S/Shri S.K. Bagaria, Senior Advocate and R. Raghavan, Advocate, for the Appellant. Shri M. Rammohan Rao, DC (AR), for the Respondent.
[Order per : R. Periasami, Member (T)]. -
Background of the case : The appeal is filed against impugned order dated 16-11-2007 passed by Commissioner of entral Excise (Adjudication), Chennai.
2. The brief facts of the case are that appellants were importing and clearing "Mixed Waste Paper" availing concessional rate of duty under Notification No. 21/2002-Cus., dated 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.
3. Based on the specific intelligence, the DRI Chennai initiated investigation and live consignments covered under Bill of Entry Nos. 739234 and 739238 both dated 6-1-2005 were intercepted and on examination of one bale in respect of Bill of Entry No. 739238, it was found that the cargo declared as "Mixed Waste Paper" contained plastic waste and scrap. Since plastic waste and scrap, a restricted item was not declared by the appellant, consignment covered by both the Bills of Entry were seized under mahazar proceedings on 12-1-2005.
4. On detailed scrutiny of documents and upon further investigation, it was noticed that appellants entered into contract with M/s. White Star Fibres, Lakshmipuram, Secunderabad to sort out imported goods, i.e., waste paper into good fibre and non-fibre contraries. The officers of DRI visited the stockyard of M/S. White Star Fibres and seized stocks of segregated materials fibres, plastic scrap and Metal scrap vide mahazar dated 12-1-2005. From the record recovered from M/s. White Star Fibre, Secunderabad, it was revealed that the appellants have imported consignment under 52 Bills of Entry which were cleared and declared as "Mixed Waste Paper" and after clearance the goods were sent to M/s. White Star Fibres for sorting.
5. Investigating authority also noticed that during 2004, the appellants imported identical goods of waste paper, mixed papers of sorted grade - 5.01 under Bill of Entry No. 636370, dated 31-5-2004 and on detailed examination it was noticed that declared cargo contained non-fibre contraries along with declared cargo which was approx. 15% of the imported goods. Duty was assessed on the non-fibre content and the appellant paid the appropriate duty. It was further noticed that for the subsequent clearances, the appellants have not declared to the Customs the presence of non-fibre contraries.
6. Out of 52 Bills of Entry, 23 Bills of Entry were imported cleared under DEEC advance authorisation scheme under Notification No. 203/92-Cus., dated 19-5-92 and Notification No. 93/2004. The remaining Bills of Entry were cleared under Notification No. 21/2002 availing concessional rate of duty as "waste paper". After detailed investigation, a show cause notice was issued by the Additional Director General, DRI demanding duty, interest and penalty on the non-declared items viz. plastic waste, metal scrap and cloth scrap (rags), restricting the benefit of Notification No. 21/2002, proposing to reject the end-use certificate issued for 6 Bills of Entry and to confiscate the goods seized.
7. The adjudicating authority in his impugned order rejected the transaction value of waste paper and valued the non-declared items fixing the transaction value of plastic scrap, metallic waste and rags @ Rs. 7,000/- per Ml, Rs. 12,000/- per MT and Rs. 1,000/- per MT respectively and restricted the concessional benefit under Notification No. 21/2002-Cus., dated 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. He also rejected the end-use certificate issued for six bills of entry and confirmed the demand of customs duty on the above non-declared items amounting to Rs. 1,06,10,668/- under Section 28(2) of Customs Act along with interest under Section 28(AB) of the Customs Act. The adjudicating authority ordered adjustment of amount of customs duty of Rs. 8,30,915/- already paid towards plastic waste and scrap metal waste and he 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. He also imposed penalty equal to duty on the appellant under Section 114A of the Customs Act. Hence the present appeal.
8. The case was heard on 10-2-2015 and 22-4-2015 and proceeding was recorded in the open Court on 22-4-2015. Arguments on behalf of appellant:
8.1 Learned senior counsel was elaborately heard on 10-2-2015 raising the contention that it was beyond the knowledge of the appellant to know the constituents of the waste involved in the imports and quantum thereof involved in different Bills of Entry covering different consignments in the past including the live consignments which was under investigation. There were 52 Bills of Entry forming part of this adjudication out of which 2 Bills of Entry related to live consignments. Appellant made a very clear condition in the purchase order to the supplier that "Mixed Papers Sorting Grades.01, Mixed Paper Board, Out-throws 10%." This means to the extent of 10% of other waste in the imported waste paper consignment was permissible. But such a condition does not intend that unintended waste shall be exported by exporters.
8.2 Prior to 2004, appellant had no arrangement to sort out the other waste for which it used such waste as filling material on its ground. After 2004, it sorted out the other waste from paper waste through job worker. All the imports were made bona fide and no intention was there to cause prejudice to Revenue. Only upon sorting out, appellant was able to know the composition, content and mquantum of other waste contained in the imports and that was not more than 10% of the paper waste imported. However, in the live consignments, weight of other waste was 8% as was noticed in the adjudication.
9. Placing a detailed paperbook, summary of the case, notes of arguments, evidence, documents relied upon, notification granting benefit to the appellant, circular issued by C.B.E. & C., and various citations and judgments, Id. counsel brought out the difficulties of the industry and he argued summarily as under :-
9.1 "Live consignments when examined that showed other waste contents around 8% which is the finding by the adjudicating authority in Para 2 of his order. The authority examined goods involved in two bills of entry and that too only one bale out of consignments covered, by such B/Es showed the wastage. The process of segregation and verification having involved vast exercise and was time consuming, the authority did not opt to examine the contents covered by each bill of entry.
9.2 The appellant made it very clear that goods intended to be imported were the descriptions as detailed in the Annexure to the SCN appearing at pages 28-32 of Volume-2 of the paperbook. That disclosed "Waste Paper - Mixed Paper - Sorting Grade-5.01" in some of bills of entry and as "Sorted Grade-5.01" in other bills of entry. Substantial quantity involved in the import was waste paper only but a very small fraction to the extent of 8% was other than waste paper which was not known to the appellant till segregation of the entire lot was made.
