden, Rochy Colony,
South Beach Road, Tuticorin - 628 001.
6.M/s.A.S.Shippiing Agencies Pvt. Ltd.,
No. 4/47 B, Nallamalai Road,
South Silikkanpatti, Pudukkottai,
Tuticorin - 628 103.
7.M/s.Sical Multimodal and Rail Transport Ltd.,
1297/1, 2, 3A, 3B, Madurai Bye Pass Road,
Opp. SIPCOT Office,
Tuticorin - 628 101.
8.M/s.Prompt Terminal Pvt. Ltd.,
No.24/3, Ayyanadaipu, Maduri Bypass Road,
Tuticorin - 628 101.
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9.M/s.Maerskline India Pvt. Ltd.,
1
st
Floor, Manickam Tower,
Palayamkottai Road,
Tuticorin - 628 003.
10.The Director General of Foreign Trade,
New Delhi.
11.The Secretary to Government,
Ministry of Environment and Forests and Climate Change,
New Delhi.
(R10 and R11 are suo motu impleaded
order dated 05.06.2026] ... Respondents in
W.P(MD)Nos.24101 to 24104 / 2024
Prayer in W.P.(MD)No.24101 of 2024 : Writ Petition filed under Article 226 of
the Constitution of India, praying to issue a Writ of Certiorarified Mandamus,
calling for the records pertaining to the Order-in-Original-TUT-CUSTOMS-
PRV-JC No.70/2024 dated 26.06.2024 and corrigendum to the said order dated
09.07.2024 issued by the third respondent and quash the same and further direct
the third respondent to permit re-export of goods covered under the Bill of Entry
No.8852312 dated 27.05.2022, 8852339 dated 27.05.2022, 9436441 dated
06.07.2022 and 9448213 dated 07.07.2022 to Dubai, United Arab Emirates or
alternatively direct the third respondent to permit disposal of the subject goods in
India for recycling as per the relevant law in force.
Prayer in W.P.(MD)No.24102 of 2024 : Writ Petition filed under Article 226 of
the Constitution of India, praying to issue a Writ of Mandamus, directing the 1
st
,
2
nd
, 3
rd
and 4
th
respondents to bear the ground rental and container detention
charges imposed by the 6
th
, 7
th
, 8
th
and 9
th
respondents with respect to the goods
covered under Bill of Entry Nos.8852312 dated 27.05.2022, 8852339 dated
27.05.2022, 9436441 dated 06.07.2022 and 9448213 dated 07.07.2022, so as to
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enable the petitioner to dispose of the said goods in terms of Hazardous and
Other Wastes (Management and Transboundary Movement) Rules, 2016 or
alternatively direct the 1
st
, 2
nd
, 3
rd
and 4
th
respondents to ensure the compliance
of the demurrage and detention waiver certificate dated 12.07.2024 by the 6
th
, 7
th
,
8
th
and 9
th
respondents.
Prayer in W.P.(MD)No.24103 of 2024 : Writ Petition filed under Article 226 of
the Constitution of India, praying to issue a Writ of Mandamus, direct the first
respondent to take appropriate action against the 9
th
respondent for suspension or
revocation of the approval given to the 9
th
respondent as an authorized carrier in
terms of Regulation 11 to the Sea Cargo Manifest and Transhipment
Regulations, 2018.
Prayer in W.P.(MD)No.24104 of 2024 : Writ Petition filed under Article 226 of
the Constitution of India, praying to issue a Writ of Mandamus, direct the first
respondent to take appropriate action against the 6
th
, 7
th
and 8
th
respondents for
suspension or revocation of the approval given to the 6
th
, 7
th
and 8
th
respondents
as an authorized Customs Cargo Service Provider in terms of Regulation 12 to
the Handling of Cargo in Customs Areas Regulations, 2009.
For Petitioner in all the W.Ps. : Mr.Hari Radhakrishnan
For R1 to R5 in all the W.Ps. :Mr.R.Gowri Shankar
Senior Standing Counsel
For R6 & R8 in all the W.Ps. :No Appearance
For R7 in all the W.Ps. :Mr.S.Meeankshi Sundaram
For R9 in all the W.Ps. :Mr.P.Giridharan
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For R10 and R11 in all the W.Ps. :Mr.K.Govindarajan
Deputy Solicitor General
COMMON ORDER
All these writ petitions are interconnected and, therefore, taken up together
for disposal by this common order.
A. The Case of M/s.Sripathi:
2. M/s.Sripathi Paper and Boards Pvt. Ltd. (hereinafter referred to as
''M/s.Sripathi''), a company incorporated under the Companies Act, is engaged in
the manufacture of paper and paper boards. It imports waste paper in large
quantities from various countries under the authorisation issued by the Tamil
Nadu Pollution Control Board under the Hazardous and Other Wastes
(Management and Transboundary Movement) Rules, 2016.
3. In the course of its business, M/s.Sripathi placed a purchase order dated
12.03.2022 with M/s.Gallops, Canada, having its office in Ontario, Canada, for
the supply of Waste Paper – News & Pams. All relevant documents, including
the Commercial Invoice, Packing List, Exporter's Statement of Origin dated
16.04.2022, and the Pre-Shipment Inspection Certificate dated 13.04.2022,
described the goods as ''Waste Paper – News & Pams.''
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4. M/s.Sripathi filed Bill of Entry No. 8989516, dated 06.06.2022, for the
clearance of 121.970 metric tonnes of goods declared as Waste Paper – News &
Pams, imported through 5' * 40' containers. After the goods were unloaded at the
Container Freight Station (CFS) operated by M/s.A.L.S. Terminal Private
Limited, Tuticorin, the third respondent, namely, the Deputy Director,
Directorate of Revenue Intelligence, Tuticorin, inspected the consignment based
on information suggesting contravention of the provisions of the Customs Act,
1962.
5. On 20.06.2022, upon examination of the goods, it was found that all
five containers contained a mixture of municipal waste, including used PET
bottles, street sweepings, waste food paper and plastic parcels, broken glass
bottles, waste plastic and paper containers, and used soft-drink cans. Since the
import of municipal solid waste is prohibited under the Customs Act, 1962, read
with the Hazardous and Other Wastes (Management and Transboundary
Movement) Rules, 2016, the goods were detained under a Mahazar dated
20.06.2022. Thereafter, the five containers were handed over to the sixth
respondent for safe custody.
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6. The Tamil Nadu Pollution Control Board inspected the consignment
and submitted a report confirming that the cargo consisted of municipal solid
waste. Upon consideration of the said report and the inspection findings, the
goods were seized on 08.07.2022, and a Seizure Mahazar was drawn in the
presence of witnesses.
7. Subsequently, a show-cause notice under Section 124 of the Customs
Act, 1962, was issued, calling upon M/s.Sripathi to explain why the seized goods
should not be confiscated, why re-export should not be ordered, and why a
penalty should not be imposed. M/s.Sripathi submitted its final reply on
05.12.2023, stating that it had ordered only waste paper from Canada, expressing
its willingness to re-export the cargo, and requesting that the proceedings be
dropped.
8. After affording an opportunity of personal hearing, the adjudicating
authority concluded that M/s.Sripathi had failed to exercise due diligence and
that its plea of inadvertent import was untenable and appeared to have been
advanced solely to avoid legal consequences. Noting the importer's willingness
to re-export the goods and its acceptance of liability for penalty, the authority
ordered confiscation of the goods. Relying on O.M.No.13-1/2004-HSMD dated
11.05.2019, which prohibits the import of waste paper consignments containing
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municipal solid waste, the authority directed that the consignment be re-exported
to the exporting country at the importer's cost. A penalty was also imposed on
the petitioner.
9. Thereafter, by letter dated 07.03.2024, M/s.Sripathi wrote to its
supplier, M/s.Gallops, Canada, informing it that the Government of India had
seized the goods and ordered their re-export, and seeking its consent to take back
the consignment. In the said communication, M/s.Sripathi stated that it was
aware of M/s.Gallops' commitment to environmental protection and believed that
the dispatch of a consignment mixed with municipal and plastic waste was not
intentional but had occurred due to oversight. It requested the supplier to accept
the return of all five containers.
10. In reply, M/s.Gallops Waste Management Inc., by communication
dated 11.03.2024, conveyed its consent to receive the goods back. On
05.04.2024, M/s.Sripathi and the person in charge accepted the adjudication
order and paid the prescribed penalty.
