Import policy and inspection-certificate compliance: confiscation and penalties were limited where registration sufficed and later procedural requirements could not be enforced retrospectively.
Applicable import policy for Chapter 74 allowed registered units to import the specified copper scrap without a separate licence, so confiscation of druid grade copper scrap and ordinary copper scrap was not sustainable where the registration requirement was met. Plastic scrap remained confiscable because the required licence was not produced and no exemption was shown, though redemption fine and penalty were reduced in view of the surrounding regulatory uncertainty. Penalties for non-production of the pre-shipment inspection certificate were also set aside because most consignments predated the circular introducing that requirement and the goods had been cleared on examination without evidence of prohibited material.
Issues: (i) Whether the confiscation of druid grade copper scrap and copper scrap, and the confiscation of plastic scrap, imported by the units, was sustainable in law; (ii) Whether the penalties imposed for non-production of pre-shipment inspection certificate were justified.
Issue (i): Whether the confiscation of druid grade copper scrap and copper scrap, and the confiscation of plastic scrap, imported by the units, was sustainable in law.
Analysis: The import policy note for Chapter 74 permitted import of the relevant copper scrap without licence to a registered unit, and the registration with the pollution control authority was treated as sufficient for that purpose. On that basis, druid grade copper scrap and ordinary copper scrap were held not liable to confiscation where the importer satisfied the applicable registration requirement. Plastic scrap stood on a different footing because the importer did not produce the required licence, and the record did not support exemption from that requirement. In the case of the SEZ unit, the hazardous waste regime was held applicable, but the absence of clarity in the contemporaneous position was treated as a mitigating circumstance for reduction of redemption fine and penalty.
Conclusion: Confiscation of druid grade copper scrap and ordinary copper scrap was set aside. Confiscation of plastic scrap was upheld, with reduction of redemption fine and penalty. Confiscation of druid grade copper scrap imported by the SEZ unit was also set aside, with reduced redemption fine and penalty for the remaining confiscable goods.
Issue (ii): Whether the penalties imposed for non-production of pre-shipment inspection certificate were justified.
Analysis: The consignments were mostly covered by bills of lading and contracts prior to the Board circular requiring a pre-shipment inspection certificate, and the goods had been cleared after examination without any showing of prohibited material. In these circumstances, and in light of the cited Tribunal decisions, the penalties were found unsustainable.
Conclusion: The penalties imposed on the appellants for non-production of the pre-shipment inspection certificate were set aside.
Final Conclusion: The common order was modified by sustaining only the limited confiscations and reduced monetary consequences found legally supportable, while setting aside the remaining confiscation findings and all penalties relating to the inspection-certificate issue.
Ratio Decidendi: Where the applicable import policy and the contemporaneous regulatory regime do not require a separate licence for a specified scrap import, confiscation cannot be sustained on that ground alone, and penalties for procedural non-compliance are not justified when the requirement arose after the relevant imports or the record does not show culpable violation.