9.3 When purchase order was placed, appellant made very clear to the exporter that wastepaper may contain certain mix which is very common in such exports. But the constituent of the mix was not within the knowledge of the appellant. Accordingly, description of goods of all the 52 Bills of Entry was declared to the Customs authority bringing out the understanding of the importer and exporter, describing the goods as detailed in pages 28 to 32 of the Paper Book Vol.-2. 9.4 Out of the 52 Bills of Entry, 23 Bills of Entry related to DEEC scheme and the appellant had discharged its export obligation in respect of the goods imported thereby, which was well-known to Customs, Central Excise authorities as well as DGFT.
9.5 In the past, all the 52 Bills of Entry were cleared without any examination and without any question. All along the description in the Bills of Entry were given in the manner detailed in pages 28 to 32 of the Paper Book Vol. 2 which was also within the knowledge of notice issuing authority since such descriptions were in the file of Customs. Appellant's clearances were nothing strange to the authorities. Accordingly, there was no intention to make abuse of the benefit of the Notification No. 21/2002-Cus., dated 1-3-2002. (Ref. Page 5 of Vol. 3 - Condition No. 20 - SI. No. 152 of the Table of Notfn.).
9.6 Out of the imports made prior to the year 2004, when wastage came out from waste paper consignments, those were used as filling material in the factory of appellant and not sold. Prom the year 2004 onwards, when the goods imported were sent to job worker for segregation and sorting out, different components emerged therefrom. That was informed to the excise authority and that was well within their knowledge since end-use certificates were issued by that authority to the appellant. The appellant maintained full record of the quantity of segregated waste and sales thereof.
9.7 While record reveals different composition of the other waste in 52 consignments imported during the period 3-9-2002 to 14-10-2004, there was hardly about 1% of such constituent in the consignments. The extent of plastic waste was about 12%, metallic waste wTere about 2% and cloth waste was about 0.5%. But even this aspect was informed to the Central Excise authorities which is apparent from page 23 of the order of the adjudicating authority.
9.8 Entire import made by the appellant was classified under the CTH 47079000 which reads as under :- "Other, including unsorted waste and scrap"
9.9 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.
10. Ld. Commissioner did not examine the difficulty of the industry. Only on the presumption that entire waste was known to the importer he denied benefit of exemption Notification No. 203/92-Cus., dated 19-5-1992 to the appellant. Appellant never intended to bring anything beyond 8%. Entire imports were within the permissible limit as has been clarified by the Ministry and even live consignments demonstrated the same.
10.1 There is no scope to deny benefit of exemption Notification No. 203/92-Cus., dated 19-5-1992 to the appellant for the reason that the goods which were imported were intended to be used which does not mean that those are necessarily to be used following the ruling of the Apex Court in the case of State ofHaryana v. Dalmia Dadri Cement Ltd. - 1987(11)LCX0002 Eq 2004 (178) ELT 0013 (S.C.). Reading Para 10 of the judgment it was submitted that any expression "for use" used in a notification should be interpreted as "goods intended for use" but not as "goods actually" used or "goods used". Further, relying on Para 12 of the judgment, he reiterated that direct use of goods is not of much relevance to interpret the benefit of exemption notification. (Ref. Page 101 of Vol. 3 of PB). Reliance was also placed on the decision of BPL Display Devices Ltd. v. CCE, Ghaziabad - 2004(10)LCX0010 Eq 2004 (174) ELT 0005 (S.C.) [Ref. Page 102 of Volume-3 of the PB]. The appellant made use of the goods what that was usable and what that was not usable was beyond its control to use. It had not deliberately imported undesired waste to defeat the law. Therefore, benefit of exemption notification is admissible to it. Accordingly, when there was no deliberate import of the unusable material, the benefit of notification cannot be denied following ratio laid down in the above two judgments (supra).
10.2 Since the goods were not segregable at the stage of import, classification thereof was made under CTH 4707 90 00. For such purpose, learned senior counsel relied on the decision of Dunlop India Ltd. & Madras Rubber Factory Ltd. v. UOI & Others -1975(10)LCX0016 Eq 1983 (013) ELT 1566 (S.C). He specifically relied on Para 30 of the judgment to submit that condition of the article at the time of import is decisive to classify the goods under appropriate head and duty is leviable on such classification. Therefore, no attempt is permissible to differ with the classification declared by the appellant.
10.3 It is global phenomena that waste paper bales usually contain ex traneous material/contaminants to some extent as is recognised by two publica tions as under :-
(a) European List of Standard Grades of Recovered Paper and Paper Boards - (Ref. Pages 41 and 42, Volume 2 of PB)
(b) Publication of Technical Association of Pulp and Paper Industry, Atlanta - (Ref. Page 43/Volume 2 of PB)
10.4 Ld. senior counsel submitted that the imports relate to the year 2002-04 and past clearances were relating to 52 Bills of Entry covering the period prior to 3-9-2002 to 14-10-2004. Details of all the Bills of Entry, content thereof, understanding of the parties, global practice, classification of goods declared, interpretation of the expressions used in the notification and the relevancy of the classification being known to the department, they should not have issued any show cause notice on 29-3-2005. The appellant neither made any misdeclaration of imports nor any suppression of facts was made deliberately for which Section 28 of the Customs Act, 1962 is not invocable. There was no intention to make eva sion. Revenue made allegation that appellant had made a suppression. But bur den of proof by Revenue was not discharged to bring out nature thereof. So merely alleging that the lot contained other than paper waste, that does not satis fy the law declared by the Apex Court. It is the necessity of law that suppression should have been wilfully done with the intention to cause evasion which are essen- tial ingredients of Section 28 of Customs Act, 1962. It was not for the appellant to establish veracity of the allegation but the person who alleges has to specify whether the appellant acted mala fide. Nothing is apparent from adjudication as to mala fide of appellant. Therefore, Revenue failed in its allegation.
