By TIOL News Service

CHENNAI, JAN 14, 2016: THE appellants were importing and clearing "Mixed Waste Paper" availing concessional rate of duty under Notification No.21/2002-Cus. dt. 1.3.2002. Plastic waste and scrap, metallic waste etc. came in the declared consignment were cleared while the consignments were declared as "Mixed Waste Paper". Plastic waste and scrap, which are restricted items, were neither declared to customs nor duty was paid thereon. Instead the same were segregated after clearance and sold in domestic market. The appellant also imported some consignments under DEEC Scheme.

Consequent to the investigations, Show Cause Notice was issued demanding duty on the plastic waste, metal scrap and rags on the ground that the same were not declared and benefit of exemption is not available. The Adjudicating authority in his impugned order rejected the transaction value of waste paper and restricted the concessional benefit under Notification No.21/2002-Cus dt. 1.3.2002 in respect of total quantity of 17,901 MTs of fibre contraries segregated from the imported consignments covered under 52 Bills of Entry. The adjudicating authority ordered for confiscation of plastic waste and others valued at Rs.2,17,00,099/- under Section 111 (d) of Customs Act and imposed redemption fine of Rs.1 Crore. The importer is in appeal before the Tribunal.

The appellant contended inter alia that when the Industry faced difficulties of different types of wastage coming in the course of import of paper waste, it made representation to the Government and the Ministry of Environment and Forests in its communication dated 23.6.2006 informed to the industry that other waste to the extent of 8% is permissible. In view of such clarification, although came after the imports that guideline cannot be brushed aside because live consignments were within the tolerance limit of 8% and appellant is entitled to such benefit.

After hearing both sides, the Tribunal held:

+ On perusal of the records and evidence on record, it is evident that appellants have availed the exemption declaring the goods as "waste paper" with different descriptions of goods imported. It was established that the imported goods contained the quantities of 2468.057 MTs of Plastic Waste/Scrap, 360.35 MTs of Metallic Waste and 103.280 MTs of Cloth Waste (Rags) which were not declared by the appellants. The very fact that appellants knew very well that the said goods cannot be used in manufacture of final product without sorting out the fibre contents and non-fibre contraries and sent the contraries directly to M/s.White Star Fibres, confirm and prove that appellants have not fulfilled the mandatory condition of the notification to the extent of quantity of plastic waste, metallic waste and cloth waste (rags) as other contraries not covered under Sl.No.152 of the said notification and also not used in the manufacture of paper and paper board.

+ The ratio of the Supreme Court decision in CCE Vs Hari Chand Shri Gopal - 2010-TIOL-95-SC-CX-CB is squarely applicable to the facts of this case as it established beyond doubt that appellants had imported and misdeclared 2468.057 MTs of Plastic Waste/Scrap, 360.35 MTs of Metallic Waste and 103.280 MTs of Cloth Waste (Rags) and the said goods were cleared as waste paper and to that extent the appellants failed to comply the mandatory condition of the notification. Therefore, concessional rate of duty availed by the appellants under Notification No.21/2002 as well as full exemption availed under 203/92 Cus. is not eligible on the quantity of plastic scrap, metallic scrap and cloth scrap (rags) and these goods are chargeable to appropriate Customs Duty and the duty demand of Rs. 1,06,10,668/- is confirmed. Adjudication to that extent is upheld.

Accordingly, the Tribunal dismissed the appeal.

(See 2016-TIOL-153-CESTAT-MAD)