2015 (11) TMI 1020 - AT - Customs

Import of restricted items being used tyres - Misdeclaration of goods - Undervaluation of goods - Confiscation of goods - Imposition of redemption fine and penalty - Captive consumption - Held that - As per ITC (HS) Classification the impugned goods are not freely importable under the Import and Export Policy by virtue of the fact that their value even after revision upward is less than US 25 per piece and to that extent the violation of Section 111(d) of the Customs Act is established making the goods liable to confiscation and consequently making the importer liable to penalty. - impugned goods do not figure in Part A of Schedule-III of the said Rules. The said list contains the description of goods import of which requires permission from the competent authority for their import. It is also seen that Part B of Schedule-III of the said Rules does not cover the impugned goods inasmuch as it covers only such waste of pneumatic tyres which do not lead to resource, recovery, re-cycling or direct reuse. The impugned tyres without any doubt are directly reusable and hence are clearly excluded from the said entry B-3140. Thus, the adjudicating authority is not correct to hold (as it did in para 5.20 of the impugned order) that Basel B-3140 covers all used tyres which lead to resource recovery, recycling, reclamation or direct us. Further the adjudicating authority in the said para 5.20 takes due note of the fact that goods listed in Part B do not require prior permission but comes to a finding that the impugned goods require permission of MoEF While the CPCB report is not conclusive, even if the tyres are taken to be used tyres (they admittedly are), the adjudicating authority has not disputed that they are directly usable and hence as discussed earlier, they are excluded from the scope of the said entry B-3140. Further, the impugned goods do not figure in Part A of the said Schedule-III which contains list of items requiring MoEF s permission for import. Incidentally, it may be pertinent to state that the fact that the impugned goods are not covered under the said Part-B does not mean that their import requires prior permission of MoEF, more so because they are not covered under the said Part-A. Thus, the adjudicating authority is not right in holding that the impugned tyres required permission of MoEF for import and therefore absolute confiscation ordered on that count is unsustainable. Regarding valuation - Adjudicating authority has systematically dealt with this issue, first coming to a finding as to why the transaction value was not acceptable and then re-determining the value as per the provision of Customs (Determination of Value of Imported Goods) Rules, 2007. We find that such re-determination of value was done on a rational basis and we do not find infirmity with regard thereto. Resultantly, the liability to confiscation also arises under Section 111(m) of the Customs Act, 1962 for mis-declaration of value. - we uphold the confiscation of the impugned goods under Section 111(d) and 111(m) of the Act ibid as also the upward revision of value. However, in the facts and circumstances of the case including the fact that the goods are awaiting clearance for so long, we allow redemption of the same on fine of 15% of the redetermined value. We also impose a penalty of 10% of the redetermined value under Section 112 of Customs Act, 1962 - Decided partly in favour of assessee.

Issues Involved:
1. Appeal against order in original dated 30.07.2014 regarding customs valuation and confiscation of imported goods.
2. Mis-declaration of value and classification of imported used tyres.
3. Requirement of permission from Ministry of Environment and Forest for import of impugned goods.
4. Consideration of additional evidence in the form of Bills of entry.
5. Confiscation, re-export, and penalty imposition under Customs Act, 1962.

Issue 1: Appeal against order in original dated 30.07.2014 regarding customs valuation and confiscation of imported goods:
The appeal was filed challenging the order that rejected the declared assessable value of imported goods and re-determined the value under Customs Valuation Rules, leading to absolute confiscation and imposition of a penalty. The appellants sought to produce additional evidence in the form of Bills of entry to show identical goods being imported and cleared for home consumption on redemption fine. The Tribunal allowed the miscellaneous application to produce additional evidence.

Issue 2: Mis-declaration of value and classification of imported used tyres:
The order was passed based on grounds that the imported goods were mis-declared in value and their classification as used tyres was restricted under the ITC (HS) classification. The appellants contended that the tyres were directly reusable and not covered under the hazardous waste list, thus not requiring permission for import. The Tribunal found that the impugned goods were not freely importable due to their value and upheld the re-determination of value but disagreed with the classification under hazardous waste rules.

Issue 3: Requirement of permission from Ministry of Environment and Forest for import of impugned goods:
The order cited the need for permission from the Ministry of Environment and Forest (MoEF) for import of the impugned goods under Hazardous Wastes Rules, 2008. The Tribunal disagreed with this conclusion, stating that the impugned goods did not require MoEF's permission as they were directly reusable and excluded from the specified list under the rules.

Issue 4: Consideration of additional evidence in the form of Bills of entry:
The appellants sought to produce Bills of entry to demonstrate similar goods being cleared for home consumption on redemption fine. The Tribunal allowed the production of additional evidence to support the appellants' case regarding the clearance of identical goods.

Issue 5: Confiscation, re-export, and penalty imposition under Customs Act, 1962:
The order had directed absolute confiscation of the goods, their re-export at the party's cost, and imposition of a penalty under the Customs Act, 1962. The Tribunal upheld the confiscation based on mis-declaration of value but allowed redemption of the goods on fine and imposed a penalty, considering the circumstances and previous rulings allowing clearance on redemption fine and personal penalty for similar goods.

This detailed analysis of the judgment covers the various issues involved, including the customs valuation, mis-declaration of goods, requirement of permission for import, consideration of additional evidence, and the confiscation and penalty imposition under the Customs Act, 1962.

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