11. Thereafter, by representation dated 16.05.2024, addressed to the
Assistant Director, Directorate of Revenue Intelligence, M/s.Sripathi stated that
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there had been an approximately six-month delay in issuing the show-cause
notice, despite prompt cooperation on its part. It, therefore, requested the
authorities to exercise their powers under the Handling of Cargo in Customs
Areas Regulations, 2009, and the Sea Cargo Manifest and Transhipment
Regulations, 2018, and to direct the shipping liner to waive container detention
charges and the custodian to waive ground rent charges to facilitate re-export.
12. Further representations were subsequently submitted. On 20.05.2024,
the Assistant Commissioner, ALS (CFS), Custom House, Tuticorin, requested
M/s.A.L.S. Terminal Private Limited, the Container Freight Station, and
M/s.Maersk Line India Private Limited, the shipping liner, to consider the
importer's request and release the cargo without levying rent or demurrage for
the period during which the goods remained under detention pending re-export.
Accordingly, they were requested to waive demurrage and detention charges
from the date of detention.
13. Thereafter, by letter dated 22.05.2024, M/s.Sripathi informed the
Commissioner of Customs, Tuticorin, that it would not be possible to complete
the re-export within the stipulated ninety-day period, which was due to expire on
29.05.2024, and sought a thirty-day extension.
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14. It is further stated that, by communication dated 24.05.2024,
M/s.Gallops, while agreeing to accept the re-exported cargo, requested that the
consignment be delivered at Dubai. M/s.Sripathi accepted the said request on the
same day. It also addressed a detailed communication to the fifth respondent
shipping line, seeking its cooperation in the re-export process and requesting
confirmation of waiver of container detention charges.
15. By communication dated 27.05.2024, M/s.Sripathi requested the Joint
Commissioner of Customs (Exports), Tuticorin, to permit the filing of a shipping
bill for the re-export of the waste paper consignment to Dubai, UAE. On
28.05.2024, the Assistant Commissioner, Custom House, Tuticorin, extended the
waiver of container detention charges and CFS ground rent charges for an
additional thirty days. On 29.05.2024, the petitioner again sought permission to
re-export the consignment to Dubai, UAE.
16. However, in a communication dated 03.06.2024 addressed to the
Commissioner of Customs, Tuticorin, M/s.Sripathi contended that the
consignment could alternatively be disposed of by incineration or landfilling
after obtaining permission from the Tamil Nadu Pollution Control Board. It
further alleged that the adjudication order had been passed in violation of the
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applicable Rules and asserted that, in the absence of a waiver of container
detention charges, it could not be compelled to bear the financial burden. It
consequently threatened to abandon the consignment. Thereafter, the present writ
petitions were filed.
17. W.P.(MD)No.24097 of 2024 has been filed challenging the Order-in-
Original dated 28.02.2024 and seeking directions to permit the re-export of the
goods to Dubai, UAE, or, in the alternative, to direct the Joint Commissioner of
Customs, Tuticorin, to dispose of the goods within India through recycling in
accordance with the applicable statutory framework.
18. W.P.(MD)No.24098 of 2024 has been filed seeking a Writ of
Mandamus directing the Commissioner of Customs, the Joint Commissioner of
Customs, and the Deputy Director, Directorate of Revenue Intelligence, to bear
the detention charges imposed by the fifth respondent, namely M/s.Maersk Line
India Private Limited.
19. W.P.(MD)No.24099 of 2024 has been filed seeking a Writ of
Mandamus directing the competent authorities to take appropriate action against
the fifth respondent shipping line, including the suspension or revocation of its
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approval as an authorised carrier under Regulation 11 of the Sea Cargo Manifest
and Transhipment Regulations, 2018.
B. The Case of the Respondents:
20. The writ petitions are opposed by the respondents. Respondents 1 to 3
had filed a counter affidavit. According to them, during the course of the
investigation, the consignments were examined by the customs authorities as
well as the Tamil Nadu Pollution Control Board. Thereafter, the goods were
lawfully seized, and the Order-in-Original dated 28.02.2024 was passed strictly
in accordance with law.
21. The respondents contend that, under the Office Memoranda dated
11.05.2019 and 10.01.2023, any waste paper consignment found to contain
municipal solid waste or other contaminants must be re-exported to the exporting
country at the importer's cost. Reliance is also placed on Rule 15(2) of the
Hazardous Wastes (Management and Handling) Rules, 1989, which provides
that, in cases of illegal import of hazardous and other waste, the importer shall
re-export the waste at its own cost within ninety days of its arrival in India, and
that the concerned Port and Customs Authorities shall ensure compliance with
this requirement.
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22. It is further submitted that Rule 12 of the Hazardous and Other Wastes
(Management and Transboundary Movement) Rules, 2016, prohibits the import
of hazardous and other waste into India. Reference is also made to various
judicial pronouncements that mandate strict implementation of the statutory
framework and governmental policy governing hazardous waste imports.
23. The counter-affidavit further details the opportunities afforded to
M/s.Sripathi during the adjudication proceedings and sets out the various
adjournments granted at its request. On the foregoing grounds, the respondents
seek dismissal of the writ petitions.
24. The Tamil Nadu Pollution Control Board, the fourth respondent, has
also filed a counter-affidavit stating that the imported consignment appeared to
be municipal and hazardous waste. Following a joint inspection, it was
confirmed that the cargo contained plastic cans, beverage containers, plastic
carry bags, and other municipal solid waste components, though no putrefiable
organic matter was found.
25. The fifth respondent shipping liner has resisted the writ petitions,
contending that the petitioner is not entitled to a waiver of rental and container
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detention charges. According to them, the cargo's detention resulted solely from
the petitioner's misdeclaration and import of prohibited goods. It is, therefore, the
petitioner's responsibility to re-export the hazardous cargo and bear all
consequential rental and detention charges.
26. The shipping liner has also filed a memo stating that, as per the agreed
contractual rates, the total detention charges payable by M/s.Sripathi amount to
Rs.14,01,95,605/-, while those payable by M/s.Rajarajeswari Krafts Pvt. Ltd.
amounts to Rs.28,19,09,255/-. It has, however, expressed its willingness to waive
a total sum of Rs.38,21,04,860/- and has agreed to accept a consolidated amount
of Rs.4,00,00,000/- towards detention charges from M/s.Sripathi and
M/s.Rajarajeswari Krafts Pvt. Ltd.
C. The case of M/s.Rajarajeswari:
27. M/s.Rajarajeswari Krafts Pvt. Ltd., a company incorporated under the
provisions of the Companies Act (hereinafter referred to as ''M/s.Rajarajeswari"),
is engaged in the manufacture of kraft paper and, for that purpose, imports waste
paper in substantial quantities from various countries. It also possesses the
requisite authorisation from the Tamil Nadu Pollution Control Board under the
Hazardous and Other Wastes (Management and Transboundary Movement)
Rules, 2016.
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28. While so, M/s.Rajarajeswari imported goods described as "Waste
Paper – News & Pams" under Bill of Entry Nos.8852312 and 8852339, both
dated 27.05.2022, from M/s.Gallops, Canada. It further imported goods
described as "Waste Paper – ONP 6" under Bill of Entry Nos.9436441 dated
06.07.2022 and 9448213 dated 07.07.2022 from M/s. Exim Routes Inc., USA,
and M/s.Exim Routes Pte. Ltd., Singapore, respectively.
29. When the consignments were off-loaded at the sixth respondent's
Container Freight Station, they were detained under separate Detention
Mahazars. Upon opening the containers and conducting a visual examination of
certain compressed bales, the authorities found that the consignments contained
municipal solid waste, including used PET bottles, street sweepings, waste food-
paper and plastic parcels, broken glass bottles, waste plastic and paper
containers, waste soft-drink cans, and similar materials. The representative of
M/s.Rajarajeswari also admitted that the consignments contained municipal
waste. Accordingly, four separate Detention Mahazars were drawn in respect of
the four consignments. Thereafter, Seizure Mahazars and related memoranda
were issued from 08.07.2022 onwards.
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30. Subsequently, a show cause notice dated 04.01.2023 was issued,
alleging that an inspection of the imported consignments covered by the
aforesaid Bills of Entry revealed the presence of municipal solid waste, and that
the inspection report of the Tamil Nadu Pollution Control Board had also
confirmed the same. The show cause notice further referred to the statements
recorded from the persons concerned and called upon the Company and the
individuals responsible to explain why the goods imported under the four Bills of
Entry, collectively valued at Rs.48,59,118/-, should not be confiscated and
ordered to be re-exported, and why penalties should not be imposed upon them.
