1998 (8) TMI 242 - AT - Customs

Summary

Issues:
Appeal against setting aside of Order-in-Original confiscating PVC Scrap under Section 111(d) of Custom Act, 1962. Interpretation of Paragraph 27(2) of Import Export Policy. Comparison of price for determining import nature - waste or scrap.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi challenged the setting aside of Order-in-Original confiscating PVC Scrap under Section 111(d) of Custom Act, 1962 by the Commissioner of Customs (Appeals), New Delhi. The Deputy Commissioner of Customs ICD, Tughlakabad, New Delhi had initially confiscated the consignment but allowed redemption upon payment of a fine and imposed a penalty. The appeal sought restoration of the original order. The Departmental Representative argued that plastic waste is covered by Paragraph 27(2) of the Import Export Policy, emphasizing the lower price of the imported material compared to prime grade PVC. The Respondent, however, contended that they imported PVC Flakes, supported by a technical opinion from the Indian Institute of Technology stating the flakes were in primary form and usable directly for various applications.

The Tribunal considered the arguments and referred to previous decisions to determine whether plastic scrap falls under Paragraph 27(2) of the Import Trade Control Handbook. The Deputy Collector's conclusion that scrap and waste are synonymous was challenged based on previous judgments. The Tribunal noted that the judgments cited by the Deputy Collector did not directly support the equivalence of plastic scrap and waste. In contrast, the Tribunal cited decisions where it was held that plastic scrap is not considered plastic waste under Paragraph 27(2), thus not requiring an import license. The Tribunal also highlighted that waste and scrap transformed into primary forms cease to be waste and scrap, as supported by Chapter Note 7 of Chapter 39 of the Customs Tariff.

Ultimately, the Tribunal upheld the Order-in-Appeal, dismissing the appeal. Despite acknowledging the lack of proper articulation of reasons in the original order, the Tribunal found no grounds for interference. The decision was based on the understanding that the imported material, in the form of flakes, did not qualify as waste under Paragraph 27(2) of the Import Trade Control Handbook, considering the transformation of waste or scrap into primary forms and the price differentiation from prime material, indicating a distinct nature of the imported goods.