11. Relying on Para 19 of the judgment of the Apex Court in the ease of Unizvorth Textiles Ltd. v. CCE, Raipur - 2013(01)LCX0003 Eq 2013 (288) ELT 0161 (S.C.). (Ref. Page 21 of Vol. 4 of PB), ld. senior counsel submitted that Hon'ble Apex Court held in unambiguous terms as to what is bona fide and also how the elements of Section 28 are to be satisfied by Revenue before invoking provisions thereof. Apart from that, there should be mens rea with predetermined mind to cause evasion as well as presence of elements of Section 28 to invoke that section. He specifically relied on Para 24 of the above judgment to explain the ratio thereof and submitted that in absence of any of the ingredients of Section 28, present show cause notice has no jurisdiction.
12. Reiving on the ratio laid down by Supreme Court in the case of Chamundi Die Cast Private Ltd. v. CCL, Bangalore - 2007(05)LCX0153 Eq 2007 (215) ELT 0169 (S.C), (Ref. Page 27 of Vol. 4 of PB), it was the submission on behalf of the appellant that Hon'ble Supreme Court has also held that there should be suppression of facts Wilfully done resulting in evasion. But that is totally absent in the present case.
13. Relying the decision of Larsen and Toubro Ltd. v. CCE - 2007(05)LCX0001 Eq 2007 (211) ELT 0513 (S.C.) (Ref. Page 30 of Vol. 4 of PB), it was the submission of appellant that unless the ingredients of Section 28 is present, entire adjudication is time-barred. Further reliance was placed on the Hon'ble Supreme Court's judgments as under :- (Ref. Vol.4 of PB),
14. The appellant submits that when there was no suppression of facts, there is no question of any adjudication in respect of past consignments. Therefore, there is no question of any confiscation nor penalty imposable. Similarly, the live consignment carrying 8% permissible limit of goods other than paper waste should not be adversely viewed. Apex Court in the case of State ofHaryana v. Dalmia Dadri Cement Etd. - 1987(11)LCX0002 Eq 2004 (178) ELT 0013 (S.C), categorically held~that "goods used" appearing in the notification should not be interpreted as "goods should have been actually used" to comply to the notification condition. The notification requires that the goods are the goods meant to be used. Therefore entire import being meant for use, the appellant meant entire import to be used. Accordingly, notification benefit is not at all deniable.
15. Lastly, appellant fairly submitted that if at all Tribunal comes to a conclusion that there should be segregation of the goods according to the contents and composition for levy, the valuation adopted by Revenue in respect of those goods remain undisputed. If at all there is also conclusion that the goods segregated calls for appropriate classification, that may be done, however, keeping in view the decision of Apex Court in the case of Dunlop India Etd. & MRF v. UOI & Others (supra) (Ref. Para 30 of the judgment). Even then, there shall not be any liability of the appellant.
16. It was also submitted by appellant that in the past when some of the goods imported in the case reported in 2009(09)LCX0039 Eq 2010 (262) ELT 0456 (Tri.-Chennai), contained municipal waste there was no adverse view taken by the Tribunal except imposing a penalty. Similarly, Hon'ble High Court of Madras in ETC Etd. v. Norasia Container Eines Etd. - 2008(11)LCX0388 Eq 2009 (247) ELT 0060 (Mad.), has taken a view that goods which was not intended to be used should not have been imported. Therefore, appellant deserves lenient consideration when the contents in imports were beyond control of appellant to know the same. Submissions of revenue:
17.1 Submitting on behalf of Revenue, learned DR says that in respect of entire 52 Bills of Entry, waste other than paper waste consisting of 2468 MTs of Plastic Waste, 360 MTs of Metallic Waste and 103 MTs of Rags were imported with the knowledge of the appellant. Such finding was enough to say that the goods imported consisted undesired materials disentitling the appellant to the benefit of Notification No. 21/2002-Cus. The notification required that the appellant should only import those goods which will be used in the manufacture as has been authorized to it by the licence. The term "will be used" is significant in the notification under Condition No. 20 thereof. Appellant declared to Customs that entire goods imported shall be used in manufacture for which undertaking was given by the appellant in that respect. Therefore, the quantity of undesired goods stated above came to India not being used in manufacture, there was violation of the condition of the notification. Accordingly, not only appellant is liable to duty on the equivalent value of the goods found to be waste other than paper waste, as aforesaid but also confiscation was warranted. So penalty was also imposable and that was rightly done by the authority below.So far as the benefit of the Notification No. 203/92~Cus. is con-cerned, the appellant being advance licence holder in respect of 23 Bills of Entry, it is liable to duty for the violation of the condition of the notification. The licence was issued under strict user condition. That was not liable to be abused. When appellant was not an actual user of the entire import but aforesaid quantities were sold without being used in the manufacture of the specified goods, it was not entitled to the benefit of the notification. The condition "will be used" having been violated, that warranted levy of duty as well as penalty and confiscation,
17.2 There was no declaration to the Customs about the composition of the import and the quantity thereof in the consignment covered by each Bill of Entry. Only upon detection by the DRI, appellant came forward to disclose the composition of imports. Therefore, undisclosed element in the import made the appellant liable to adjudication.
17.3 The appellant did not dispute composition of imports. Therefore, classification of the misdeclared quantity of 2468 MTs of Plastic Waste, 360 MTs of Me-tallic Waste and 103 MTs of Rags is to be made under appropriate CTH. Misdeclara-tion was due to suppression of the material contents in the consignments imported through 52 Bills of Entry. Accordingly, neither benefit of Notification No.21/2002 nor Notification No. 203/92 is admissible. The appellant is required to prove strictly that entire goods imported were used in the manufacture as per undertaking given. But it did not adhere to that. The end-use certificate is not conclusive evidence of use of entire import. Therefore, it shall not come to the defence of the appellant because undertaking given at the time of import was not fulfilled.
