Bharucha, J. - (1.) The Revenue is in appeal an order passed by the Customs, Excise and Gold (Control) Appellate Tribunal.
(2.) The respondent filed, for clearance for home consumption, seven bills of entry purporting to relate to polyethylene scrap. By reason of intelligence received that serviceable material was likely to be cleared by the respondent as scrap, the goods covered by the seventh bill of entry were examined by the Customs Authorities. It was found that what had been imported were plastic rolls of LDPE films of continuous printed jumbo size bags, plain carry bags and printed carry bags, all ready for use. The goods were seized. Statements were recorded under the provisions of Section 108 of the Customs Act, 1962, and an order was made on 8th March, 1994 by the Collector of Customs, Bombay. The order noted the correspondence between the respondent and its foreign suppliers, the statements that had been made and other material on record. It found that the respondent had sought to clear serviceable material as scrap. It required that the goods be assessed as serviceable material; that the value thereof be enhanced; that they be confiscated, with option to the respondent to redeem them on payment of a fine; and that the respondent pay a personal penalty.
(3.) Against the Collector's order the respondent preferred an appeal to the Tribunal. The judgment and order thereon is the subject-matter of this appeal. In its judgment the Tribunal referred to the submission made on behalf of the respondent that the goods had been imported for the purpose of recycling in the manufacture of mono filament yarn and the respondent was not interested in using the goods for any purpose other than as scrap. In order to establish the respondent's bona fides, its counsel submitted that the respondent was willing to have the goods mutilated at its own expense, and, in that context, referred to Section 24 of the Customs Act. The Tribunal observed that the purpose of the said provision was to ensure that where imported goods had more than one purpose, they were rendered unfit for use except for one purpose. In other words, the Tribunal said, where imported goods could be used as scrap or as serviceable material, it should be open to an importer who contended that the import was only for use as scrap to seek mutilation so that the goods could be used only as scrap and not as serviceable material. The Tribunal referred to the practice of permitting mutilation of serviceable garments which were claimed to have been imported as rags. The Tribunal was satisfied that the same procedure could be followed in the instant case, notwithstanding that rules had not been made under Section 24. Setting aside the order of the Collector, the Tribunal directed that the goods should be mutilated in such a manner that they could be used only for recycling and not for any other purpose.;