2016 (12) TMI 470 - AT - Customs

Classification of goods - old and used tyres - classified under CTH 40122020 or under schedule III Part B- List of Hazardous Wastes Applicable for Import & Export of Hazardous Waste (Management, Handling & Transboundary Movement) Rules, 2008 at Basel No. B-3140 with description as Waste of Pneumatic Tyres which can be imported with the permission of Ministry of Environment and Forest - The Original Authority, therefore, ordered confiscation of the goods imported under Section 111(d) & (o) of the Customs Act, 1962 and gave an option to redeem the goods on payment of redemption fine of ₹ 3,40,000/- under Section 125 of the Customs Act, 1962 and ordered re-export of the same goods and also imposed penalty of ₹ 1,70,000/- on appellant under Section 112 (a) of Customs Act, 1962. Held that - I find that ordering of confiscation and again ordering re-export of confiscated goods is contrary to each other. On absolute confiscation, the goods became property of Government of India and appellant does not have any authority to export the same - confiscation of goods upheld with imposition of redemption fine of 15% of assessable value - imposition of penalty upheld to 10% of assessable value - the applicable duty on the assessable value shall be payable if the goods are taken/released on payment of Customs duty, redemption fine and penalty. The goods shall be released by completing customs formality within two weeks of payment of customs duty, redemption fine and penalty - appeal allowed - decided partly in favor of appellant.

Summary

Issues:
Classification of old and used tyres under hazardous waste rules, requirement of authorization for import, confiscation of goods, imposition of redemption fine, imposition of penalty.

Analysis:

1. Classification of Goods:
The appellant imported old and used tyres claiming classification under CTH 40122020, while the Revenue argued that these tyres fall under hazardous waste rules and require authorization for import. The Original Authority held that the appellant imported hazardous goods without the necessary authorization, leading to confiscation of the goods under Section 111(d) & (o) of the Customs Act, 1962. The Commissioner (Appeals) upheld this decision.

2. Grounds of Appeal:
The appellant challenged the decision based on the condition imposed for the import of second-hand tyres under Exim Code 401232020, arguing that the requirement for a special import license was contrary to the Foreign Trade Policy. They also emphasized that the consignment comprised reusable tyres with substantial residual life, not scrap, and therefore should not be considered hazardous waste.

3. Legal Precedent:
The appellant cited a previous tribunal order in a similar case, where goods under comparable circumstances were not considered hazardous waste and were allowed clearance on payment of redemption fine and penalty. The appellant argued that this precedent should apply to their case.

4. Tribunal Decision:
After reviewing the case records and the relied-upon legal precedent, the Tribunal found that the ordering of confiscation and re-export of goods was contradictory. The Tribunal modified the Order-in-Appeal and Order-in-Original to allow redemption of the goods on payment of a fine of 15% of the assessable value and imposed a penalty of 10% of the assessable value. The applicable duty was also upheld to be payable for the release of goods.

5. Conclusion:
The Tribunal partially allowed the appeal, upholding the confiscation of goods, imposition of redemption fine, and penalty, while ensuring the release of goods upon completion of customs formalities and payment of dues within two weeks. The Tribunal's decision clarified the classification and treatment of the imported old and used tyres, providing a resolution to the dispute between the appellant and the Revenue authorities.