17.4 The waste quantities were non-fibre material which is beyond the scope of the Chapter 47. Interpretative Rules read with section notes direct that goods of like nature with fibre content is to be segregated from non-fibre content in the goods imported. Therefore, the Customs authority when found the import contained different wastes in the consignment covered by Bill of Entry No. 636307/2004, dated 31-5-2004, they brought the goods of different nature in the consignments to different classification for dutiability. Detection by DRI on 31-3-2004 made it clear to the authority that the appellant has violated norms of the notification calling for inadmissibility of benefit of the notification. Added to this, violation of actual user condition has rightly exposed the appellant to consequence of confiscation and penalties. Department has rightly computed duty lia-bility only in respect of aforesaid questionable quantity of goods and on no other elements of import.
17.5 Countering the proposition of the appellant that there was no misdeclaration nor there was suppression and adjudication was time-barred, Id. DR submits that there was deliberate misdeclaration because quantity aforesaid found speaks for itself. Accordingly, appellant cannot plead that it has made truthful declaration of description of the imports and adjudication is beyond limitation. Merely submitting the purchase order, appellant is not immune from levy nor has defence that it has not imported the goods in violation of condition of the notification. When there was violation of condition of notification by its own declaration, it is liable to duty as well as penalty and confiscation.
17.7 Appellant was very well aware before import that it intended to import nearly 10% inadmissible goods to its benefit. Therefore, it was liable to declare suo motu that 90% of the goods were eligible to the notification benefit and 10% of the goods were dutiable. When the appellant deliberately imported waste other than paper waste it cannot claim duty exemption on any plea. The adjudication proceeding was not time-barred. Main character of the goods at the time of shipment decides classification thereof. When appellant had conscious knowledge about various goods imported through 2 live Bills of Entry and the import manifest declared goods as "wastepaper" while Bills of Entry declared the goods as "mixed waste paper", there was deliberate suppression of fact. This demonstrates that appellant abused the process of law to make undue gain for which it is liable to duty and other consequence of law. 17.8 It is well-settled law that what is prescribed in the notification as well as chapter note, interpretative rules shall govern the classification and intention of the import. Appellant failing to satisfy the conditions of the Interpretative Rule and Section Notes was liable to consequence of law.
17.9 When the goods imported contained all unwanted mixture therein, it was environment unfriendly import and that is contrary to law of this country. Mere use of other wastes by segregation on its own and using thereof for land filling does not immune the appellant from the consequence of law. When the appellant segregated unwanted goods from 2004, it cannot claim now that adjudication is time-barred because import of such goods was well within the knowledge of the appellant.
18. The show cause notice brought the conduct of the appellant and statements recorded from different persons also revealed its conduct corroborated by the Bill of Entry No. 636370, dated 31-5-2004. That is enough to hold that appellant acted mala fide. When the appellant protested the action of Customs in respect of B/E dated 31-5-2004 by its letter dated 30-9-2004 it should have come out with clean hands to prove its bona fide. Allegation of mala fide was proved by Revenue bringing out entire material fact, motive and conscious knowledge of appellant as revealed from the statements recorded. Therefore, appellant cannot claim that he is innocent and not liable to adjudication.
19. Relying on the decision in the case of Central Board of Secondary Edu-cation v. Vineeta Mahajan (Ms.) and Another - (1994) 1 SCC 6, Revenue submits that when unfair means adopted in the examination was held to be violation of relevant rules therein, the same should be construed in Customs Act so as to conclude that in respect of past and live consignments the appellant has violated import norms and indulged in misdeclaration, to invite penal consequence of law. Rejoinder of appellant:
20. In rejoinder, on behalf of the appellant, it was submitted that so far as Bill of Entry No. 636370, dated 31-5-2004 is concerned, the appellant well ex plained to the customs authorities on 30-9-2004 that because of lying of goods for a long time, and demurrage having been suffered it shall clear the goods without prejudice to its right to contest the same if any proceedings is initiated in future in this respect. Therefore, when clearance was made under protest, that absolves the appellant from the liability in respect of the imports since those were not de- liberatelv misdeclared imports. The appellant had no intention to make any misdeclaration for the reason that any shortage in the imported quantity shall result in loss to it and because of other waste, it cannot manufacture paper out of that. Therefore, no person will cause prejudice to himself knowingly. Accordingly, entire contention of Revenue fails on this ground.
(a) Segregation was necessary to make proper account of the goods imported without any compromise. Therefore, the allegation of Revenue is baseless. Notification benefit is to be granted in the manner as declared by the judgment of the Apex Court. Even though the term "will be used" is appearing in the condition it is qualified by the words intended to make use. Therefore, when appellant was prevented to make use of other waste for reasons beyond its control it cannot be denied benefit of notification.
(b) There is no dispute that Chapter 47 applies to the imports. Even appellant did not dispute the classification of the goods if otherwise classifiable in other entries in case Tribunal finds that its imports are appropriately classifiable for duty.
Findings and conclusion of Tribunal
21. We have carefully considered the submissions of both sides and examined all the relevant documents on which reliance was placed by both sides and available on record. The issue in the present appeal relates to import of goods misdeclared as "waste paper" containing plastic waste/scrap, metal scrap and cloth scrap (rags) and demand of duty as well as penalty on such goods. So also confiscation of consignment was done imposing redemption fine. The adju-dicating authority in his impugned order has discussed the issue at length and confirmed the duty on the following goods :-
SI. No.
Quantity
Item
(1)
2468.057
MTs
Plastic
Waste/Scrap
(2)
360.35
MTs
Metallic
Waste
(3)
103.280
MTs
Cloth
Waste (Rags)
The appellant filed 52 Bills of Entry covering the above goods for import of waste paper/mixed paper during the period from 3-9-2002 to 14-10-2004 as per Annexure to SCN available on pages 28 to 32 of the paperbook. On a perusal of the annex-ures to the SCN, it was noticed that the appellant imported waste paper including scrap along with that and filed Bills of Entry for clearance of home consumption. On examination of 2 live consignments in respect of Bill of Entry No. 739238, dated 6-1-2005, presence of plastic waste and scrap was detected which was ap-prox. 8% of the total quantity. Follow up investigation revealed that appellant entered into contract with third party M/s. White Star Fibres to sort out the waste paper into fibre and non-fibre contraries pertaining to the above 52 Bills of Entry as per the records available with them as well as with M/s. White Star Fibres. Out of the total quantity of waste paper, non-fibre contraries contained above items viz. Plastic Waste/Scrap, Metallic Scrap and Cloth Scrap (rags) which is clearly listed as per annexure to SCN.
