Prohibited goods and misdeclaration were rejected where 100% EOU imports were covered by permission and approved job-work processing existed.

Goods imported by a 100% EOU under an amended letter of permission permitting pet bottles, plastic scrap and articles of plastics could not be treated as prohibited goods merely because washing was not available at the importer's own unit. The record showed an approved arrangement for washing through a Gujarat unit with requisite clearance, and the jurisdictional Central Excise authority had permitted movement of the goods for that processing. The original view relied mainly on Pollution Control Board advice without adequately considering this arrangement. On that basis, the import was not prohibited, misdeclaration was not established, and confiscation with penalty was not warranted.

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Issues: Whether the imported plastic scrap was prohibited goods liable to confiscation and penalty, and whether the absence of washing facility at the importer's unit justified re-export.

Analysis: The goods imported by the 100% EOU were covered by the letter of permission as amended, which permitted import of pet bottles, scrap and articles of plastics. On that basis, the import could not be treated as one of prohibited goods. The environmental objection arose because washing facility was not available at the Tuticorin unit, but the record showed an arrangement for washing through a unit in Gujarat that had the requisite clearance, and the jurisdictional Central Excise authority had permitted movement of the goods for such processing. The original authority had proceeded mainly on the Pollution Control Board's advice without adequately considering this arrangement. In these circumstances, there was no basis to treat the import as prohibited or to sustain the finding of misdeclaration.

Conclusion: The goods were not prohibited goods, there was no misdeclaration, and confiscation with penalty was not warranted.

Ratio Decidendi: Goods imported by a 100% EOU pursuant to a valid permission, and capable of lawful processing through an approved job-work arrangement, cannot be treated as prohibited merely because processing is not carried out at the importer's own premises.

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