31. Upon consideration of the explanations submitted and the materials on
record, the adjudicating authority concluded that the petitioner had knowingly
arranged for the import of waste-paper consignments containing municipal solid
waste, which were irrelevant to its manufacturing activities, with a view to
deriving monetary benefit. It was further concluded that the consignments had
been misdeclared and that, but for the intervention of the authorities, the modus
operandi would have remained undetected. Consequently, by the Order-in-
Original, the entire consignment valued at Rs.48,59,118/- was ordered to be
confiscated and re-exported to the port of origin. A penalty of Rs.5,00,000/- was
imposed on the Company, while lesser penalties were imposed on the individuals
involved.
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32. Thereafter, M/s.Rajarajeswari addressed a communication dated
04.07.2024 to the Commissioner of Customs, seeking appropriate directions to
the custodians and the shipping liner for waiver of rental and detention charges.
On the same date, the Company also addressed communications to M/s.Gallops,
Canada; M/s. Exim Routes Inc., USA; and M/s. Exim Routes Pte. Ltd.,
Singapore, expressing appreciation for their commitment to environmental
protection and stating that the dispatch of the impugned consignments might
have occurred inadvertently, not intentionally.
33. On 05.07.2024, M/s.Rajarajeswari addressed a representation to the
Assistant Commissioner of Customs (Exports) seeking permission to re-export
the consignments. Thereafter, by communications dated 09.07.2024, M/s.Gallops
Waste Management Inc., Canada, agreed to receive the goods back but requested
that they be re-exported to Jebel Ali Port, Dubai. Similar communications,
containing substantially identical wording, were also received from M/s.Exim
Routes Inc., USA, and M/s.Exim Routes Pte. Ltd., Singapore.
34. On 12.07.2024, M/s.Rajarajeswari requested the shipping liner to
confirm the waiver of container detention charges. On the same day, the Deputy
Commissioner of Customs directed the Container Freight Station to note the
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exporter's communication and further directed that no rent or demurrage be
collected in respect of the detained and confiscated goods until completion of the
re-export process.
35. Subsequently, on 16.07.2024, M/s.Rajarajeswari submitted a further
representation seeking permission to re-export the goods to Dubai. On
18.07.2024, it again approached the Commissioner of Customs, requesting a
waiver of container detention charges, storage charges and other incidental
expenses. By communication dated 23.07.2024, the shipping liner, namely, the
ninth respondent herein, informed the petitioner that, as there was no fault
attributable to it, the request for waiver could not be acceded to. On 24.07.2024,
the petitioner also approached the Container Freight Station seeking a waiver of
the charges. Thereafter, the present writ petitions were filed.
36. W.P.(MD)No.24101 of 2024 has been filed challenging the Order-in-
Original dated 26.06.2024 and the corrigendum issued thereto, and,
consequently, seeking permission to re-export the goods to Dubai, United Arab
Emirates, or, in the alternative, a direction to permit disposal of the goods within
India in accordance with the applicable Rules.
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37. W.P.(MD)No.24102 of 2024 has been filed seeking issuance of a Writ
of Mandamus directing the official respondents to bear the ground rent, container
detention charges and other charges levied by the shipping line and the
respective Container Freight Station, thereby enabling the petitioner to dispose
of the goods.
38. W.P.(MD)No.24103 of 2024 has been filed seeking a Writ of
Mandamus directing appropriate action against the ninth respondent, including
suspension or revocation of its approval as an authorised carrier under
Regulation 11 of the Sea Cargo Manifest and Transhipment Regulations, 2018.
39. W.P.(MD)No.24104 of 2024 has been filed seeking a direction to the
first respondent to take appropriate action against the respondents 6 to 8,
including suspension or revocation of the approvals granted to them as
authorised Customs Cargo Service Providers under Regulation 12 of the
Handling of Cargo in Customs Areas Regulations, 2009.
D. The Respondents' case :
40. Thus, it can be seen that the case of M/s.Sripathi and
M/s.Rajarajeswari are identical. Even the communications are verbatim similar.
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The respondents have filed their respective counter-affidavits. The stand taken
by them is substantially on the same lines as that adopted in the case relating to
M/s.Sripathi and, therefore, the same is not repeated.
E. The Arguments:
41. Mr.Hari Radhakrishnan, learned counsel appearing for the petitioners,
would submit that the consignments were seized on the ground that they
contained recyclable municipal solid waste. Upon adjudication, while ordering
the confiscation of the goods, the adjudicating authority nevertheless permitted
their re-export and also issued certificates directing the waiver of detention and
demurrage charges in terms of Regulation 6(1)(l) of the Handling of Cargo in
Customs Areas Regulations, 2009 (HCCAR), and Regulation 10(1) of the Sea
Cargo Manifest and Transhipment Regulations, 2018 (SCMTR).
42. According to the learned counsel, when the petitioners sought
permission to re-export the goods to Dubai instead of the countries of export,
namely, Canada and the United States of America, on the ground that the cost of
transportation to Dubai would be substantially lower and that the foreign
suppliers themselves had advised such re-export, neither the Customs
Department granted the necessary permission nor did the shipping liner act upon
the directions issued by the Department regarding waiver of detention charges.
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43. The learned counsel relied on Rule 15(2) of the Hazardous and Other
Wastes (Management and Transboundary Movement) Rules, 2016. Referring to
the provisions governing illegal traffic in hazardous and other wastes, he
contended that waste imported without the requisite permissions must either be
re-exported at the importer's cost within ninety days or be disposed of by the Port
or Customs authorities after obtaining the necessary approvals from the
concerned State Pollution Control Board. According to him, the Rule does not
restrict re-export to the country of export and does not prohibit re-export to a
third country.
44. In support of the said submission, the learned counsel relied upon the
judgment of the Kerala High Court in M/s.Hassoun Manufactures India Pvt.
Ltd. v. The Commissioner of Customs
1
, wherein it was held that there is no
statutory prohibition preventing an importer from re-exporting hazardous goods
to a country other than the one from which they were originally imported.
45. With regard to the alternative prayer seeking permission to dispose of
the consignments within India, the learned counsel submitted that such a course
is permissible under the Office Memorandum dated 10.01.2023. According to
him, the petitioners are willing to pay 25% of the assessed value of the imported
1 W.P.(C) No.13174 of 2018, dated 21.06.2018
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consignments, and the goods may be disposed of through cement kilns for co-
processing or utilised for energy generation in waste-to-energy plants, in
accordance with the applicable guidelines.
46. The learned counsel also relied on the decisions of the Customs,
Excise and Service Tax Appellate Tribunal, Kolkata, in Uniglobal Paper Pvt.
Ltd. v. Commissioner of Customs (Port), Kolkata
2
and Krishna Tissue Pvt.
Ltd. v. Commissioner of Customs (Port), Kolkata
3
.
47. The learned counsel further contended that the detention and
demurrage waiver certificates issued by the Customs Department are legally
binding on the shipping lines as well as the Container Freight Station operators,
by virtue of Regulation 6(1)(l) of the HCCAR and Regulation 10(1) of the
SCMTR. According to him, in the absence of any challenge to the said waiver
certificates by the shipping lines or the Container Freight Station operators, they
are bound to honour them and cannot insist on payment of detention, demurrage
or storage charges contrary to the directions issued by the Customs authorities.
2 2024 (18) Centax 438
3 2024 (19) Centax 199
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48. The learned counsel also drew the attention of this Court to Report No.
16 of 2018 of the Comptroller and Auditor General of India titled "Performance
Audit of Working of Inland Container Depots and Container Freight Stations".
Referring to the findings contained therein, he submitted that as many as 469
containers containing hazardous waste had remained abandoned in Inland
Container Depots and Container Freight Stations for periods ranging from one to
seventeen years. He would further submit that, in the present case, the
adjudication proceedings were concluded only after a delay of nearly nineteen
months, resulting in substantial accumulation of detention, demurrage and
storage charges. According to the learned counsel, this delay is attributable
entirely to the Customs Department and, therefore, the petitioners cannot be
made to suffer the financial consequences thereof. Consequently, it is contended
that any liability towards such charges, if at all payable, ought to be borne only
by the Department and not by the petitioners.
49. Mr.R.Gowri Shankar, learned Senior Standing Counsel appearing for
the Customs Department and the Directorate of Revenue Intelligence, would
submit that the counter affidavits contain a detailed chronology of events
demonstrating the progress of the proceedings. According to the learned Senior
Standing Counsel, a perusal of the said chronology would reveal that, at every
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material stage, the delay was attributable only to the petitioners, who repeatedly
sought extensions of time and adopted dilatory tactics. On the other hand, the
Customs authorities acted promptly and on a day-to-day basis in processing the
matter.
