2017 (12) TMI 400 - AT - Customs

Whether the confiscation of the waste paper by the lower authorities is correct or otherwise and whether penalties imposed on the main appellant as well as on the individuals needs to be upheld or otherwise? Held that - it is undisputed that the consignment of waste paper imported by the appellant did contain materials which was identified as of municipal waste. The said municipal waste was seggregated on the direction of Pollution Control Board is undisputed and the percentage of municipal waste in these consignments was 2.71% of total quantity of waste paper imported. The confiscation ordered by the adjudicating authority and allowed on payment of redemption fine is correct order and does not require any interference. The redemption fine ordered by the lower authorities is also proportionate and is not excessive - penalties imposed on the main appellant u/s 112(a) is correct, but the quantum of penalty seems to be excessive - the quantum of penalty reduced. Personal penalties imposed on the two individuals - Held that - These employees being executives of the company cannot be held as liable to penalty, as the presence of municipal waste in the consignment being inevitable, it cannot be held that these individuals had any role to play in confiscation of the goods; in our considered view, the penalties imposed on the individuals are unwarranted. Appeal allowed in part.

Summary

Issues:
- Confiscation of goods under section 111(d) and 111(m)
- Penalty under section 112(a)
- Denial of duty exemption claimed by the importer

Confiscation of Goods:
The case involved the import of waste paper mixed with municipal waste by the appellant. The consignment was examined by various authorities, including the Andhra Pradesh Pollution Control Board, which found a percentage of municipal waste in the imported goods. The adjudicating authority proposed confiscation of the goods under sections 111(d) and 111(m) of the Customs Act, 1962. The appellant contested the confiscation, arguing that the percentage of municipal waste was within permissible limits set by the Ministry of Environment and Forests. The Tribunal upheld the confiscation, stating that the presence of municipal waste was confirmed, and the redemption fine imposed was proportionate and not excessive.

Penalty Imposition:
The adjudicating authority had imposed penalties under section 112(a) on the main appellant, M/s ITC Ltd., and two individuals associated with the company. The appellant challenged the penalties as excessive and unwarranted. The Tribunal reviewed the penalties and reduced the penalty imposed on M/s ITC Ltd. to ?1,00,000, considering it to be more appropriate. However, the personal penalties imposed on the individuals were set aside, as they were executives of the company and not directly involved in the confiscation of goods. The Tribunal deemed the penalties on the individuals as unwarranted.

Denial of Duty Exemption:
The show cause notice issued proposed to deny the duty exemption claimed by the importer. The appellant had filed appeals against the order of the adjudicating authority, which had confiscated the goods and imposed penalties. The Tribunal's decision primarily focused on the confiscation and penalty aspects, finding the confiscation justified due to the presence of municipal waste and adjusting the penalty amount for the main appellant while setting aside the penalties on the individuals. The denial of duty exemption was not specifically addressed in the detailed analysis provided in the judgment.

In conclusion, the Tribunal upheld the confiscation of goods containing municipal waste, adjusted the penalty amount for the main appellant, and set aside the penalties on the individuals associated with the company. The decision provided a detailed analysis of the factual matrix, legal provisions, and previous judgments to arrive at a reasoned conclusion.