21. Out of the 52 consignments, in respect of 29 Bills of Entry, appellants availed concessional rate of duty under Notification No. 21/2002-Cus., dated 1-3-2002 and in respect of remaining 23 Bills of Entry, the goods were cleared under DEEC Advance Licences claiming duty exemption under Notification No. 203/92-Cus., dated 19-5-2002. The appellant's main contention is that what they have imported is only 'waste paper' which may contain certain mix other than waste paper which was not known to the appellants at the time of import and also contended that they are eligible for the benefit of notifications hereinbefore stated on waste paper and there was no misdeclaration and contended that since the goods were assessed finally, there is no question of suppression of facts and therefore, demand is hit by limitation. It was also contended that "Mixed Waste Paper" is rightly classifiable under 47079000 which covers 'unsorted waste and scrap'.
22. As regards the availment of concessional rate of duty under Notification No. 21/2002, on perusal of the description on the Bills of Entry, we find that appellants have declared the description of the goods imported in the following manner :-
(1) Imported Waste Paper/Pulp Waste Paper
(2) Waste Paper - Mixed Waste Paper
(3) Waste Paper - Imported Mixed Cutting
(4) Waste Paper - Co-mingled Super mixed
(5) Waste Paper - Co-mingled Kerbside Super mixed
(6) Waste Paper - Sorting Grade 5.01
(7) Waste Paper - Sorted Grade.
It is seen from the above that appellants used different description of the goods and declaring that all these goods are classifiable under CTH 47079000 to claim concessional rate of dutv as per S. No. 152 read with Condition No. 20 of Customs Notification No. 21 /2002-Cus., dated 1-3-2002 and cleared the same. It is relevant to place the Exemption Notification No. 21/2002 for appreciation of spirit and intent thereof: "Exemption and effective rates of basic and additional duty for specified goods of Chapters 1 to 99. - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 17/2001-Customs, dated the 1st March, 2001 [G.S.R. 116(E), dated the 1st March, 2001], the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of the description specified in column (3) of the Table below or column (3) of the said Table read with the relevant List appended hereto, as the case may be, and falling within the Chapter, heading or sub-heading of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as are specified in the corresponding entry in column (2) of the said Table, when imported into India, -
(a) from so much of the duty of customs leviable thereon under the said First Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said 1 able;
(b) from so much of the additional duty leviable thereon under sub-section (1) of section 3 of the said Customs Tariff Act, as is in excess of the rate specified in the corresponding entry in column (5) of the said Table,
subject to any of the conditions, specified in the Annexure to this notification, the condition No. of which is mentioned in the corresponding entry in column (6) of the said Table :
TABLE
SI. No.
Chapter
or Heading No.
or
subheading No.
Description
of goods
Standard
rate
Additional
duty rate
Condition
No.
(1)
(2)
(3)
(4)
(5)
(6)
152.
47.07
All goods
imported for
use, in, or supply to,
a unit for manufacture of paper or paperboard.
5%
Nil
20
ANNEXURE
Condition
No.
Conditions
20
If,-
a) the
importer furnishes an undertaking to the Deputy Commissioner of
Customs or the Assistant Commissioner of Customs, as the case may be,
that such imported goods will be used for the purpose specified and in
the event of his failure to comply with this condition, he shall be
liable to pay, in respect of such quantity of the said goods as is not
proved to have been so used, an amount equal to the difference between
the duty leviable on such quantity but for the exemption under this
notification and that already paid at the time of importation; and
(b) the importer produces to the said Deputy Commissioner or Assistant
Commissioner, as the case may be, within six months or such extended
period, as that Deputy Commissioner or Assistant Commissioner may allow,
a certificate issued by the Deputy Commissioner of Central Excise or the
Assistant Commissioner of Central Excise, as the case may be, in whose
jurisdiction the said goods have been used in such unit, that the said
goods have been so used."
24. As seen from the above, SI. No. 152 of the notification exempts all goods falling under Chapter 47.07 for use in the manufacture of paper and paper board which is chargeable to Concessional Customs duty @ 5% and Additional Duty at "NIL" rate subject to the condition specified .at Condition No. 20 of the Annexure to the said notification. Chapter Heading 4707 of Chapter 47 of CTH covers "Recovered (waste and scrap) paper or paper board". The goods imported were classified under sub-heading 4707 90 00.
25. From the plain reading of the entry at SI. No. 152 of the above notification, it is evident that exemption allowed under the above serial number is not an unconditional one but a conditional exemption. The main condition of the notification is that the importer or the appellant executes an undertaking before the Deputy Commissioner of Customs that the imported goods will be used for the manufacture of paper and paper board which is a final product and in the event of appellant's failure to comply with this condition they shall be liable to pay the duty in respect of such quantity of the said goods as is not proved to have been so used but for the exemption under this notification.
26. 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 as detailed in the preceding paragraph. 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 203.280 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 SI. No. 152 of the said notification and also not used in the manufacture of paper and paper board. The appellants relied on the com-munication dated 23-6-2006 issued by the Ministry of Environment & Forests and contended that the Ministry had permitted up to 8% of recyclable material in waste paper imports. The period of imports in the present case is from 3-9-2002 to 14-10-2004 whereas the above letter is of 2006 and the same is not applicable. Further, the said communication was issued by Ministry of Environment & Forests in the context of pollution control measures where garbage or municipal waste are brought into India in the name of waste paper. Further, we find the Customs issued standing order dated 18-2-2006 and subsequently issued addendum to the said standing order on 31-3-2006 based on Ministry of Environment & Forests letter wherein at 6(i) of the said standing order, it is categorically stipulated that the plastic and metallic waste found in the waste paper are to be assessed to merit rate of duty. Therefore, the appellants relying the Ministry of Environment & Forests communication is of no relevance for classifying the plastic & metallic waste under respective chapter heading and assessing on merit rate of duty.