50. The learned Senior Standing Counsel would further contend that the
correspondence exchanged during the course of the adjudication proceedings
clearly establishes that the petitioners had agreed to re-export the consignments
to the port of origin and had sought leniency in the matter of punishment. It is
submitted that, after the adjudication order was passed, the petitioners have been
attempting to protract the proceedings by adopting one course or another with a
view to avoiding compliance with the order.
51. According to the respondents, the present case involves a deliberate
misdeclaration of goods and an attempt, with the active connivance of the
petitioners, to dump municipal solid waste within the territory of India. It is
further submitted that on a previous occasion, when an attempt was made to
route the consignments to Dubai, the authorities in Dubai had also declined to
accept the goods. In such circumstances, it is contended that permitting the re-
export of the consignments to Dubai would neither be proper nor justified.
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52. The learned Senior Standing Counsel would submit that the goods in
question constitute prohibited goods and, therefore, neither their destruction nor
their disposal within India can be permitted. According to him, the Office
Memorandum relied upon by the petitioners has no application to the facts of the
present case. As regards the waiver of demurrage, detention and related charges,
it is fairly conceded that certain communications were initially issued by the
Customs authorities. However, it is contended that the subsequent accumulation
of charges is entirely attributable to the conduct of the petitioners, who failed to
take timely steps to complete the re-export process.
53. The learned Senior Standing Counsel would further rely on the
judgment of the Division Bench of this Court in M/s.K.Steamship Agencies
Pvt. Ltd. v. M/s.Balaji Dekors
4
. It is submitted that the Division Bench has
categorically held that a detention and demurrage waiver certificate can be issued
by the Customs authorities only when the adjudication proceedings conclude in
favour of the importer without the imposition of any duty, fine or penalty. It is
further submitted that the Division Bench has held that where the importer is
found guilty of misdeclaration or any other violation attracting penal
consequences, the liability to pay detention, demurrage and allied charges
necessarily falls upon the importer. The learned Senior Standing Counsel would
4 W.A. No.1017 of 2017 etc. batch, dated 04.07.2024
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also point out that the Division Bench has observed that any waiver certificate
issued in favour of an importer found guilty of violations is legally unsustainable
and unenforceable. Therefore, according to him, the reliefs sought by the
petitioners regarding the waiver of detention and demurrage charges cannot be
granted.
54. Mr.K.Govindarajan, learned Deputy Solicitor General of India,
appearing on behalf of the Union of India, which was suo motu impleaded by
this Court, would submit that the Union Government shall make every endeavour
to take up the issue with the authorities of the respective exporting countries
through appropriate channels. It is further submitted that any direction issued by
this Court in that regard would be duly considered and acted upon by the
competent authorities.
55. Mr.P.Giridharan, learned counsel appearing on behalf of the shipping
liner, placing reliance upon the Memo filed before this Court, would submit that
the petitioners are legally liable to bear the entire detention and allied charges
accrued in respect of the subject consignments. However, taking into account the
peculiar facts and circumstances of the case, and considering that the aggregate
amount payable works out to Rs.42,21,04,860/-, the shipping line is willing, as a
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matter of concession, to waive a sum of Rs.38,21,04,860/-, provided the
petitioners collectively pay a sum of Rs.4,00,00,000/- towards full and final
settlement of the charges payable to the shipping line.
56. The learned counsel would further submit that, after giving effect to
the proposed waiver, the container detention charges are required to be paid by
the importers prior to the clearance and movement of the cargo. It is further
submitted that the freight charges required for the re-export of the consignments
from India to Canada shall be prepaid and borne by the petitioners in respect of
the containers imported by them. According to the learned counsel, a detailed
break-up of the charges payable for each container has also been furnished. It is
therefore submitted that the shipping liner is willing to undertake the re-export of
the cargo to the country of origin, subject to the petitioners accepting and
complying with the aforesaid conditions.
57. The learned counsel, apart from relying on the judgment of the
Division Bench of this Court in M/s.K.Steamship Agencies Pvt. Ltd. [cited
supra], also relied on the Delhi High Court's decision in Muscles Fusion FZE v.
Principal Commissioner of Customs (Import)
5
, particularly paragraph 26.
Reliance was also placed on the Delhi High Court's judgment in Global Impex
52017 (354) ELT 525 (Del.)
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and Others v. Manager, CELEBI
6
, particularly paragraphs 169 and 170, to
contend that the shipping line and cargo custodians are legally entitled to recover
detention, demurrage and related charges from the importer, and that such
liability cannot be avoided merely on account of the intervention of the Customs
authorities.
58. The learned counsel appearing on behalf of the Container Freight
Station would also make substantially similar submissions. According to the
learned counsel, the prolonged retention of the cargo is attributable primarily to
the conduct of the petitioners, who have continuously protracted the proceedings.
It is submitted that nearly four years have elapsed since the date of import and, in
such circumstances, there is neither any legal nor equitable basis for directing
waiver of the storage, detention or other charges accrued in respect of the
consignments.
59. I have considered the rival submissions advanced on either side and
carefully perused the materials available on record.
F. Issue No.1 - Validity of Orders-in-Original:
60. The first issue that arises for consideration in the present batch of cases
is whether the respective Orders-in-Original dated 28.02.2024 and 26.06.2024
are liable to be interfered with and set aside.
6 2019 SCC OnLine Del 11918
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61. Though such a relief has been sought in the writ petitions filed on
behalf of both the petitioners, no substantial arguments were advanced during the
course of the hearing challenging the validity of the adjudication orders. On the
contrary, the materials placed before this Court reveal that, during the course of
the adjudication proceedings as well as thereafter, both the Companies and their
representatives had accepted the findings recorded by the adjudicating authority
and had merely sought leniency in the matter of punishment. Even in the enquiry,
they admitted the illegality, submitted that it was unintentional, and pleaded for a
lesser penalty. They had also undertaken to comply with the orders proposed to
be passed, including payment of the penalty.
62. Taking into consideration the representations made by the petitioners,
the adjudicating authority appears to have adopted a lenient approach and
imposed only a modest penalty. Pursuant thereto, both the petitioners as well as
the individuals concerned have paid the penalties imposed upon them. At no
point in time did they challenge either the factual findings or the conclusions
arrived at by the adjudicating authority.
63. It is also pertinent to note that an effective statutory remedy of appeal
is available against the Orders-in-Original under Section 128 of the Customs
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Act, 1962. Admittedly, neither of the petitioners has chosen to avail such a
remedy. Having allowed the adjudication orders to attain finality, the petitioners
have approached this Court only in September 2024, after seeking permission to
re-export the goods to Dubai and failing to secure the relief they sought. In such
circumstances, a belated challenge to the Orders-in-Original cannot be
countenanced.
64. Even otherwise, on a perusal of the records, this Court finds that the
adjudicating authority had issued detailed show cause notices, afforded adequate
opportunity to the petitioners, recorded statements of the concerned persons and
considered all the materials available on record before arriving at the conclusion
that the consignments had been misdeclared. The finding recorded is that the
case involves deliberate misdeclaration and not a mere inadvertent error. Based
on such findings, orders of confiscation, imposition of penalty and re-export of
the consignments were passed.
65. This Court does not find any infirmity, procedural irregularity or
jurisdictional error warranting interference with the said orders in exercise of its
writ jurisdiction. Accordingly, the Orders-in-Original dated 28.02.2024 and
26.06.2024 are held to be valid, and the challenge thereto stands rejected.
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G. Issue No.2 - Re-export to Dubai:
66. The next question that arises for consideration is whether the
petitioners can be permitted to re-export the goods to Dubai instead of the
countries of origin.
67. For a proper appreciation of the issue, Rule 15(2) of the Hazardous and
Other Wastes (Management and Transboundary Movement) Rules, 2016, is
extracted hereunder:
''15. Illegal traffic.-
(1) .....
(2) In case of illegal import of the hazardous or other waste, the
importer shall re-export the waste in question at his cost within a period
of ninety days from the date of its arrival into India and its
implementation will be ensured by the concerned Port and the Custom
authority. In case of disposal of such waste by the Port and Custom
authorities, they shall do so in accordance with these rules with the
permission of the Pollution Control Board of the State where the Port
exists.'' (Emphasis supplied)
68. A plain reading of Rule 15(2) makes it evident that the expression
employed by the Rule-making authority is "re-export". The significance of the
expression cannot be overlooked. What the petitioners had undertaken was the
import of the consignments into India. If the legislative intent had been to permit
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the consignments to be sent to any third country of the importer's choice, the
Rule would have employed the expression "export" and not "re-export". The
very use of the term "re-export" necessarily connotes the return of the waste to
the country from which they originated or from where they were exported to
India.
