2014 (5) TMI 22 - HC - Customs

Court affirms goods not misdeclared, can be exported as waste.

COMMR. OF CUS., TUTICORIN Versus HARBOUR PETRO CHEM INDUSTRIES P. LTD.

The Court dismissed the Revenue's appeal, affirming that the imported goods were not misdeclared, not hazardous per se, and could be processed for export ... 100% EOU - Violation of LOP – Importation of plastic waste and scraps - Direction of re-export - Whether the goods imported by the respondent falls under the category ‘prohibited goods’ - Held that:- The entire exercise of original authority rested on the inspection report - Beyond that, there is nothing on record to show that what was imported was in contravention of LOP - The reading of the report of the Pollution Control Board points out that the materials contained all sorts of plastic waste soaked with oil, dirt and other grit matters - The Pollution Control Board pointed out that open plastic materials need proper cleaning - The observation made by the Pollution Control Board showed that what was imported were all sorts of plastic wastes and that the conclusion reached directing re-export was based on the fact that the importer did not have the facility of washing imported goods inside its premises - Apart from that, no other material to justify the conclusion of the Revenue that the petitioner had imported hazardous material or prohibited items - On facts found by Tribunal and Commissioner, this Court do not have any hesitation in holding that the Revenue is not justified in contending that the importer has committed violation to the LOP given – Therefore, questions of law raised in Civil Miscellaneous Appeal are rejected – Decided against Revenue. Issues:1. Classification of imported goods as 'prohibited goods' for non-compliance with conditions.2. Confiscation of misdeclared goods under Section 111(d) of the Customs Act, 1962.3. Compliance with Public Notice No. 392 (PN)/92-97 for imported goods.4. Competency of Tamil Nadu Pollution Control Board to inspect and recommend re-exportation.Analysis:Issue 1:The respondent, a 100% EOU, imported plastic waste and scrap for manufacturing plastic flakes. Import of plastic scrap required specific licenses and compliance with Hazardous Waste Rules. The goods were declared as pet bottles, mixed HDPE, LDPE, PP, PVC scrap. The Tamil Nadu Pollution Control Board's inspection deemed the goods hazardous, recommending re-exportation due to lack of washing facilities. The Revenue alleged non-compliance with LOP and misdeclaration, leading to confiscation and penalties. The Commissioner of Customs, however, found no misdeclaration as the goods could be processed into flakes and exported, rejecting the Pollution Control Board's recommendation.Issue 2:The Revenue contended that the goods imported did not match the LOP, constituting misdeclaration. The Pollution Control Board's report highlighted the need for cleaning the imported plastic waste, but the Tribunal found no misdeclaration in the Bill of Entry. The washing process was outsourced to another unit, complying with requirements. The Tribunal held that the goods were not misdeclared, as they were waste and scrap of plastic bottles, not hazardous per se, and could be processed for export.Issue 3:The Revenue argued that the imported goods did not align with the LOP, justifying confiscation. However, the Tribunal and Commissioner found no violation of the LOP, as the imported material was waste and scrap of plastic bottles, permissible for processing and export. The Pollution Control Board's recommendation for re-export was based on the lack of washing facilities at the importer's unit, overlooking the outsourcing arrangement for washing.Issue 4:The Revenue challenged the Tribunal's decision, emphasizing the alleged misdeclaration and non-compliance with the LOP. The Tribunal upheld its findings, considering the outsourcing arrangement for washing and the absence of evidence supporting the Revenue's claims of prohibited goods or misdeclaration. The Court dismissed the Revenue's contentions, affirming that the importer did not violate the LOP and rejecting the substantial questions of law raised.In conclusion, the judgment dismissed the Revenue's appeal, affirming that the imported goods were not misdeclared, not hazardous per se, and could be processed for export as waste and scrap of plastic bottles, in compliance with the LOP and regulations.