ORDER
G.R. Sharma
1. This is an appeal filed by Shri Sushil Halwai, Director of M/s Promising Estates & Traders Pvt.Ltd. challenging the order of the Commissioner of Customs confiscating the goods demanding duty and imposing a personal penalty.
2. The facts of the case brief are that the appellant imported a consignment of waste and scrap of plastics. On examination the waste and scrap were partly found to be old and set in rolls. Department alleged that there were misdeclarations inasmuch as in terms of I.T.C. Public Notice No.392 (PN)/92-97 dated 1.1.1997 permission was limited to import of compressed films in cut condition,. cut tape, soft waste, flakes, powders, pieces of irregular shape (not exceeding the size of 3″ x 3″). It was, therefore, alleged that the goods did not conform to the above Public Notice, therefore, the duty was demandable and the goods were liable for confiscation and the importer was liable to personal penalty. Appellant has a factory in Export Processing Zone. He was importing waste and scrap of plastic and was recycling it for agglomeration and granules and was exporting these items. The authorities below demanded duty on the goods confiscated the goods and imposed personal penalty.
3. Arguing the case for the appellant Shri B.N. Chattopadhaya, learned Consultant submits that the appellant brought the goods in the Export Processing Zone; that he gas a factory in the Export Processing Zone; that the entire import and export in Export Processing Zone are under Customs control; that nothing can come in and go out without Customs authorisation; that as soon as he found that the goods were not fully mutilated, he sought permission of the Development Commissioner and was permitted to take clearance of the goods after mutilation. The learned Counsel submits that samples were drawn by the officers of the Directorate of Revenue Intelligence; that the sample reports clearly indicated that the goods were “virgin plant waste”. It was submitted by the learned Counsel that even if the Customs did not find the goods as fully mutilated the appellant was prepared to mutilated the goods. He submitted that Customs authorities have been permitting militation of the gods after their import. he submitted that there was nothing wrong in his case. He, therefore, argued that confiscation of the goods on the ground of misdeclaration or violation of the Import Export Policy did not arise. He, therefore, argued that the imposition of penalty also was unwarranted and prayed that the order confiscating the goods demanding duty and imposing penalty may be set aside.
4. Shri V.K. Chaturvedi, learned SDR refers to paras 41,42 and 43 of the order of the Commissioner stating that permission to mutilate the goods was obtained after the importation of the goods; that there was no amendment in the Import Licence and since the goods were imported contrary to the Public Notice relevant for the purpose, therefore, confiscation of the goods was correct. He submits that there was a misdeclaration and therefore, penalty has rightly been imposed.
5. We have heard the various arguments pleaded before us by both the parties. Let us first examine whether the goods have been rightly confiscated or not. We note in the instant case that in the Public Notice relevant for the purpose during the material period there were certain restrictions. Goods imported by the appellant were not fully covered by the requirement of the Public Notice. However, we find that on receipt of the goods finding that the goods were not being considered as waste & scrap the appellant sought permission from the Development Commissioner and got it. We also note that the samples taken by the D.R.I. And tested for the purpose indicated that the imported goods were `virgin plant waste’. Thus there was an indication that the imported gods were waste. Whether they met with the requisite standard or not for that purpose, the permission was given for mutilation of the goods. We also note that the factory of the appellant is situated in the Export Processing Zone which is under the Customs control. The goods were imported for manufacture of certain other were imported were to be exported. Looking to the fact that whenever there was a dispute about mutilation of the goods normally the importer is permitted to get the goods mutilated before clearance. In the present case, therefore, the correct procedure would have been to get the gods mutilated before clearance. In the circumstances stated above we find that there was not violation of the Import Policy, therefore, confiscation was not warranted.
5. Regarding personal penalty we note that since there was no misdeclaration inasmuch as the goods on testing were found to be `virgin plant waste’, therefore, there was no question for imposition of personal penalty. In the circumstances the confiscation of goods and imposition of personal penalty is set aside.
6. In so far as payment of duty is concerned since the imported goods were to be converted into agglomeration and granules for the purpose of export, there is no question of demand of duty. In the circumstances we direct the authorities concerned to get the goods fully mutilated and see that the converted goods are exported.
7. The appeal is allowed in the above terms.
(Pronounced in Court)