69. In the present case, the adjudicating authority has recorded a
categorical finding that the petitioners had imported consignments containing
municipal solid waste under the guise of waste paper. The finding is that the
petitioners had knowingly attempted to bring into India consignments containing
prohibited waste material. When the entities from the countries of origin and the
petitioners have jointly made an attempt to dispose of solid municipal waste,
having regard to the nature of the violation, it is the bounden obligation of the
petitioners and every one to ensure that the waste reaches back to the place of
origin and the offending consignments are sent back to the countries of origin,
namely, Canada and the United States of America, from where they were
exported.
70. There is yet another reason why the contention advanced by the
petitioners cannot be accepted. The Hazardous and Other Wastes (Management
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and Transboundary Movement) Rules, 2016, have been framed in furtherance of
India's international obligations arising under the Basel Convention on the
Control of Transboundary Movements of Hazardous Wastes and Their Disposal
(effective from 05.05.1992). The provisions of the Rules, therefore, have to be
interpreted in a manner consistent with the objectives and obligations embodied
in the Convention.
71. It is not in dispute that India, Canada, the United States of America
and the United Arab Emirates are all parties to, or are governed by, the
international framework regulating transboundary movement of hazardous and
other wastes. The fundamental object of the Convention is to prevent the
unlawful movement of hazardous waste and to ensure that responsibility for such
waste remains with the exporter and the State of export. Permitting a
consignment found to contain municipal solid waste to be diverted to a third
country merely because it may be economically advantageous to the importer
would run contrary to the spirit and object underlying the Convention as well as
the domestic Rules framed thereunder.
72. In this context, it would be relevant to refer to Article 9(2) of the Basel
Convention, which reads as follows:
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''9. Illegal Traffic.
1. .....
2. In case of a transboundary movement of hazardous wastes or other
wastes deemed to be illegal traffic as the result of conduct on the part of
the exporter or generator, the State of export shall ensure that the
wastes in question are:
a) taken back by the exporter or the generator or, if necessary, by
itself into the State of export, or, if impracticable,
b) are otherwise disposed of in accordance with the provisions of
this Convention,
within 30 days from the time the State of export has been informed about
the illegal traffic or such other period of time as States concerned may
agree.
To this end the Parties concerned shall not oppose, hinder or prevent
the return of those wastes to the State of export.'' (Emphasis Supplied)
73. A reading of the aforesaid provision makes it abundantly clear that, in
cases of illegal traffic, the waste is required to be taken back by or returned to the
State of export and not diverted to any third country. The obligation
contemplated under the Convention as well as the domestic Rules framed
thereunder is one of restitution to the exporting State, thereby ensuring that
responsibility for the unlawful transboundary movement of waste remains with
the exporter and the State of export.
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74. The Basel Convention was conceived with the avowed objective of
preventing the indiscriminate dumping of hazardous and other wastes by
developed nations in developing and economically vulnerable countries. The
Convention recognises the grave environmental, public health and ecological
consequences that may arise if such transboundary movements are left
unchecked. Its fundamental purpose is to ensure that countries generating such
waste remain accountable for its environmentally sound management and
disposal.
75. The phenomenon, often described as "waste colonialism", refers to the
practice whereby developed countries, either directly or through unscrupulous
exporters, seek to shift the burden of disposal of hazardous, toxic or other
undesirable waste to developing nations, thereby externalising the environmental
and social costs associated with such waste. Such practices not only undermine
environmental justice but also pose a serious threat to the ecological security and
public health of the receiving countries. Above all, it is a direct affront on the
very sovereignty of the country and as such rightly terms as 'colonialism'.
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76. The adverse consequences of such activities were noticed by a
Division Bench of this Court in ITC Ltd. v. Norasia Container Lines Ltd.
7
.
The observations made therein continue to hold relevance in the present context.
It would therefore be apposite to extract Paragraph 40 of the said judgment,
which reads as follows:
''40. It is really painful rather pathetic to note that the foreign
developed countries are searching for dumping yards to dump their
municipal waste and are dumping their municipal waste somehow or
other in the waters or soil of developing countries and thus are trying to
enjoy a pollution free surroundings in their countries. In the case on
hand, the appellant, instead of trying to secure the pollution free
environment in our country, by scrupulously following the instructions
given to them by the customs officials and the Pollution Control Board
are raising legally unsustainable grounds, only to escape the legal
liability of paying the amounts to the first respondent, which would not
be allowed to happen.''
77. The issue assumes greater significance when viewed in the backdrop
of the mounting challenges relating to solid waste management in India. It is
estimated that the country generates more than 1,70,000 tonnes of municipal
solid waste every day and is already grappling with the complex task of its
scientific collection, segregation, treatment and disposal. In such circumstances,
7 W.A.(MD)No.721 of 2007 and W.P.(MD)Nos.5989 and 5994 of 2008, decided
on 21.11.2008
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the nature of the business model projected by the petitioners warrants close
scrutiny. The petitioners claim to import waste paper from foreign countries at
considerable cost at a time when substantial quantities of recyclable waste paper
are readily available within the country. The facts as found by the adjudicating
authority raise serious concerns about whether the imports were, in reality,
intended to facilitate the entry and disposal of municipal solid waste in India
under the guise of waste paper consignments.
78. India has consistently adhered to its international obligations and has
remained committed to the principles underlying the Basel Convention, and
accordingly, the rules are framed. The wrongful acts of exporters situated in
foreign jurisdictions cannot furnish a justification for permitting the offending
consignments to be diverted to a third country in derogation of the obligations
arising under the Convention. The materials on record also indicate that on an
earlier occasion, when an attempt was made to route a similar consignment to
Dubai, the same was not accepted by the authorities there. Be that as it may,
neither principles of fairness (mwk; (Aram)) nor law would justify permitting
municipal solid waste, found to have been illegally imported into India, to be
diverted to another country merely on the prayer of the importers. It is cannot be
termed as a request or arrangement between the importer and its exporter, but a
conspiracy.
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79. Therefore, upon a conjoint reading of the provisions of the Hazardous
and Other Wastes (Management and Transboundary Movement) Rules, 2016 and
the obligations flowing from the Basel Convention, this Court is of the
considered view that the petitioners' request to re-export the consignments to
Dubai is legally untenable and cannot be countenanced. One illegality cannot be
rectified by facilitating another. Accordingly, the prayer seeking permission to
re-export the consignments to Dubai stands rejected.
H. Issue No.3 - Disposal of Waste within India:
80. The next question that arises for consideration is whether the
petitioners are entitled to seek permission for disposal of the goods within India.
81. At the outset, this Court finds the said prayer wholly misconceived.
The regulatory framework governing transboundary movement of hazardous and
other wastes has been devised precisely to prevent India from becoming a
destination for the disposal of waste generated elsewhere. The petitioners, in
effect, seek permission to retain within India consignments found to contain
municipal solid waste and thereafter channel them for disposal through cement
kilns, waste-to-energy facilities, or other authorised agencies. Such a course
would be fundamentally inconsistent with the object and purpose of the statutory
scheme banning the import of waste materials.
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82. In this regard, reliance has been placed by the petitioners upon the
Office Memorandum dated 10.01.2023. However, a careful reading of the said
Office Memorandum demonstrates that it specifically prohibits the presence of
biomedical waste, municipal solid waste, post-consumer domestic waste and
other impermissible contaminants in imported waste-paper consignments. The
relaxation contemplated under clause (vii) thereof applies only in respect of
permissible contaminants exceeding the prescribed threshold limits. The said
provision cannot be extended to categories of waste that are expressly prohibited.
Any such reading of the Office Memorandum would render it illegal and
violative of Rule 15(2) of the Hazardous and Other Wastes (Management and
Transboundary Movement) Rules, 2016, and, more importantly, the international
treaty obligations of our Nation.
83. Further, any such prayer to make this great country as the 'disposal
destination' should be held against not only the sovereignty of the Country but
would be offensive of the basic right to life of every citizen, the ecosystems of
this Country. The Hon’ble Supreme Court of India in State of Telangana and
others vs. Mohd. Abdul Qasim
8
has held that the environment and ecosystems of
this country are not just objects for protection but are subjects with fundamental
rights to exist, survive and thrive. Article 48-A obligates protection of
8 (2024) 6 SCC 461
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environment and biodiversity. Thus, such a prayer would run counter to every
declared tenants of legal policy and basic law, human rights and rights of every
living organism and ecosystem of our Nation and thus has to be declared as
opposed to public policy and illegal and should not be permitted. There could
have been aberrations in the past, but mistakes have to be corrected and cannot
be perpetuated.
