9911796707
TMI Blog2005 (9) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... ging that the importer had mis-declared the cargo for which Bill of Entry No. 375, dated 15-6-1999 was filed. The cargo was declared as plastic scrap (polyethylene) under sub-heading 3915.90, whereas the useable and non-useable rolls found during the examination should have been shown separately under Heading 3921. It was also alleged that the value declared for assessment could not be taken as the transaction value. The value of seized useable/serviceable rolls was to be worked out by taking platt's price of LDPE (raw material) plus manufacturing cost of rolls, etc., or their value, i.e. cost of raw material and manufacturing cost and profit whichever was deemed fit by the adjudicating authority. It was also alleged that the importer was not entitled to claim the benefit of Notification No. 133/94, dated 22-6-1994 as the goods were found mis-declared and the importer was not granted the necessary licence for the import of these goods and that they were not as per the conditions imposed by the Development Commissioner in the Letter of Approval and as per guidelines contained in Circular dated 14-5-1997. It was also alleged that the Directors were liable to penal action as they did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ap for recycling purposes. As per the prescribed guidelines contained in Public Notice 392(PN)/92-97, dated 1-1-1997, plastic waste and scrap was required to be imported as specified therein. The guidelines were incorporated in the Circular No. 1/97-98, dated 14-5-1997 and all the approved units recycling plastic waste and scrap were directed to comply with that. The importer had been permitted to import plastic scrap/waste under permission dated 31-12-1996 issued by the Development Commissioner, KFTZ, Gandhidham, and such imports were to be done strictly in accordance with the EXIM Policy and Procedure thereof as applicable at the time of import. 2.4 It was stated in the show cause notice that the test reports of the Customs House laboratory showed that the imported goods cannot be considered as plastic waste/scrap as they were useable rolls of plastics in the guise of plastic waste and scrap. The useable rolls could be used for the purpose for which such type of goods were meant, while scrap compressed in bales can be used only for recycling purpose for which these goods were imported by the importer. Statement of Himanshu R. Rawal, authorised person of the importer was rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. one lac was imposed on the importer and of Rs. 50,000/- on the Director. It was also ordered that interest as payable under the said Act was recoverable from the noticee. Appeal No. C/129/02 3. The appellants have challenged the order dated 24-12-2001 made by the Commissioner of Customs, Kandla, confiscating the goods weighing 67.944 MT of the enhanced value of Rs. 11,43,250/- imported vide Bill of Entry No. 791, dated 13-8-1999 giving an option to the importer to redeem the goods on payment of fine of Rs. two lacs, classifying the goods under Customs Tariff Heading 39.21, valuing the goods under detention at Rs. 11,43,250/-, denying the benefit of notification dated 22-6-1994, and imposing penalty of Rs. 50,000/- on the appellant. 3.1 The importer in the present case had filed Bill of Entry No. 791, dated 13-8-1999 declaring the goods as plastic scrap and sought assessment under Customs Tariff Heading 3915.90 claiming duty exemption under notification 133/94-Cus., dated 22-6-1994. The value was declared at US $ 13741.67 CIF (US $ 202.25 MT) for the total declared quantity of 67.944 MTs and the total assessable value was declared as Rs. 6,12,136/- and CIF value as R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order-in-original from which Appeal Nos. 106-107/02 arise, the importer had filed Bill of Entry No. 120, dated 28-4-1999 in which the goods were described as plastic scrap (polyethylene), assessable value of which was declared as US $ 200 PMT C & F Kandla and the total assessable value was shown as Rs. 3,79,898/- and duty exemption claimed under the said notification dated 22-6-1994. When the containers were examined, in the presence of two independent panchas, the goods were found to be in three categories (i) rolls serviceable or useable (ii) bales and cartons containing loose and compressed plastic scrap which were not serviceable and non-useable. The approximate market value of the same was estimated by the independent panchas at Rs. 9,23,320/- for the useable rolls (23083 Kgs.), Rs. 46,170/- for non-serviceable damaged rolls (2565 Kgs.), and Rs. 3,11,688/- for bales and cartons containing compressed plastic scrap (17316 Kgs.) 4.2 Samples from the goods of Bill of Entry 120, dated 28-4-1999, were forwarded to the Chemical Examiner, Custom House, Kandla to ascertain the composition, nomenclature, nature, etc., and whether it was virgin plastic or waste or scrap. The t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of all the appeals. We may indicate that the goods which are the subject matter of Appeal Nos. C/108-109/02 were Mc Donald's ICE bag 11 x 22 with twist, total weight 490 Kgs. (98 x 5), Calmar PO 20" x 14" total weight 360 Kgs. (60 x 6 kg.) and without marking 612 Kgs. (102 x 6 Kg.). All these according to the Revenue were useable plastic bags. Appeals Nos. C/110-111/02 4.6 The goods in respect of which Appeal Nos. C/110-111/02 arise, were useable rolls (9170 Kgs.) and lumps (18680 Kgs.) which were more than 3" x 3". The assessable value of useable rolls was Rs. 3,66,800/- and of lumps Rs. 3,73,600/-. Appeals Nos. C/112-113/02 4.7 The goods to which Appeal Nos. C/112-113/02 relate, were plastic lumps more than the size of 3" x 3". Appeals No. C/114-115/02 4.8 The goods of Appeal Nos. 114-115/02 were plastic powder, lumps of more than 3" x 3", plastic scrap in compressed form. Appeals Nos. C/116-117/02 4.9 Goods of Appeal Nos. C/116-117/02 were plastic lumps of more than 3" x 3". Appeals Nos. C/118-119/02 4.10 Goods of Appeal Nos. C/118-119/02 were plastic scrap in compressed form and lumps of more than 3" x 3". 