Proportionate confiscation for mixed consignments: lawful scrap escaped confiscation, while prohibited plastic waste and reduced penalties were sustained.

Where prohibited hazardous plastic waste was found mixed with otherwise lawful heavy melting scrap, confiscation had to be confined to the prohibited goods alone because the scrap was correctly declared, there was no proof of deliberate concealment, and Section 111(d) could not extend to goods not shown to be prohibited. Section 119 was inapplicable because neither commodity was shown to be smuggled goods. The confiscation of the hazardous waste was sustained, while confiscation of the heavy melting scrap was set aside. Redemption fine and penalty also had to be proportionate to the limited confiscation and the negligible, re-exportable waste, so both were reduced to nominal amounts.

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Issues: (i) Whether the confiscation of the entire consignment, including heavy melting scrap, was sustainable when only a small quantity of hazardous plastic waste was found mixed with it; (ii) whether the redemption fine and penalty imposed were excessive.

Issue (i): Whether the confiscation of the entire consignment, including heavy melting scrap, was sustainable when only a small quantity of hazardous plastic waste was found mixed with it.

Analysis: The declaration in the Bill of Entry and the pre-shipment inspection certificate supported the importer's case that the heavy melting scrap was correctly declared and there was no evidence that the importer knew of any hazardous plastic waste being present in the consignment. The quantity of plastic scrap was negligible and there was no material to show deliberate concealment. Section 119 of the Customs Act was inapplicable because neither the heavy melting scrap nor the plastic scrap was shown to be smuggled goods. Section 111(d) of the Customs Act could validly apply only to the hazardous plastic waste, since import of such waste was prohibited, but not to the heavy melting scrap, for which no prohibition existed.

Conclusion: The confiscation of the hazardous plastic waste was sustained, but the confiscation of the heavy melting scrap was set aside.

Issue (ii): Whether the redemption fine and penalty imposed were excessive.

Analysis: The redemption fine had been fixed in lieu of confiscation of the entire consignment and was therefore disproportionate once confiscation of the heavy melting scrap was set aside. As the hazardous waste had no ascertainable value and had to be re-exported, only a nominal redemption fine was warranted. As regards penalty under Section 112(a) of the Customs Act, the absence of deliberate import of the plastic scrap did not eliminate liability, but the quantum had to be reasonable in the facts of the case.

Conclusion: The redemption fine and penalty were reduced to Rs. 50,000 each.

Final Conclusion: The order was modified by sustaining confiscation only of the hazardous plastic waste, while setting aside confiscation of the heavy melting scrap and reducing the monetary liabilities to nominal amounts.

Ratio Decidendi: Where prohibited goods are found mixed with otherwise lawful goods without proof of deliberate concealment, confiscation and consequential monetary penalties must be confined to the prohibited goods alone and must be proportionate to their ascertainable value and facts.

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