Since the EPA has taken a strong issue with the process of dumping the fuel on the ramp, the FAA now overlooks the process of dumping the fuel tested back into the tanks.
The FAA never condemned the practice, nor openly discouraged it. Many instructors and pilots, however, (myself included) do discourage it. The FAA isn't "overlooking" anything, as there is nothing to overlook.
Has anyone heard of any actions taken for dumping the fuel on the ramp?
Absolutely. The EPA made an example of Embry Riddle Aeronautical University by fining the university just shy of 25,000 dollars for pouring fuel sump samples on the ramp. ERAU, in turn, agreed to produce a public education program discouraging open disposal of fuel in exchange for the fines being dropped.
www.secureav.com/Comment-AMCC-V.b-Environmental.pdf
You can read the results at the above location, with the following excerpt concerning the specific action against and by ERAU:
Beyond the health, safety, and ethical reasons to exercise environmentally sound fueling practices are serious legal consequences for polluting. Consider, for example, the high-profile case at Embry-Riddle Aeronautical University in Daytona Beach, Florida. The University was fined $24,999 by the Florida Department of Environmental Protection for violating the Florida Resource Recovery and Management Act by failing “to implement a procedure to prevent the release of aviation fuel after inspecting for contaminants.” A Consent Order between the University and the government required Embry-Riddle to create fueling practices training materials, including a video. The Embry-Riddle matter likely foreshadows a trend: new and more far-reaching measures with strong penalties for aviation-related pollution.
If you cannot bring yourself to put it back into the plane, save it and put it in your car.
And destroy your catalytic converter in the process. Good idea.
I thought it to be an FAR and can't find that anywhere.
You cannot find it because there is not now, nor was there ever any such regulation in 14 CFR.