5. It has been contended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xport Processing Zone (EPZ), duty free, there could, therefore, be no reason to mis-declare the goods. (c) The decision of this Tribunal in M/s. Shiv Cables and Wire Industries (India) v. Commissioner of Customs, Faridabad reported in 2004 (178) E.L.T. 762 (Tri. - Del.) = 2004-TIOL-920-CESTAT-DEL. was cited for the proposition holding that the Revenue to take the price of the virgin plastic and then allow the deductions in respect of recycled/reprocessed LDPE imported by the importer. It was noticed that the Tribunal held in Deeja Plastics case that platt's price report was not based on transaction value but it was merely a compilation of price ranges of various plastic material and those prices were region-wise and not country-wise and as such they did not represent the alternate transaction value. It was held that the transaction value was to be accepted as the assessable value. (d) The decision of this Tribunal in Vijay Inder Plastics v. Commissioner of Customs, New Delhi reported in 2005 (180) E.L.T. 27 (T) = 2005 (68) RLT 261 (CESTAT-Del)] was also cited for the proposition that platt's price cannot be made the basis for enhancement of the value of imported goods. The Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill the date of hearing before it, no explanation was forthcoming by the Revenue authorities as to why different stand was being taken. (h) The decision of the Calcutta High Court in Lakhotia Udyog v. Union of India reported in 1992 (58) E.L.T. 385 (Cal.) was cited to point out from paragraph 15 of the judgment that it was held that if the goods (buttons/snap fastners) were mutilated what would be released to the petitioners would, therefore, be only scrap. It was held that by directing duty to be charged on the basis that the goods had been imported in the mutilated form, Section 24 of the Act created a fiction as if the goods had been imported in the mutilated form and that this appeared to be an equitable and rational approach. (i) The decision of this Tribunal in Commissioner of Customs, Bombay v. Pudumjee Agro Industries Ltd. reported in 2003 (162) E.L.T. 1132 (Tri.-Del.) was cited to point out that the Tribunal did not find any infirmity in the order of the Commissioner (Appeals) holding that the goods in question which were roll waste (paper) were sold by the exporter and that they were never intended to be sold as paper. The Commissioner (Appeals) had observed that the Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court had rejected the submission that instead of the goods being directed to be confiscated, the offer made by the appellants that the imported goods may be further mutilated by the authorities. It was held by the Supreme Court that "the question as to whether the offer for further mutilation of the goods could have been accepted would arise, only in a case where the import was found to be bona fide and the matter only related to the extent of mutilation of the goods which had been imported". It was held that the appellants could not claim the benefit of the offer to have the goods to be further mutilated to avoid confiscation since in that case it was found that there was a fraud in the entire process of import. (b) The decision of the Supreme Court in Collector of Customs, Bombay v. Hardik Industrial Corporation reported in 1998 (97) E.L.T. 25 (S.C.) was cited to point out that it was held in paragraph, the point of time at which the respondent made the offer of mutilation was relevant. If, at the very outset, the respondent had asked for mutilation of the goods, that might have been a different matter. The Collector's order suggested that it did not. It sought to clear the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention, but subsequently relied upon the said provision. 