27. It is on record that as per the condition of the notifications in question, the appellant themselves executed an undertaking before the Customs before clearance of goods, binding themselves that the goods shall he used for the manufacture of paper and paper board and they also undertook that in the event of noncompliance they shall pay customs duty on such quantity. Therefore, it is established beyond doubt that the above quantity of plastic waste/scrap, metallic scrap and cloth waste imported in the guise of waste paper are not eligible for exemption under SI. No. 152 of the Notfn. No. 21/2002. Therefore, appellants are liable to pay appropriate customs duty on the above items.
28. Further, we find that in respect of 23 Bills of Entry, appellants imported and declared the goods as "waste paper" and availed the benefit of exemption under Notification No. 203/92-Cus., dated 19-5-92 under DEEC advance license which exempts from whole of customs duty and the additional duty of customs on the goods imported against value based advance licences subject to the Condition No. (ii) of the notification which reads as under :- "(ii) that the importer at the time of clearance of the imported materials. - (a) produces proof of having executed a bond or a legal undertaking before the Licensing Authority concerned, for complying with the conditions of this notification; and (c) makes a declaration before the Assistant Commissioner of Customs or Deputy Commissioner of customs binding himself to pay on demand an amount equal to the duty leviable but for the exemption, on the imported materials in respect of which the conditions specified in this notification have not been complied with:
29. We find that condition (ii)(b) of Notfn. No. 203/92 is similar to condition 20 of Notfn No. 21/2002. On perusal of the Advance Licence No. 0910028933/2/03/00 at page 99 of the paperbook, we find that the advance licence was issued to import items as per the list attached to the licence. SI. No. 2 of the list attached covers ITC (HS) code 4707 90 00 with description of imported item as "waste paper". As already discussed above, the goods were cleared as "waste paper" under advance licence whereas quantity of plastic waste and metallic waste and cloth waste (rags) were not declared by the assessee. Therefore, such items are not covered under advance licence as what was permitted for import under advance licence is waste paper and not plastic waste, and scrap and metal-lic waste and scrap, etc., and not covered under the said advance licence. Therefore, in terms of condition (ii)(b) of the Notification No. 203/92 and as per the undertaking executed by the appellant before Customs the appellants are liable to pay appropriate Customs duty on the quantity of plastic waste, metallic waste and cloth waste and cleared under 23 Bills of Entry.
30. As already explained above, the contraries of 2468.057 MTs of Plastic Waste/Scrap, 360.35 MTs of Metallic Waste and 103.280 MTs of Cloth Waste (Rags) covered under 52 Bills of Entry were not declared by the appellant. The appellants relied Hon'ble Apex Court decision in the case of State of Haryana v. Dalmia Dadri Cement Ltd. (supra). We find that the said decision relates to waiver of Sales Tax on sale of any goods to a public sector undertaking, i.e., Punjab Electricity Board supplying electricity to public for use by the PSU in generation or distribution of electricity. In the above context, the Apex Court held that the word "use" figuring in Sales Tax provisions means "intended for use" by the PSU. The present case is on a different footing where the exemption Notification No. 203/92 is specific with mandatory condition that the waste paper shall be used for manufacture of paper & paper board and the appellants executed an undertaking before Customs to that effect and the adjudicating authority rightly restricted the exemption benefit on waste paper and assessed the plastic & metallic waste on merit rate of duty. Therefore, ratio of the above Hon'ble Supreme Court decision relied by the appellant is clearly distinguishable and not applicable to the facts of the present case. In this regard, the Hon'ble Supreme Court in the case of CCE v. Hari Chand Shri Gopal - 2010(11)LCX0003 Eq 2010 (260) ELT 0003 (S.C.), has explained what is mandatory condition and what is directory condition of the notification and the condition must be obeyed/fulfilled as exactly stated in the notification. The ratio laid down by the Hon'ble Supreme is as under :-
"22. The law is well-settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the Statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the non-compliance of which
would not affect the essence or substance of the notification granting exemption. In Novopan Indian Ltd. (supra), this Court held that a person, invoking an exception or exemption provisions, to relieve him of tax liability must establish clearly that he is covered by the said provisions and, in case of doubt or ambiguity, the benefit of it must go to the State. A Constitution Bench of this Court in Hansraj Gordhandas v. H.H. Dave - (1996) 2 SCR 253, held that such a notification has to be interpreted in the light of the words employed by it and not on any other basis. This was SO held in the Context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of tin- notification, i.e., by the plain terms of the exemption.
23. Of course, some of the provisions of rectory m nature and some are of mandatory in nature. A distinction between pro visions of statute which are of substantive character and were built in with certain specific objectives of policy, on the one hand, and those which arc merely procedural and technical in their nature, on the other, must be kept clearly distinguished. In lata Iron and Steel Co. Ltd. (supra), this Court held that the principles as regard construction of an exemption notification are no longer res integra; whereas the eligibility clause in relation to tm exemption notification is giv en strict meaning wherefor the notification has to be interpreted in terms of its language, once an assessee satisfies the eligibility clause, the exemption clause therein may be construed literally. An eligibility criteria, therefore, de serves a strict construction, although construction of a condition thereof may be given a liberal meaning if the same is directory in nature. Doctrine of substantial compliance and 'intended use':
24. The doctrine of substantial compliance is a judicial invention, equita ble in nature, designed to avoid hardship in cases where a partv does all that can reasonably expected of it, but failed or faulted in some minor or in consequent aspects which cannot be described as the "essence" or the "sub stance" of the requirements. Like the concept of "reasonableness", the ac ceptance or otherwise of a plea of "substantial compliance" depends upon the facts and circumstances of each cist1 and the purpose and object to be achieved and the context of the prerequisites which are essential to achieve the object and purpose of the rule or the regulation. Such a defence cannot be pleaded if a clear statutory prerequisite which effectuates the object and the purpose of the statute has not been met. Certainly, it means that the Court should determine whether the statute has been followed sufficiently so as to carry ut the intent for which the statute was enacted and not a mirror image '.ype of strict compliance. Substantial compliance means "ac tual compliance in respect to the substance essential to every reasonable ob jective of the statute" and the court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed. Fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance of an enactment is insisted, where mandatory and directory requirements are lumped together, for in such a case, if mandatory requirements are complied with, it will be proper to say that the enactment has been substantially complied with notwithstanding the non compliance of directory requirements. In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit
procedurally faulty. The doctrine of substantial compliance seeks to preserve the need to comply strictly with the condition* or requirements that are important to invoke a tax or duty exemption and to forgive non-compliance for either unimportant and tangential requirements or requirements that are so confusingly or incorrectly written that an earnest effort at compliance should be accepted. The test for determining the applicability of the substantial compliance doctrine has been the subject of a myriad of cases and quite often, the critical question to be examined is whether the requirements relate to the "substance" or "essence" of the statute, if so, strict adherence to those requirements is a precondition to give effect to that doctrine. On the other hand, if the requirements are procedural or directory in that they are not of the "essence" of the thing to be done but are given with a view to the orderly conduct of business, they may be fulfilled by substantial, if not strict compliance. In other words, a mere attempted compliance may not be sufficient, but actual compliance of those factors which are considered as essential."
