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2024 (2) TMI 778 - HC - CustomsLevy of CVD - rubber scrap imported by the respondent - rubber scrap imported by the respondent herein is a different commercial commodity that has emerges as a result of manufacture / processing of old tyres and just because the respondent terms the process as cutting of old tyres into three pieces, it does not go out of ambit of manufacture - twin test of manufacture and marketability - HELD THAT - The Respondent herein was faced with identical issues in various other ports, including Delhi. In a writ petition filed by them before the Delhi High Court, in TINNA RUBBER AND INFRASTRUCTURE LTD. VERSUS UNION OF INDIA AND ANR. 2014 (12) TMI 1279 - DELHI HIGH COURT , a direction was issued to CBEC to consider the representation of the respondent herein keeping in view the decision of the Hon'ble Supreme Court in HYDERABAD INDUSTRIES LTD. VERSUS UNION OF INDIA 1999 (5) TMI 29 - SUPREME COURT . Pursuant thereto, the Tax Research Unit (TRU), CBEC vide letter dated 02.01.2015 clarified that Tyre Scrap cut into two or three pieces are chargeable to CVD. The respondent challenged the said circular / clarification before the High Court of Delhi. The said Circular was set aside by Full Bench of the Delhi High Court TINNA RUBBER INFRASTRUCTURE LIMITED VERSUS UNION OF INDIA ANR. 2017 (5) TMI 183 - DELHI HIGH COURT and it was held that imposition of 12% CVD on cut pieces of used tyres and tubes is ultra vires the Customs Tariff Act (CTA). In the light of the subsequent development viz., the order of the Hon'ble Supreme Court, whereby the Order of the Delhi High Court was set aside as incomplete adjudication, the very foundation on the basis of which the impugned order of the Tribunal was made, no longer survives and thus, the same is liable to be set aside. In view of the same, the impugned order of the Appellate Tribunal is set aside and the matters remanded for fresh consideration on merits and in accordance with law, after affording reasonable opportunity of being heard to the respondent herein. Appeal disposed off by way of remand.
Issues Involved:
The judgment involves the following Issues: 1. Whether the Tribunal was justified in allowing the appeal of the assessee regarding the liability to pay CVD on imported rubber scrap. 2. Whether the Tribunal erred in not deciding the issue on merits and following a judgment that was later set aside by the Supreme Court. 3. Whether the Tribunal failed to consider that the imported rubber scrap was a different commercial commodity resulting from the processing of old tires. 4. Whether the Tribunal overlooked the compliance with the twin test of manufacture and marketability in determining the liability of the imported rubber scrap to CVD. Issue 1: The respondent imported Tyre scrap cut into two or three pieces for use in manufacturing Crumb Rubber Powder or Crumb Rubber Modified Bitumen for road laying. The respondent claimed 'Nil' CVD rate, leading to payment under protest and subsequent appeals. The Appellate Tribunal allowed the appeals, which were challenged by the Revenue in the present batch of appeals. Issue 2: The respondent faced similar issues in other ports, including Delhi, where a Circular was set aside by the Delhi High Court, declaring the imposition of 12% CVD on cut pieces of used tires as unlawful. The Appellate Tribunal's order in the present case followed the Delhi High Court's decision, setting aside the Commissioner's order. Issue 3: The Revenue appealed to the Supreme Court against the Delhi High Court's decision, which was set aside as incomplete adjudication. Consequently, the Appellate Tribunal's order was deemed unsustainable, leading to the remand of the matters for fresh consideration. Conclusion: The judgment addressed the issues surrounding the liability of the imported rubber scrap to CVD, considering previous decisions and subsequent developments. The Tribunal's decision was set aside due to incomplete adjudication, leading to a remand for fresh consideration in accordance with the law. The substantial questions of law were answered in favor of the Revenue, with no costs imposed.
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