Customs, Excise and Gold Tribunal - Delhi
Commissioner Of Customs vs Bhartiya Plastic Udyog on 4 August, 1998
Equivalent citations: 1999(107)ELT161(TRI-DEL)
ORDER K. Sankararaman, Member (T)
1. The appeal by the Commissioner of Customs II, New Delhi is directed against Order-in-Appeal No. 34-DLH/Cus./ICD/95, dated 31-10-1995 passed by the Commissioner of Customs (Appeals), New Delhi setting aside the Order-in-Original 10/95, dated 25-5-1995 passed by the Deputy Commissioner of Customs ICD, Tughlakabad, New Delhi whereby that authority had confiscated under Section 111(d) of Custom Act, 1962 a consignment of PVC Scrap imported by M/s. Bhartiya Plastic Udyog, who are respondents in the present proceedings but giving them the option to redeem them of payment of fine of Rs. 1,50,000/- besides imposing penalty of Rs. 50,000/- on them. The present appeal seeks the restoration of the order of the Deputy Commissioner of Customs by setting aside the order in appeal.
2. Supporting the grounds taken in the appeal, Shri T.A. Arunachalam learned Departmental Representative stated that the term Plastic scrap is synonymous with plastic waste. Plastic waste is covered by Paragraph 27(2) of the Handbook of Procedure Vol. I of Import Export Policy 1992-97 which has laid down that the import of all types of plastic waste shall not be permitted except against a licence. The price of the material imported was only US $ 160 Per Metric Tonne as against the price of US $ 870 to 950 Per Metric Tonne for PVC prime grade which goes to shows that it was only plastic waste that has been imported. He pleaded for the setting aside of the impugned order in appeal and the restoration of the order in original.
3. In reply Shri K. Kumar, learned Counsel for the respondent stated that the terms waste and scrap are not the same. In Paragraph 27(2) of the Import Trade Control Handbook, referred to in the impugned order, only waste is mentioned. They have imported PVC Flakes. The Technical opinion given by the Indian Institute of Technology after testing the goods is that PVC flakes imported can be considered as primary form of PVC plastic and can be used directly for different applications. The Collector (Appeals) has passed the impugned order in appeal after considering the said Test Report. Learned Counsel referred to two decisions of the Tribunal on the very same issue regarding the import of Plastic Scrap under Open General Licence (OGL) wherein it was held that Paragraph 27(2) of the ITC Handbook was not applicable for Plastic Scrap. The decisions are:
(i) Hemani Industries v. Commissioner of Customs -1996 (83) E.L.T. 617 and
(ii) Globe Sales v. Collector of Customs, Ahmedabad -1998 (99) E.L.T. 290 Learned Counsel submitted that these decisions support their case and pleaded that the department's appeal be dismissed.
5. Giving a rejoinder to the submissions of the learned Counsel for the appellant, Shri Arunachalam learned Departmental Representative stated that these decisions were in the facts and circumstances of those cases. Thus, in the Globe Sales case, the Tribunal noted that the department had not placed any evidence on record either to prove that waste and scrap are synonymous or the scrap imported by the appellants was actually not scrap but waste. It was in the absence of any positive evidence placed on record by the department that the Bench .did not see any reason to hold that the scrap imported by the appellant therein was not scrap but waste. In the present case the department has established that the material imported was waste by comparing its price with that of prime material which was US $ 870 to 950 per Metric Tonne as against US $ 160 per Metric Tonne at which the subject goods had been imported. Learned Departmental Representative reiterated the plea that the appeal be allowed.
6. I have considered the submissions. I have perused the record and the decisions cited. Both the decisions cited by the learned Counsel for the respondent directly deal with the same issue as to whether sub-paragraph (2) of Paragraph 27 of the Import Trade Control Handbook 1992-1997 will apply to Scrap of Plastics. The Deputy Collector had held in her order that Scrap and waste are synonymous. She had referred to certain decisions for her conclusion. There decisions are as follows :-
(i) Laxmi Narayan Ram Niwas v. Collector of Customs -1987 (32) E.L.T. 12 (Calcutta) High Court,
(ii) Goods Agrc Chemicals and Ors. v. Assistant Collector of Customs -1987 (32) E.L.T. 565 (Kerala).
(iii) V. Foam Ltd., Hyderabad v. Collector of Central Excise, Hyderabad - 1983 (14) E.L.T. 2502.
Out of these, the first judgment is in respect of Brass waste and Scrap which were held to be copper waste and Scrap. The issue whether waste is the same as scrap was not the issue before the Calcutta High Court. Hence, this judgment does not support the view taken by the Deputy Collector that plastic Scrap is the same as plastic waste. The second judgment which is by the High Court of Kerala was concerned with the question whether Copper Scrap was classifiable as copper in crude form to attract classification under Tariff Item 26A(1) of the Central Excise Tariff then in force. The third decision which is that of the Tribunal did not concern itself with the question of scrap vis-a-vis waste. It was held therein that cuttings and trimmings of polyurethane foam, though described as waste and Scrap, are smaller pieces of high quality and usable polyurethane foam and hence covered by the erstwhile Tariff Item ISA as polyurethane foams.
7. As against these decisions, cited in the impugned order, the two Tribunal decisions cited by Shri Kumar, Learned Counsel are concerned with the question whether Plastic Scrap is Plastic waste within the meaning of Paragraph 27(2) of the ITC Handbook 1992-1997 and hence not importable under OGL but requiring an import licence. The question was answered in favour of the importer and against the department. The Benches took note of the fact that while in sub-paragraph (1) of that Paragraph 27, both the expressions, waste and scrap are used, as permissible for import, the sub-paragraph (2) refers to only plastic waste. The conclusion has been drawn that Plastic Scrap is not hit by that sub-paragraph and hence does not require an Import licence. It has also been contended by the respondent that Chapter Note 7 of Chapter 39 of the Customs Tariff which covers Plastics as well as the Indian Trade classification for Import Trade Control Purposes which is based on the Harmonised system specifically provide that Heading No. 39.15 which cover waste, Parings and Scrap, does not apply to waste, Parings and Scrap of a single thermoplastic material transformed into primary forms. Thus, Scrap and waste transformed into primary form ceases to be Waste and Scrap. The goods imported are in the form of flakes. The certificate of I.I.T., New Delhi supports the case of the respondent. The case is also not distinguishable from the two decisions of the Tribunal referred to above on account of the price factor. The price of the material imported cannot be compared with the price of prime material. Whether flakes are obtained from Waste or Scrap, their price is bound to be less than that of prime material. Because of the price being lower, it cannot be held to be waste and hence hit by Paragraph 27(2) of the Import Trade Control Handbook.
8. For the foregoing reasons, I see no reason to interfere with the impugned order in original though, as contended in the appeal, it has not spelt out the reasons for the conclusion reached properly. That does not, however, detract from the finding. I uphold the order in appeal and dismiss the appeal.