The ratio of the above decision 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, .160.35 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, by respectfully following the above Apex Court's decision, we are of the considered view that 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.
31. On the classification issue, the appellants contended that Chapter Heading 4707 90 00 of CTH covers "unsorted waste and scrap" and as per HSN Explanatory Notes read with Interpretative Rules of classification of goods, other contraries cannot be classified or assessed separately and as what is imported is mixed waste paper and rightly classifiable under Chapter Heading 4707 as the percentage of contraries is negligible. It is relevant to place the HSN 4707 which reads as under :-
47.07 - Recovered (waste and scrap) paper or paperboard (+) 4707.90 Oilier, including unsorted -waste and scrap Waste of paper or paper board covered by this heading includes, shavings, cuttings, clippings, torn sheets, old newspapers and journals, proof-sheets, printers' rejects and similar material. The heading also covers scrap articles of paper or paperboard. Such waste and scrap is normally used for pulping and is often presented in compressed bales, but it should be noted that its possible use for other purposes (e.g. packing) does not exclude its classification in this heading. Paper wool, however, even if manufactured from waste paper, is Excluded (heading 48.23) The heading also excludes waste and scrap of paper or paperboard, containing precious metal or precious metal compounds, of a kind used principally for the recovery of precious metal, e.g., waste and scrap photographic paper or paperboard containing silver or compounds thereof (heading 71.12)
Sub-heading Explanatory Note Sub-headings 4707.10, 4707.20 and 4707.30 Although, in principle, sub-headings 4707.10, 4707.20 and 4707.30 cover sorted waste and scrap, classification in anyone of these subheadings is not affected by the presence of small quantities of paper or paperboard of any other subheading of heading 47.07
32. As seen from the above, the item "waste of paper" or "paperboard" imported under Chapter Heading 4707 includes shavings, cuttings, clippings, torn sheets, old newspapers and journals, proof-sheets, printers' rejects and similar material and this heading also covers scrap articles of paper or paper board. It is amply clear from the HSN Explanation that sub-heading 4707.90 covers - "Other" including unsorted waste and scrap. Section X and Chapter 47 of CTH covers only "Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paper board". If the Section X and Chapter 47 description and sub-heading 4707 read harmoniously it is evident that what is covered under the main Heading 4707 and chapter subheading under 4707 90 00 is only "waste and scrap of paper or paper board". The word used "unsorted waste and scrap" under Chapter Heading 4707 90 00 only relates to unsorted waste paper of Headings 4707 10, 4707 20, 4707 30 and which are mixed and unsorted and it does not cover unsorted waste paper mixed with other materials such as plastics and metallic waste and rags. The appellant's reliance on the ratio of the Hon'ble Supreme Court in the case of Dunlop India Ltd. and Madras Rubber Factory Ltd. (supra) is misplaced in view of above fact findings in the present case and clearly distinguishable. The above case relates to classification of V.P. Latex and as to whether it is to be classified as raw rubber, whereas the present case relates to plastic scrap, metallic scrap imported and same is not declared by the appellants but cleared as waste paper. Therefore, there is no merit in the appellant's claim. Accordingly, we hold that the plastic waste and scrap, metallic waste, cloth waste (rags) are rightly classifiable under appropriate sub headings of Chapters 39, 73, etc., of CTH respective- 33. As regards misdeclaration and suppression of facts and invoking extended period, the appellants contended that they have correctly declared in the Bills of Entry and other import documents as waste paper as per the purchase order and invoice and cleared the same which was in the knowledge of Customs. They also contended that they have specifically declared in the Bills of Entry as "mixed paper sorting grade 5.01 or sorted grade 5.01" and also contended that sorting grades contains 10% "out throws" which is permissible as per the European standards. We find that the adjudicating authority in his findings at Para 12 has dealt in detail on the mentioning of "10% out throws" and the term used "mixed paper sorting Grade 5.01". The same is reproduced as under :- "In the import documents, there was a mention of 10% outthrows of the to-tal declared quantity. As per the European/Australian standards, the term "Outthrows" have been defined as "all papers that are so manufactured or treated or are in such form as to be unsuitable for consumption as the grade specified." In the instant case, plastic waste and scrap, metallic waste, etc., were segregated from the mixed waste paper-and they do not fall under the category of "outthrows" as the same were not paper. As per the European list of standard grades, "Mixed paper and board 5.01" shall consist of unsorted paper and board, separated at source."