9. There is no dispute about the fact that the appellant was required to abide by the conditions incorporated in the Public Notice 392(PN)/92-97, dated 1-1-1997 which regulated import of all types of plastic waste/scrap (except PET bottle waste/scrap). It was mentioned in the Public Notice that the applicant who wishes to submit application to the Directorate General of Foreign Trade for grant of licence for import of plastic waste/scrap was required to strictly comply with the guidelines/conditions stated in the Public Notice. As per the Public Notice, import of plastic waste/scrap was permitted only against a licence. It is significant to note that the expression plastic waste/scrap was specifically defined in the said Public Notice in the context of import of plastic waste/scrap. The said "description/definition" for the purpose of the said Public Notice reads as under : "Plastic scrap/waste constitute those fractions of plastics generated by various plastic processing operations or those fractions generated in the production process of plastics in a plant, which have not been put to any use whatsoever and as su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he description/definition given in sub-paragraph (i) of the Public Notice. The importer was also required to furnish a declaration certifying that the plastic scrap/waste imported and for which clearance was being sought should strictly conform to the description/definition as given in sub-paragraphs (i) and (ii) of the Public Notice. Admittedly, no certificate from the factory in which the so called plastic scrap/waste was generated, was produced by the appellant. The certificate on which reliance was placed was issued by the supplier which is not contemplated in the said Notice and no credence can be given to it when the specific requirement is for producing the certificate from the factory in which the waste/scrap was generated. It was also stipulated in the Public Notice that while the importers of plastic waste/scrap by 100% EOUs and units in EPZ shall continue to be governed by the provisions of Para 19 of the EXIM Policy, the parameters for import of plastic waste/scrap as specified in the Public Notice shall be kept in view by the Board, while approving the units under the scheme. The facts which have been established on the record shall clearly reveal the requirement of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the size of 3" x 3" described in sub-paragraph (ii) was in respect of pieces of irregular shape and did not apply to films and tapes, there was no warrant for including rolls of films and tapes in the category of plastic waste/scrap as defined in sub-paragraphs (i) and (ii) of the said Public Notice. 11. The contention that even if rolls of plastic films/tape and lumps larger than 3" x 3" were not considered as plastic waste/scrap, this Tribunal may direct them to be mutilated, thereby converting them into plastic scrap/waste for the purpose of releasing them duty free to the appellants in all these appeals. It is submitted that such a course had been adopted in many cases and, therefore, there should not be any distinction made against the appellants. This submission is wholly misconceived, because it is clearly established from the record that there has been mis-declaration of the goods and during the proceedings and uptill now no such request for mutilation was ever made. It is only when the authorities detected the attempted evasion of duty and the decisions have gone against the appellants that, now, such a submission is being put forth. There is no statutory provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 997 for the purpose of imports of plastic waste/scrap. We, therefore, do not see any justification for directing mutilation of the said goods. Any such course will, in our view, perpretrate illegality and encourage attempts to evasion of duty by the importers taking a chance and smuggling the goods on which duty is payable by resorting to false declarations and concealing them in the goods which are exempt from duty. 12. That takes us to the valuation aspect. It does appears that in Adani Exports, the Tribunal took the view, as reflected in Paragraph 11 of the order, that platt's price report not being based on transaction, but being only compilation of price ranges, did not represent alternate transaction value. In the present case, however, we may refer to the statement of Mr. Himanshu R. Rawal, who was the authorised person of the appellant company, which has a direct bearing on the question of valuation. In his statement dated 17-5-1999 recorded under Section 108 of the said Act, after stating that only virgin plastic lumps of the size not exceeding 3" x 3" were permitted to be imported under the Public Notice dated 1-1-1997 and that the plastic lumps under the panchnama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s such goods liable to confiscation under Section 111 or Section 113 of the said Act". Under Section 111(d), any goods which are imported or attempted to be imported contrary to any prohibition imposed by or under this Act or any other law for the time being in force, are liable to confiscation. Under Section 111(m), any goods which do not correspond in respect of value or in any other particular with the entry made under this Act in respect thereof, are also liable to confiscation. Therefore, the plastic material which did not fall within the definition of expression of plastic waste/scrap as defined in the Public Notice dated 1-1-1997 which alone could have been imported as per the Public Notice, were smuggled goods. The appellant had every reason to believe that rolls of films/tapes contained in the said consignment were imported under a false declaration. Furthermore, the goods were mixed with other goods, viz., lumps were mixed with powder and the rolls were concealed in plastic scrap/waste. Therefore, even if there was genuine plastic scrap, since it was used for concealing the smuggled goods such plastic waste/scrap was also liable to confiscation in view of Section 119 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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