2021 (10) TMI 311 - HC - Customs

Seeking release of imported consignment - 63 Metric Tons of Waste Paper-Old Book' - mutilation of goods, which are waste papers in the book form - Section 24 of the Customs Act - HELD THAT - Merely because the goods in question is in the form of books, may be a new book or old book, it cannot be stated that, it is only a book for different purpose to sell in the market and not to be used as a wastepaper for making the pulp in paper industry. In normal parlance, if a paper in the book form is not going to be utilised for any reading or reference purpose, and it is going to be utilised for waste paper purpose, eventhough if it is in a new book form or a brand new book form, that can only be treated as a wastepaper - Merely because, in the declaration or bill of entry or bill of lading, it is stated as a wastepaper, it cannot be stated that it is a mis-declaration, unless and until the Customs Department found it as a different item not going to be utilised as a wastepaper by making their own inspection or investigation without having any such declaration prior to the same. If the importer really imported the goods in question as brand new books for the purpose of selling it in the Indian market definitely, the worth of the goods would be multifold than what has been declared, that is, around 13,00,000/- rupees worth for the wastepaper, so such kind of valued goods cannot be volunteered by the petitioner to be mutilate, as that will be more loss to the petitioner than to pay the redemption fine as well as the customs duty even if ultimately the Customs Department found that it is a misdeclared good, therefore, it is to be confiscated with redemption right. This Court feel that the subsequent action to conduct an inspection on 08.07.2021, and a further inspection by a special team on 23.07.2021 followed by the seizure under mahazer, are all may be a unwarranted exercise, even if the goods in question, are to be treated only as books, they could have very well allowed the books to be mutilated for which the petitioner had already expressed his willingness on 03.07.2021 itself - merely because a seizure has been taken place, it cannot be stated that the adjudication has to go in the present case, and therefore at this juncture only provisional release under Section 110(A) alone is possible. In the considered opinion of this Court, in view of the peculiar facts and circumstances, where two important aspects has to be taken note of, one is that the petitioner itself is a paper manufacturing industry and it has been doing this kind of importing of waste paper in book form for several years from various countries, and secondly, the petitioner had volunteered to mutilate the same on 03.07.2021, that is, well before the goods reached the port - there shall be a direction to the respondents to consider the claim/request of the petitioner as per his request dated 03.07.2021, permitting the petitioner to denature or mutilate the goods in question, which has been imported. Petition disposed off.

Summary

Issues Involved:
1. Release of imported consignment of 'Waste Paper-Old Book.'
2. Alleged mis-declaration of goods by the petitioner.
3. Applicability of Section 24 of the Customs Act, 1962.
4. Seizure and adjudication process by the Customs Department.
5. Provisional release under Section 110(A) of the Customs Act.

Issue-wise Detailed Analysis:

1. Release of Imported Consignment:
The petitioner, a paper manufacturing company, sought a writ of mandamus to direct the respondents to release the imported consignment of 63 Metric Tons of 'Waste Paper-Old Book' under Bill of Entry No.4566679 dated 05.07.2021. Alternatively, the petitioner requested the release of the consignment after mutilating the contents under the supervision of the respondents as per Section 24 of the Customs Act, 1962.

2. Alleged Mis-declaration of Goods:
The Customs Department, after inspecting the goods on 08.07.2021 and 23.07.2021, found that the consignment contained brand new books rather than waste paper. This led to the seizure of the goods on the grounds of mis-declaration. The petitioner argued that the goods were imported for making paper pulp and had been declared as waste paper in book form. The petitioner had even offered to mutilate the goods if the Customs Department deemed it necessary.

3. Applicability of Section 24 of the Customs Act, 1962:
The petitioner had written to the Customs Department on 03.07.2021, stating that the goods were waste paper books meant for repulping and expressed willingness to denature or mutilate the goods as per Section 24 of the Customs Act. The court noted that the petitioner had a clear agreement with the supplier and had consistently imported such goods without any prior complaints of mis-declaration.

4. Seizure and Adjudication Process by the Customs Department:
The Customs Department argued that the goods were mis-declared and seized them under mahazer on 23.07.2021. They contended that the adjudication process, including issuing a show-cause notice and thorough investigation, was necessary to determine the true nature of the goods. The court, however, found that the petitioner had voluntarily offered to mutilate the goods before they reached the port, indicating no intent to mis-declare.

5. Provisional Release under Section 110(A) of the Customs Act:
The Customs Department suggested that the goods could only be released provisionally under Section 110(A) of the Customs Act. The court, however, differentiated this case from usual cases due to the petitioner's long-standing practice of importing waste paper and their voluntary offer to mutilate the goods. The court directed the respondents to consider the petitioner's request dated 03.07.2021 and permit the mutilation of the goods under Section 24 of the Customs Act, followed by their release.

Conclusion:
The court disposed of the writ petition by directing the Customs Department to allow the petitioner to denature or mutilate the goods as per their request dated 03.07.2021. The Customs Department was instructed to release the goods after mutilation, following the usual procedures for imposing applicable customs duty and other charges, within two weeks from the receipt of the court order. The court emphasized the unique circumstances of the case, including the petitioner's history of importing waste paper and their proactive stance, which justified a deviation from the usual adjudication process.