Not Enough Evidence to Prove Illegal Procurement of Plastic Scrap from Nepal: CESTAT quashes Confiscation Order, Redemption Fine and reduces Penalty [Read Order]

In a recent ruling, the Kolkata bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) quashed the confiscation order and redemption fine, while reducing the penalty, stating that there was not enough evidence to prove the illegal procurement of plastic scrap from Nepal

The present Assessee Bindeshwari Poddar, who is the owner of M/s. Rachna Enterprises came forward to claim the ownership of the seized goods (except plastic granules) on the ground that the goods in question were legally procured and imported from Nepal under Bill of Entry No.5638434 dated 15.06.2016. Since the goods in question had already suffered duty, they submitted that the goods are not liable for seizure or confiscation. After due process, the lower authorities confirmed the demand.

Towards the seized scrap valued at Rs.2, 16,180/-, the Adjudicating authority imposed a redemption fine of Rs.50,000/-. Towards seized plastic granules, weighing 2323 Kgs., valued at Rs.1,16,150/-, he imposed a redemption fine of Rs.20,000/-. He also confiscated the vehicle valued at Rs.7,50,000/- and gave an option to the owner to redeem the same on payment of redemption fine of Rs.1,30,000/-. The vehicle owner Shri Abhay Kumar was imposed with a penalty of Rs.20,000/-. The present Assessee Bindeshwari Poddar was imposed with a penalty of Rs.14,854/-. The owner of the vehicle has not preferred any Appeal. 

Mr. Atika Sumran Ahmed representing the assessee submitted that initially they had not claimed the ownership of the granules weighing 2323 kgs. Valued at Rs.1, 16,150/-. However, since they are in the business of plastic goods, they have paid the redemption fine of Rs.20, 000/- and are ready to pay the relevant duty on the same. 

The bench found that documentary evidence clarifies that the assessee had imported the 11,000 kgs. on 15.06.2016 vide Bill of Entry No.5638434, which is also affirmed by the Asstt. Commissioner and the invoice raised by them is for 10,000 kgs., whereas, the goods in question were weighted at 9388 kgs.. Reading together all these documents, further find that enough evidence has been provided by the Appellant to the effect that these are not procured illegally from Nepal, but are legally procured goods. Therefore, set aside the confiscation order and the redemption fine of Rs.50,000/- imposed on the scrap valued at Rs.2,16,180/-. The Revenue is directed to release the plastic scrap to the Appellant forthwith”.

Further the bench held that “I find that in respect of plastic scrap, there is no case made out against the assessee. However, in case of plastic granules, the assessee though initially has not claimed the ownership, but has come forward to redeem the same on payment of redemption fine and the relevant payment of the relevant Customs duty. Based on these facts, the penalty of Rs.14, 854/- is reduced to Rs.5, 000/- (Rupees Five Thousand only)”. 

The Assessee has made a Security Deposit of Rs.64, 854/-. This amount should be utilized to appropriate the redemption fine of Rs.20,000/- in respect of granules and the penalty imposed on  Bindeshwari Poddar and against the balance Customs duty and interest to be paid by the assessee. Accordingly, The appeal was disposed of.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates