2016 (12) TMI 574 - 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 ₹ 2,75,000/- under Section 125 of the Customs Act, 1962 and ordered re-export of the same goods and also imposed penalty of ₹ 1,35,000/- 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:
1. Classification of imported old and used tyres under CTH 40122020.
2. Confiscation of goods under Section 111(d) & (o) of the Customs Act, 1962.
3. Requirement of authorization from DGFT and permission from Ministry of Environment and Forest for import.
4. Imposition of redemption fine and penalty under Customs Act, 1962.
5. Applicability of Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008.
6. Comparison with a previous Tribunal case regarding similar circumstances.

Detailed Analysis:
1. The appellant imported old and used tyres claiming classification under CTH 40122020. The Original Authority held that the tyres fell under Hazardous Wastes Rules, 2008, requiring authorization from DGFT and permission from Ministry of Environment and Forest. Confiscation was ordered under Section 111(d) & (o) of the Customs Act, 1962, with an option to redeem on payment of a fine.

2. The Order-in-Appeal upheld the confiscation, redemption fine, and re-export order. The appellant argued that the import was allowed under Exim Code 401232020 of the ITC (H.S.) classification and that the tyres were reusable, not scrap. The appellant also cited a previous Tribunal case where similar goods were allowed clearance with a redemption fine and penalty.

3. The Tribunal analyzed the case records and the cited case law. It found that absolute confiscation and re-export orders were contradictory. The Tribunal modified the orders to allow redemption of goods on a fine of 15% of the assessable value and imposed a penalty of 10% of the assessable value. The applicable duty was to be paid for release of goods within two weeks of payment.

4. The Tribunal's decision partially allowed the appeal, modifying the orders to uphold confiscation, allow redemption on a fine, impose a penalty, and require payment of applicable duty for release. The judgment clarified the application of rules and penalties in cases of imported goods, emphasizing compliance with classification and authorization requirements.