2014 (11) TMI 568 - AT - Customs

Confiscation of used tyres u/s 111(d) - Hazardous waste - Held that - It is seen from the TNPCB report that the goods fall under Waste Pneumatic Tyres for direct reuse. The adjudicating authority observed that these imported goods are likely to cause danger to health and environment. The adjudicating authority proceeded on the basis of TNPCB report stating that these goods are waste pneumatic tyres and therefore, the goods were imported in violation of the provisions of Hazardous waste (Management, Handling and Transboundary) Rules, 2008. But, the adjudicating authority had not considered the report as a whole that the imported pneumatic tyres are also for direct reuse. The Commissioner (Appeals) had discussed the classification of the goods in detail. In our considered view, it is not necessary to go into the classification of the goods under the Customs Tariff Act, in so far as it is to be determined as to whether the imported goods are in the nature of waste. No clear finding from both the sides that the imported goods are in the nature of used or waste. In our considered view, this should be examined by the adjudicating authority in the light of the decision of the Tribunal in the case of Universal (2013 (11) TMI 856 - CESTAT AHMEDABAD). Accordingly, we direct the adjudicating authority to examine all the issues to the extent of appeals filed by the three importers. - Matter remanded back - Decided in favour of assessee.

Issues Involved:
1. Classification of imported used pneumatic tyres.
2. Whether the imported tyres are waste or can be directly reused.
3. Compliance with Hazardous Waste (Management, Handling and Transboundary) Rules, 2008.
4. Requirement of BIS certification for imported used tyres.
5. Validity of the adjudicating authority's order of confiscation and re-export with redemption fine and penalty.

Issue-wise Detailed Analysis:

1. Classification of Imported Used Pneumatic Tyres:
The importers classified the tyres under CTH 40122020, arguing that they are used tyres suitable for direct reuse, not waste. The Revenue contended that the classification is irrelevant as the dispute concerns whether the tyres are waste. The Tribunal noted that the classification under the Customs Tariff Act is secondary to determining if the tyres are waste.

2. Whether the Imported Tyres are Waste or Can Be Directly Reused:
The TNPCB and Chartered Engineer's reports indicated that the tyres were used, not new, and suitable for direct reuse. The adjudicating authority, however, treated them as waste based on the TNPCB report, which also stated that import of waste tyres requires prior permission from the Ministry of Environment and Forests. The Tribunal highlighted the need to distinguish between tyres suitable for direct reuse and those classified as waste, which require disposal or recycling.

3. Compliance with Hazardous Waste (Management, Handling and Transboundary) Rules, 2008:
The adjudicating authority confiscated the tyres under Section 111(d) of the Customs Act, 1962, citing violations of the Hazardous Waste Rules. The Tribunal noted the TNPCB report's dual findings: the tyres were for direct reuse but also classified as waste requiring Ministry clearance. The Tribunal directed the adjudicating authority to re-examine the issue in light of the Universal Trading Company case, which dealt with similar circumstances.

4. Requirement of BIS Certification for Imported Used Tyres:
The Revenue argued that BIS certification was necessary, but the Tribunal referred to a CBEC instruction dated 12.07.2013, clarifying that BIS certification applies only to newly manufactured tyres and tubes, not used tyres. The Tribunal found merit in the importers' argument that BIS certification was not required for the imported used tyres.

5. Validity of the Adjudicating Authority's Order of Confiscation and Re-export with Redemption Fine and Penalty:
The adjudicating authority allowed re-export of the tyres with a redemption fine and penalty. The Tribunal, however, found no clear evidence from either side regarding the nature of the tyres (used or waste) and directed a re-examination by the adjudicating authority. The Tribunal emphasized the need for a proper hearing and a decision in accordance with the law, considering the Universal Trading Company case and the absence of a requirement for BIS certification.

Conclusion:
The Tribunal set aside the orders of the adjudicating authority and Commissioner (Appeals) and remanded the matter for re-examination. The adjudicating authority was directed to decide the case expeditiously, within three months, and provide a proper hearing to the importers. The Tribunal also clarified that BIS certification was not required for the import of used tyres as per the CBEC instruction.

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