2012 (6) TMI 313 - AT - Customs

Importation of plastic scrap - Revenue entertained a view that the plastic scrap importation was contrary to the provisions of Foreign Trade Policy relating to plastic scrap - confiscation and order of re-export of goods - redemption fine and penalty imposed - Held that - What emerges from CIPET s report is that except for quantity with stickers, balance quantity can be considered as a virgin plastic waste or otherwise and they are not in a position to certify the same. In view of the fact that there was no deliberate intention to import hazardous waste into the country as it emerges from the records, substantial reduction in the redemption fine and penalty would meet the ends of justice for both sides. Accordingly, the redemption fine on the goods is reduced to ₹ 40,000/- penalty on the importer is reduced to ₹ 25,000/- and penalty on the CHA is reduced to ₹ 10,000/-.

Summary

Issues:
Importation of plastic scrap contrary to Foreign Trade Policy; Confiscation and re-export order; Imposition of redemption fine and penalties.

Analysis:
1. The appellant, an EOU, imported plastic scrap which was found to be against the provisions of the Foreign Trade Policy. The consignment was examined, leading to confiscation and a re-export order. Additionally, a redemption fine of Rs.2,00,000/- and penalties of Rs.1,00,000/- on the importer and Rs.50,000/- on the CHA were imposed.

2. The first argument presented was that the importation of plastic scrap was not against the government policy. Reference was made to ITC (HS) guidelines stating conditions for importation, including scrutiny and testing of samples by CIPET. The appellant argued that most of the imported plastic scrap fulfilled the policy conditions, except for a small percentage with stickers attached.

3. The CIPET report indicated that 11.7% of the imported goods were clearly classified as virgin plastic waste, while the classification of the remaining quantity depended on the manufacturing process. The appellant did not have the manufacturer's certificate at the time of importation, but certificates were later produced showing the waste was collected from registered manufacturers.

4. Considering the facts, the court accepted the certificates and statements provided by the appellants as true, acknowledging the lapses in following the required procedures. A lenient view was taken due to the lack of deliberate intention to import hazardous waste, and the goods were allowed to be recycled by the appellant instead of re-exporting the whole quantity.

5. The court reduced the redemption fine to Rs.40,000/-, importer's penalty to Rs.25,000/-, and CHA's penalty to Rs.10,000/-, considering the circumstances and the need for a lenient approach. The decision aimed to meet the ends of justice for both sides, avoiding further litigation and delays.

This detailed analysis of the judgment highlights the issues, arguments, findings, and the ultimate decision reached by the court regarding the importation of plastic scrap, policy compliance, confiscation, fines, and penalties.