84. It is also relevant to note that throughout the adjudication proceedings,
the petitioners had consistently agreed to re-export the consignments and had
sought only leniency in the matter of penalties. The records further indicate that
one of the petitioners, namely M/s.Sripathi, had earlier faced similar proceedings
and, upon detection of the violation, had re-exported the consignments in
compliance with the directions issued by the authorities. M/s.Rajarajeswari
imports municipal waste from different destinations simultaneously, which,
according to them, was imported innocuously.
85. Accordingly, this Court holds that the prayer seeking permission to
dispose of the consignments within India is contrary to the applicable statutory
provisions, inconsistent with the objectives of the Basel Convention and opposed
to the public policy. The said prayer is therefore rejected.
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I. Issue No.4: Charges payable to Container Freight Stations:
86. The next issue concerns the prayer made against the sixth respondent,
namely, M/s.A.L.S.Terminal Private Ltd., in W.P.(MD)Nos.24097 to 24099 of
2024, and the respondents 6 to 8 in W.P.(MD)Nos.24101 to 24104 of 2024,
namely, M/s.A.S.Shipping Agencies Private Ltd., M/s.Sical Multimodal Rail
Transport Ltd., and M/s.Prompt Terminals Private Ltd., which are the Container
Freight Stations where the containers are detained, seeking waiver of detention
charges/demurrage.
87. In this regard, it must be noted that the issue is no longer res integra.
The same was considered by the Hon'ble Division Bench of this Court in
K.Streamship Agencies Pvt. Ltd. [cited supra], and it is necessary to extract
Paragraphs 45(3), 45(5), and 45(6).
''45. On the basis of the above discussion and findings arrived at,
our conclusions are as follows:
(3) The waiver certificate can be issued by the Customs
authorities in cases the adjudication ends in favour of the
importer/exporter without imposition of any duty, fine or penalty either
by order of the adjudication or clarification or order of the court or
Tribunal.
…..
(5) In cases, where the importer/exporter is found guilty of
misdeclaration or of any other violation by import of prohibited goods
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or violation by import of restricted goods, the demurrage charges would
have to be paid.
(6) In cases where the adjudication is not in favour of the
importer/exporter and some action is taken, the authorities cannot issue
any waiver certificate and if such certificates have been issued despite
the fact that the importer/exporter is found to be guilty, the same are
invalid.''
Thus, it is abundantly clear that, if the adjudication ultimately ends against the
petitioners/importers, it is they who are liable to bear the charges. Even where a
waiver certificate has been issued, the same stands declared invalid. In view
thereof, although a waiver had been ordered for a certain period in the present
case, the said waiver has become invalid. Therefore, the petitioners are liable to
pay the detention/demurrage charges payable to the respective Container Freight
Stations.
88. However, considering the peculiar facts and circumstances of the
present case, it must be noted that, in law, solid municipal waste dumped into
India is required to be re-exported within 90 days from its arrival at the Port. In
the present case, the waste has remained at the Port since the year 2022 and has
continued to lie there for nearly four years. Therefore, while the petitioners
remain liable to pay the charges claimed by the Container Freight Stations, the
containers shall not be detained merely on account of non-payment of the
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charges. If the petitioners fail to pay the same, it is always open to the Container
Freight Stations to recover the amounts due in the manner known to law by
initiating appropriate recovery proceedings. They cannot retain municipal waste
in India to recover their dues. Everyone concerned has an obligation to see to it
that the containers are off the shores of India and also reach the ports of origin.
J. Issue No.5. Charges payable to the Shipping Liner:
89. The next issue is whether the liner, namely, M/s.Maersk Line India
Pvt. Ltd., arrayed as the fifth respondent in W.P.(MD)Nos.24097 to 24099 of
2024 and as the ninth respondent in W.P.(MD)Nos.24101 to 24104 of 2024, is
liable to waive the rental and detention charges relating to the containers.
90. In this regard, as stated supra, the law laid down in K.Streamship
Agencies Pvt. Ltd. [cited supra] would equally apply to the case of the liner,
and it is only the petitioners who are liable to bear such charges. It must be noted
that, apart from the Division Bench of this Court, other High Courts, including
the Delhi High Court, have consistently reiterated the same position in Trip
Communication Pvt. Ltd. v. Union of India
9
, Muscles Fusion FZE [cited
supra], and Global Impex and Others [cited supra].
9 2014 (302) ELT 321 (Del.)
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91. However, although the liner was not required to challenge the order
directing it to grant a waiver, since such a waiver stands declared invalid, the
peculiar and extraordinary circumstances prevailing in the present case deserve
consideration. Upon the insistence of this Court, the liner has filed a Memo
stating that it is willing to waive a substantial portion of the charges due to it.
The Memo records that upon both the petitioners jointly paying a total sum of
Rs.4,00,00,000/- in respect of all the containers, the liner shall not claim any
further or balance charges. The said Memo is accordingly recorded.
92. Therefore, notwithstanding the legal position, the said entity has
agreed to waive a substantial portion of the detention and related charges. The
liner has also expressed its willingness to carry the waste back to the port of
origin upon payment of the applicable freight charges. The petitioners are duty-
bound to pay the freight charges necessary for transporting the goods back to the
port of origin. It has also been insisted that the consignee shall undertake all
necessary steps to secure clearance at the discharge port and facilitate clearance
of the cargo in Canada. Since the petitioners are already in touch with their
respective suppliers, they shall make all necessary arrangements and take all
possible steps in that regard.
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93. Further, under Regulation 10(1)(g) of the Sea Cargo Manifest and
Transhipment Regulations, 2018, the authorised carrier is also responsible for the
re-export of hazardous goods. Therefore, the liner is under a statutory obligation
to ensure that the goods are exported back to the exporting country. For ready
reference, Regulation 10(1)(g) is extracted hereunder:
''10. Responsibilities of the authorised carrier under these
regulations. - (1) An authorised carrier shall
g. be responsible for re-export of hazardous goods where such
goods are ordered to be exported back to the exporting country;''
94. In view of the above, this issue is answered by holding that the
petitioners shall be liable to pay the freight charges as well as the sum of
Rs.4,00,00,000/- agreed to be paid to the liner, namely, M/s.Maersk Line India
Pvt. Ltd. on the conditions that are imposed by the Memo. In any event, the non-
payment cannot be ground to retain the goods in India. The freight charges back
to the port of destination has to be mandatorily paid by the petitioners.
K. Issue No.6 - Court's Duty to Analyse the Contributing Reasons and
General Directions:
95. This case presents a disturbing picture. As rightly described by
environmentalists as ''waste colonialism'', the dumping of solid municipal waste
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by developed countries into developing nations not only violates international
treaty obligations but also results in serious environmental degradation. Such
practices impose disproportionate environmental burdens upon developing
countries and undermine the principles underlying international environmental
governance.
96. The business model adopted by the petitioners in the present case also
raises serious concerns. It is undisputed that India generates a substantial amount
of solid waste every day, reportedly exceeding 1,70,000 tonnes. Further, waste
paper is abundantly available within the country. By way of illustration,
calculated at the prevailing exchange rate during the year 2022 when the imports
were made, the waste paper imported by M/s.Sripathi worked out to
approximately Rs.20/- per kilogram. Therefore, the very rationale for importing
the consignments in question becomes questionable.
97. The Orders-in-Original, while adjudicating the matter, have recorded
findings that the imports were made with the intention of securing illegal
clearance of the goods for unlawful gain. Be that as it may, once the adjudication
had concluded and the law mandated re-export within a period of 90 days, the
petitioners were bound to take immediate steps for re-export. Their failure to do
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so has resulted in the waste remaining within India's territory for several years.
The way in which M/s.Sripathi and M/s.Rajarejeswari, compliment and praise
their exporting counterparts for the egregious conduct reveals all. Further, it can
be seen that modus operandi is similar, even the communications are worded
identically and seem to be orchestrated.
98. Whenever any person imports solid municipal waste, or any other
pollutant waste, into India in contravention of the provisions of the Hazardous
and Other Wastes (Management and Transboundary Movement) Rules, 2016,
framed under the Environment (Protection) Act, 1986, the consequences
contemplated under the Act would follow. Section 15 of the Environment
(Protection) Act, 1986 provides for punishment with imprisonment for a term
which may extend to five years, or with fine, or with both, for violations of the
provisions of the Act, the Rules, or directions issued thereunder.
