2022 (1) TMI 1185 - AT - Customs

Classification of imported goods - freely importable Waste Paper - to be classified under CTH 47079000 or otherwise? - reasons to justify seizure and confiscation of consignments importedor not - confiscation - penalty - HELD THAT - In the present case, the entire consignment of goods in question have been detained/seized on the basis that on visual inspection and in presence of 2 panchas on 30-01-2020, foul smell was coming out; that cargo was found wet and containing mud and filth; that traces of plastic bottle of floor cleaner, Corrugated Box, Craft Paper, putrefied material, plastic waste, empty cans of soft drink and packaged water, thermocol plates, old cloths are found in representative containers opened for examination. However, no actual quantification of such traces of plastics and other materials has been made in goods in question and there is no dispute that goods in question are predominantly waste paper imported by these Appellants. It is found that CTH 47079000 also covers unsorted waste and scrap. There is no whisper by Revenue against fact of waste papers pre-dominantly contained in whole consignment of goods in question. Having not disputed this factual position by Revenue, seizure/confiscation of consignment is not justified. It is also settled law that entire consignment cannot be seized/confiscated on unjustified assumptions and presumption and in absence of evidences. In the facts of this case, revenue has not adduced clinching evidences to justify seizure and confiscation of consignments imported by these Appellants. This being case of appreciation of facts, there is no need to go into the case laws relied upon by the Appellants. Authorities have not considered facts and have not given judicious findings on the facts in these cases. The goods in question are not Municipal Waste and hence provisions of Hazardous and Other Wastes (Management and Trans boundary Movement) Rules, 2016 are not applicable in absence of sufficient and clear evidences. There are no cogent reasons with clear evidences are adduced on record by Revenue for discarding pre-shipment inspection certificate in toto. In absence of any inculpatory statements and there being no deliberate mis-declaration on the part of Appellants, confiscation of goods, and penalty are not sustainable, in the facts of these cases - the appellants are admittedly engaged in the manufacture of craft paper and other paper products and the imported goods i.e. paper waste in question is meant for use as raw material in their production. On this fact also it cannot be alleged that appellant has not imported the paper waste and something else. The order for re-export of goods and imposition of penalty on all the Appellants deserves to be set aside - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Determination of liability for confiscation and imposition of penalty on imported Waste Paper under CTH 47079000.

Analysis:
1. Issue of Confiscation: The case revolved around whether the Waste Paper imported by the Appellants under CTH 47079000 was liable to confiscation under section 111(d), 111(m), and 111(i) of the Customs Act 1962. The goods were initially detained and seized based on findings of plastic traces, foul smell, wetness, mud, and various other materials. However, it was noted that the predominant quantity was waste paper, with no quantification of the other materials. The definition of "Municipal Waste" was examined, and it was found that the imported goods did not fit this category. The Appellants provided relevant documents, including pre-shipment inspection certificates and chemical analysis reports, supporting that the goods were waste papers. The Tribunal emphasized that the technical opinions in the pre-shipment inspection certificates, issued by approved certification agencies, were crucial and could not be disregarded without contrary independent evidence. As Revenue failed to provide sufficient evidence to justify the confiscation, the seizure was deemed unjustified.

2. Penalty Imposition: The Tribunal considered the Appellants' role as manufacturers of craft paper and their regular importation of waste paper for production. It was established that the imported paper waste was intended for use as raw material in their manufacturing process. This fact further supported the conclusion that the Appellants had indeed imported waste paper and not any other material. As a result, the order for re-export of goods and the imposition of penalties on the Appellants were set aside. The goods were permitted to be cleared for home consumption in accordance with the law.

3. Judicial Findings: The Tribunal highlighted that the Revenue authorities had not provided clear and sufficient evidence to justify the confiscation and penalties imposed on the Appellants. The lack of inculpatory statements and deliberate mis-declaration by the Appellants further weakened the case for confiscation and penalty. The Tribunal emphasized the importance of factual appreciation and the need for clear evidence to support such actions. Ultimately, the decision to allow the clearance of goods and set aside the penalties was based on the lack of compelling reasons and evidence provided by Revenue.

In conclusion, the Tribunal allowed the Appeals, setting aside the order for re-export and penalties, and permitted the clearance of the Waste Paper for home consumption, emphasizing the importance of factual evidence and the Appellants' legitimate importation of waste paper for manufacturing purposes.