34. It is apparent from the above fact that the term used "outthrows" represents only paper unsuitable for consumption and does not relate to plastic scrap & metallic scrap, etc. Similarly, as per European Standards "Mixed Paper Grade 5.01" relates to unsorted paper & paperboard. Therefore, we find that as rightly held by the adjudicating authority the plastic scrap and metallic scrap, etc., cannot be treated as mixed waste paper and the appellants failed to declare these items before customs clearance. Further, on perusal of the con tract/purchase order P.O. No. 32/302921, dated 20-3-2003, enclosed in pages 143 to 152 of Vol.-II of Paper Book, we find the appellants have entered into contract with overseas supplier for supply of imported waste paper/pulp, waste paper - co-mingled krebside super mix. Clause (1) of the terms and conditions is repro duced as under: 1. MATERIAL SPECIFICATON TO BE STRICLY FOLLWOED AND NON FIBER CONTRARIES NOT ACCEPTABLE. MATERIAL SHOULD NOT HAVE UNSLUSHABLE FIBER, PLASTICS, WAX COATED PAPER AND POLY IMPORTED WASTE PAPER/PULP LAMINATED WASTE AND OTHER CONTRARIES. WE RESERVE OUR RIGHTS TO CLAIM FROM DAMAGES CAUSED TO OUR PROCESS MACHINE APART FROM THE LOSS ON ACCOUNT OF PRODUCTION AND MATERIAL LOSS BOTH, RAW MATERIAL FINISHED GOODS. 35. From the above clause, it is abundantly clear that it is strictly stated in the above clause that non-fibre contraries are not acceptable and materials should not have unslushable fibre, plastics, wax coated paper and poly imported waste paper/pulp, whereas we find that in spite of the above specific conditions, the appellants have violated their own terms and conditions of the contract and deliberately not declared non-fibre contraries, plastic scrap and other scraps in their Bill of Entry. Further, on perusal of Bill of Entry No. 636370, date 31-5-2004, the appellants imported "Mixed Paper" and on examination it contained waste paper and plastic waste/scrap and the same was classified under Chapter Head ing 4707 90 00 and Chapter 39159029 respectively and appellants themselves had paid appropriate duty on plastic scrap whereas in all the subsequent imports of 17 Bills of Entry which are annexed as SI. Nos. 31 to 52 in the SCN they failed to de clare the non-contraries, i.e., plastic waste and scrap. Therefore, appellants have not only flouted their own terms and conditions of contract and imported the goods by not declaring it as "plastic waste and scrap" and they are fully aware that the consignments contained plastic scrap and other scrap but they have de liberately declared the goods as "waste paper" and not paid appropriate duty on the non-fibre contraries and availed the concessional rate of duty under the above notifications.
36. Further, we find that appellants failed to intimate the Customs au thorities on their activity of sorting of the imported goods into fibre and non- fibrous contents through M/s. White Star Fibres Ltd. and the quantity of plastic scraps and other scraps recovered and sold in the domestic market. But for the detection by the investigation agency, this would not have come to the light. Ap pellant's contention that they have intimated the Central Excise authorities about the quantity of plastic waste and scrap for issuing end-use certificate is not rele vant. As per the condition of the notification appellants failed to inform the cus toms authorities where the appellants availed the benefit. Therefore, the adjudi cating authority has rightly restricted the exemption benefit only to the quantity of fibre content of 17,901 MTs of fibre contraries and correctly demanded duty on the non-declared items of plastic waste and metallic scrap and cloth waste (rags) by invoking Section 28 of the Customs Act.
37. It is relevant to state that both supplier of the goods and the appellants were fully aware of the facts that the imported goods did contain non-contraries but deliberately chosen not to declare the same and failed to pay appropriate customs duty. As rightly stated by the adjudicating authority in his findings at Para 10 that appellants sold the plastic scrap, metallic waste & cloth waste to the domestic market on the value much more than the value of the imported waste paper with deliberate intention to evade payment of duty on non-fibre contraries. The above facts clearly established the misdeclaration and suppression of facts with intent to avail concessional rate of duty and with intention to evade payment of customs duty on the plastic scrap, metallic scrap & cloth waste (rags). The mens rea is proved beyond doubt and ingredients of Section 28 is satisfied tor invoking extended period. Therefore, appellants relying on the Hon'ble Supreme Court decision in the case of Unhuorth Textiles I,til. v. CCE, Rai~ pur (supra), Chamundi Die Cast Private I til. v. CCE, Bangalore (supra), Larsen & Toubro Ltd. v. CCE (supra), Primela Sanitary Prod nets Put. Ltd. v. CCE (supra), Copal Zarda Udyog v. CCI' (supra), Pushpam Pharmaceuticals Co. v. CCE and Padmini Products v. CCE (supra), against the suppression of facts is clearly distinguishable to the facts of this case as already discussed above and all the ingredients for wilful suppression of facts is established beyond doubt. The ratio of the above Supreme Court decisions are not applicable to the present case. Therefore, invoking the extended period under Section 28 is full}- justified and well within the law. Correspondingly penal provisions invoked under Section 114A is also fully justified. The appellants' relying Hon'ble Madras High Court decision in their own case reported as ITC Ltd. v. Norasia Container Lines Ltd. - 2008(11)LCX0388 Eq 2009 (247) ELT 0060 (Mad.), is only in favour of the Revenue where the Hon'ble High Court clearly directed the appellant to re-export the municipal waste imported into India.
38. The classification of plastic waste and scrap, metallic waste, cloth waste (rags) are rightly classifiable under Chapter 3915.90, Chapter 7204.30 and Chapter 6310.90 and chargeable to duty on merits. The valuation adopted and rejection of end-use certificates is liable to be upheld. In view of above facts, the demand confirmed by the adjudicating authority is liable to be upheld. Since the plastic waste and scrap is otherwise a restricted item under Foreign Trade Policy the same are liable for confiscation. The order of confiscation of the seized goods under Section 111(d) of the Customs Act and imposition of redemption fine and penalty under Section 114A of the Customs Act is liable to be upheld.
39. In view of the foregoing discussions, we hold that -
(a) The demand of duty on the non-declared items viz. plastic waste and scrap, metallic scrap, cloth scrap (rags) as confirmed in the impugned order is upheld.
(b) Confiscation of the goods under Section 111(d) and redemption fine in lieu thereof is upheld.
(c) Penalty on the appellant under Section 114A is upheld.
40. Accordingly, the impugned order is upheld and the appeal is dis missed. (Pronounced in Court on 7-10-2015)
Condition
No.