99. The Central Government, or any authority or person authorised by it,
has to initiate appropriate proceedings in accordance with Section 19 of the
Environment (Protection) Act, 1986 by filing a complaint before the competent
Court for prosecuting the company concerned and every person who, at the time
of the commission of the offence, was directly in charge of and responsible for
the conduct of its business.
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100. Considering the serious environmental consequences arising from
such violations, the competent authorities shall initiate appropriate prosecution
proceedings in deserving cases and in accordance with law. The purpose of such
action is to ensure the effective enforcement of environmental laws and to deter
the unlawful importation of waste into the country.
101. If any person knowingly designs, imports, or aids in importing and
throws trash on Bharath Matha, it is not just an offence under the Environment
Protection Act, 1985 alone, but it is a direct challenge to her sovereignty. There
cannot be a more aggravated form of deshdroh. When the right to life and self-
esteem of every citizen of the Country, living organism and eco systems is
involved, certainly it is an act endangering sovereignty. From the date of coming
into force of Bharatiya Nyaya Sanhita, 2023, the act amounts to an offence
punishable under under Section 152 of the Bharatiya Nyaya Sanhita, 2023. The
same is extracted hereunder for ready reference:
''152. Acts endangering sovereignty, unity and integrity of India.
Whoever, purposely or knowingly, by words, either spoken or
written, or by signs, or by visible representation, or by electronic
communication or by use of financial means, or otherwise, excites or
attempts to excite, secession or armed rebellion or subversive activities,
or encourages feelings of separatist activities or endangers sovereignty
or unity and integrity of India; or indulges in or commits any such act
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shall be punished with imprisonment for life or with imprisonment which
may extend to seven years, and shall also be liable to fine.
Explanation: Comments expressing disapprobation of the measures, or
administrative or other action of the Government with a view to obtain
their alteration by lawful means without exciting or attempting to excite
the activities referred to in this section do not constitute an offence
under this section''. (Emphasis supplied)
102. Thus, a careful reading of Section 152 of the Bharatiya Nyaya
Sanhita, 2023, shows that these dastardly acts amount to an offence. Whether the
facts of a particular case attract the provisions of Section 152 would necessarily
depend on the most important ingredient, namely, knowingly or purposely
endangering the sovereignty. If, upon investigation by the customs authorities,
the finding is that it was knowingly and purposely done, then prosecution should
be intimated by forwarding a complaint to the jurisdictional police. In the present
day scenario, unless prompt action is taking by way prosecution under the
Environment Protection Act, 1985 and Bharatiya Nyaya Sanhita, 2023, the
menace will continue unabated.
103. A report of the Comptroller and Auditor General of India titled
''Performance Audit of Working of Inland Container Depots and Container
Freight Stations'' (Report No.16 of 2018) had already highlighted the serious
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issue of containers carrying waste and other prohibited materials remaining
abandoned at Container Freight Stations. The report noted that 469 containers
had been left abandoned. The said findings demonstrate that the issue is neither
isolated nor recent. It appears that, apart from passing adjudication orders,
adequate proactive measures have not been undertaken to ensure timely removal
and re-export of such consignments. In matters of this nature, financial
considerations alone cannot be the determining factor. Even if expenditure is
required to be incurred, the authorities concerned must take all necessary steps to
ensure that such containers are removed from Indian ports and returned to their
ports of origin.
104. Further, the wording of the Office Memorandum in F.No.
23/107/2022-HSMD, dated 10.01.2023, issued by the Director (HSM Division),
Ministry of Environment, Forest and Climate Change, requires reconsideration.
The object of the international treaty obligations and the statutory rules framed
thereunder would be defeated if disposal of such solid municipal waste within
India is permitted in situations where re-export is otherwise mandated. As
already held by this Court, Clause (vii) is not applicable to Entry 50 in cases
where import of the goods themselves is not permissible. Therefore, the
Government of India shall consider incorporating specific and express provisions
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mandating the re-export of biomedical waste, municipal solid waste, post-
consumer domestic waste, and other prohibited waste streams not specifically
covered by the existing Office Memorandum, to the respective ports of origin.
105. Having regard to India's international treaty obligations, instances
involving exporters from foreign jurisdictions who repeatedly indulge in such
practices must also be taken up through appropriate diplomatic channels. The
issue may be raised during bilateral engagements through the concerned
Embassies and appropriate authorities of the exporting countries, with a request
that action be taken against such exporters in accordance with their domestic
laws. Wherever the existing international mechanisms permit, such issues shall
be promptly flagged through diplomatic channels immediately upon detection of
the offending consignments, so that effective remedial measures can be
undertaken.
106. Further, it was argued, by placing reliance on certain Research
Articles
10
, that even though a huge amount of solid waste is generated, not all
waste paper is segregated and made available to the industries that need waste
paper as raw materials for their products, which only leads towards the policy of
10Article published in the Quarterly Journal of Indian Pulp and Paper Technical Association [Vol.35, E3,
2023, P.88-94]
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W.P.(MD)Nos.24097, 24098, 24099, 24101, 24102, 24103 and 24104 of 2024
import. It is also contended that only because of the imports, the need is reduced,
resulting in non-segregation. Thus, it is a vicious cycle. We, as the citizens of
this country, have a bounden duty to source-segregate the solid wastes, and only
by a robust process of realisation that entire waste paper is available for these
recycling industries can the very import be given up. Thus, the Ministry of
Environment, Forest and Climate Change, the Director General of Foreign Trade,
and the concerned Ministry shall consider the issue of reframing the policy,
improve the segregation output of the wastepaper, prevent its burning, and
improve its availability for recycling.
L.The Result:
107. In view thereof, these Writ Petitions are disposed of on the following
terms:
(i) The prayers sought in W.P.(MD)Nos.24097 to 24099 of
2024 and W.P.(MD)Nos.24101 to 24104 of 2024 are devoid of merit
and are accordingly rejected;
(ii) The petitioners shall take all necessary steps to re-export
the goods and ensure that the same are re-exported within a period of
60 days from the date of receipt of a web-copy of this order.
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(iii) The Container Freight Stations, namely, the sixth
respondent in W.P.(MD)Nos.24097 to 24099 of 2024 and the
respondents 6 to 8 in W.P.(MD)Nos.24101 to 24104 of 2024, shall
be entitled to raise invoices and demand detention/demurrage
charges from the respective petitioners, and the petitioners shall
remain liable to pay the same. However, the process of re-export
shall not be obstructed on account of any dispute relating to such
charges, as the continued presence of the waste within the territory
of India poses a potential environmental risk. If the petitioners fail to
pay, they will be entitled to approach the appropriate fora for
recovery of the dues;
(iv) The petitioners shall ensure that the containers containing
the waste are re-exported to the respective ports of origin within a
period of 60 days as directed above. In the event of failure, from the
61
st
day onwards, the petitioners shall be liable to pay environmental
compensation at the rate of Rs.50,000/- each per day, applying the
Polluter Pays Principle, until the waste is re-exported. The said
compensation shall be recovered by the Tamil Nadu Pollution
Control Board by way appropriate proceedings;
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(v) The petitioners are jointly liable to pay the sum of
Rs.4,00,00,000/- and the further freight charges to the Shipping
Liner and de-hors any other disputes as may be between them, the
waste shall be re-exported and both sides will be entitled to raise a
dispute or approach the appropriate fora for their mutual claims, but
the same shall not result in stoppage of the re-export of the wastes;
(vi) If the re-export is not made within 60 days as above, the
duly authorised person as per the provisions and rules framed under
the Environment Protection Act, 1985 shall take such steps to file a
complaint and prosecute the petitioners and its directors and such
other persons responsible for the offence punishable under Section
19 of the Act.
(vii) The general observations made and directions issued
supra in the preceding paragraphs shall be considered by the
authorities concerned and appropriate action in that regard be taken.
(viii) The petitioners shall pay a costs of Rs.10,000/- each to
the first respondent. Consequently, the connected Miscellaneous
Petitions are closed.
19.06.2026
NCC : Yes
smn2
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To
1.The Commissioner of Customs,
Custom House, New Harbour Estate,
Tuticorin - 628 004.
2.The Joint Commissioner of Customs,
Custom House, New Harbour Estate,
Tuticorin - 628 004.
3.The Deputy Director,
Directorate of Revenue Intelligence,
22/114, Celin Garden, Rochy Colony,
South Beach Road, Tuticorin - 628 001.
4.The Assistant Environment Engineer,
Tamil Nadu Pollution Control Board,
76, Anna Salai, Guindy, Chennai - 600 032.
5.The Director General of Foreign Trade,
New Delhi.
6.The Secretary to Government,
Ministry of Environment and Forests and Climate Change,
New Delhi.
7.The Additional Commissioner of Customs,
Custom House, New Harbour Estate,
Tuticorin - 628 004.
8.The Assistant Commissioner of Customs,
Custom House, New Harbour Estate,
Tuticorin - 628 004.
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W.P.(MD)Nos.24097, 24098, 24099, 24101, 24102, 24103 and 24104 of 2024
D.BHARATHA CHAKRAVARTHY, J.
smn2
Pre-deliery common order in
W.P.(MD)Nos.24097, 24098, 24099, 24101, 24102, 24103 and 24104 of 2024
19.06.2026
Page No.58 of 58 https://www.mhc.tn.gov.in/judis
In a significant Madras High Court Ruling on Waste Import, a recent judgment addresses critical issues surrounding the illegal importation of municipal solid waste and highlights the stringent enforcement of environmental laws under the Environmental Protection Act 1986. This ruling, which has been closely watched by legal and environmental communities, firmly reiterates India's commitment to preventing 'waste colonialism' and underscores the severe consequences for entities attempting to exploit its territory for waste disposal. The detailed findings and directives from this case are readily accessible on CaseOn, providing a comprehensive resource for professionals and students alike.
The consolidated judgment pertains to a batch of writ petitions (W.P.(MD)Nos.24097, 24098, 24099, 24101, 24102, 24103 and 24104 of 2024), pronounced on June 19, 2026, by the Honourable Mr. Justice D.Bharatha Chakravarthy. The petitioners, M/s.Sripathi Paper and Boards Private Limited and M/s.Rajarajeswari Krafts Pvt. Ltd., sought various reliefs after their imported consignments, declared as waste paper, were found to contain municipal solid waste.
The Madras High Court addressed several key questions central to the illegal waste import controversy:
Whether the adjudication orders, which confiscated the goods and imposed penalties, were legally sound.
Whether the petitioners could be allowed to re-export the prohibited waste to a third country like Dubai, instead of the original exporting countries (Canada, USA, Singapore).
Whether the petitioners could be granted permission to dispose of the illegally imported waste within India, for instance, through cement kilns or waste-to-energy plants.
Who is responsible for paying the detention and demurrage charges levied by the Container Freight Stations where the consignments were held.
Who is responsible for paying the rental and detention charges demanded by the shipping lines.
The broader implications of such illegal imports, including the phenomenon of 'waste colonialism,' and the need for comprehensive governmental action.
The Court's decision was guided by a robust legal framework and established judicial precedents:
Specifically, Rule 15(2), which mandates re-export of illegally imported waste to the country of origin at the importer's cost within ninety days, or disposal by port/customs authorities with State Pollution Control Board permission.
An international treaty to which India, Canada, USA, and UAE are parties. Article 9(2) emphasizes that illegally trafficked waste must be taken back by the exporter or generator to the State of export.
Regulations governing the handling and re-export of goods, including hazardous materials. SCMTR Regulation 10(1)(g) states that an authorised carrier is responsible for re-exporting hazardous goods ordered back to the exporting country.
Sections related to the confiscation of goods (Section 124) and the availability of statutory appeal (Section 128).
Sections 15 and 19, which deal with penalties for contravention of rules and procedures for initiating prosecutions.
Section 152, relating to acts endangering India's sovereignty, unity, and integrity, which the Court considered applicable if the illegal waste import was knowingly or purposely carried out to endanger sovereignty.
The Court found no infirmity in the original adjudication orders. Petitioners had accepted the findings, sought leniency, and paid penalties without availing the statutory appeal remedy under the Customs Act. The finding of deliberate misdeclaration was thus deemed final.
The Court emphasized that the term "re-export" in Rule 15(2) of the Hazardous and Other Wastes Rules, 2016, specifically means returning the waste to its country of origin or export, not diverting it to a third country for economic advantage. Such diversion would violate the spirit and obligations of the Basel Convention, which aims to prevent unlawful transboundary movement of hazardous waste and ensure accountability of the exporting State. The Court noted that Dubai authorities had previously declined similar consignments, underscoring the potential for a 'conspiracy' rather than a legitimate arrangement.
The prayer to dispose of the waste within India was deemed "wholly misconceived." The Court stressed that allowing such disposal would fundamentally contradict India's policy and international obligations to prevent itself from becoming a dumping ground for waste generated elsewhere. The Office Memorandum dated 10.01.2023, cited by petitioners, was clarified to apply only to permissible contaminants exceeding threshold limits, not to expressly prohibited categories like municipal solid waste. The Court invoked the principle from State of Telangana and others vs. Mohd. Abdul Qasim, asserting that India's environment and ecosystems have fundamental rights, and importing waste constitutes an affront to national sovereignty and the basic right to life of its citizens.
For legal professionals analyzing the intricacies of these rulings, CaseOn.in offers invaluable 2-minute audio briefs, providing concise summaries and expert insights into complex judgments like this one, facilitating quick comprehension and strategic planning.
Relying on the Division Bench's decision in M/s.K.Steamship Agencies Pvt. Ltd., the Court ruled that since the petitioners were found guilty of misdeclaration and penalized, they are liable for all detention and demurrage charges. Any waiver certificates issued under such circumstances are invalid. However, recognizing that the waste had remained at the port for an extended period (since 2022), the Court directed that the re-export process should not be obstructed due to disputes over these charges. While CFSs can raise invoices and pursue recovery through legal fora, they cannot retain the waste in India. The shipping liner, Maerskline India Pvt. Ltd., despite the legal position, agreed to waive a substantial portion of the charges (Rs. 38,21,04,860/-) if the petitioners jointly paid a consolidated amount of Rs. 4,00,00,000/- as a final settlement. The petitioners are also mandated to cover the freight charges for transporting the waste back to its port of origin.
The Court expressed grave concern over "waste colonialism," describing the dumping of solid municipal waste into developing nations as a violation of international treaty obligations and an act undermining environmental governance. It questioned the petitioners' business model of importing waste paper when substantial quantities are available domestically, suggesting an intent for illegal clearance. The judgment directs competent authorities to initiate prosecution under Section 15 of the Environment Protection Act, 1986, and to consider charges under Section 152 of the Bharatiya Nyaya Sanhita, 2023, if the act of illegal import was performed knowingly or purposely to endanger India's sovereignty. Referencing a CAG Report (No.16 of 2018) on abandoned hazardous waste containers, the Court emphasized that financial considerations should not deter authorities from ensuring timely re-export. Furthermore, it called upon the Government of India to reconsider the wording of existing Office Memoranda and to engage through diplomatic channels with exporting countries to hold them accountable for their exporters' actions. Finally, it urged the Ministry of Environment, Forest and Climate Change and the Director General of Foreign Trade to reframe policies to improve domestic waste paper segregation and recycling to reduce import dependency.
The Madras High Court unequivocally rejected the petitioners' prayers to re-export municipal solid waste to Dubai or dispose of it within India. It upheld the validity of the adjudication orders, confirming the petitioners' liability for misdeclaration and the associated penalties. While the petitioners are held responsible for detention, demurrage, and freight charges, the Court mandated that the re-export process to the *ports of origin* must proceed without obstruction within 60 days. Failure to comply will result in a daily environmental compensation of Rs.50,000/- under the Polluter Pays Principle, recoverable by the Tamil Nadu Pollution Control Board, and potential prosecution under environmental laws, including the Environment Protection Act, 1986, and the Bharatiya Nyaya Sanhita, 2023. The Court also issued broad directives for the government to take proactive measures against 'waste colonialism,' enhance domestic waste management, and use diplomatic channels to address errant foreign exporters.
This judgment serves as a pivotal reference point for legal professionals and students specializing in environmental law, customs law, and international trade regulations. It provides a comprehensive analysis of the interplay between domestic legislation (Customs Act, Environment Protection Act, Hazardous and Other Wastes Rules) and international conventions like the Basel Convention. The Court's strong stance against 'waste colonialism' and its emphasis on national sovereignty in environmental matters set a significant precedent. Furthermore, the detailed discussion on the liability for logistics charges (detention, demurrage, freight), the invalidity of waiver certificates in cases of guilt, and the potential application of new criminal statutes like the Bharatiya Nyaya Sanhita, 2023, for environmental offenses makes this ruling an essential read for understanding evolving legal responsibilities and the robust judicial approach to environmental protection in India.
All information provided in this article is for informational purposes only and does not constitute legal advice. Readers should consult with a qualified legal professional for advice on specific legal issues.
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