2025 (3) TMI 1076 - HC - Customs

Restricted import or not - Scope of N/N. 12/2015-20 dated 12th June 2020 - Brand New All Steel Radial Mining tires fall within the purview of said notification or not - amendment to import policy by the notification for various goods falling under Customs Tariff Heading (CTH) 4011 from Free to Restricted - HELD THAT - In 2024 the disputed goods were tested by IRMRA. However the tests were carried out on specific assumptions / requests of the DRI. The letter by DRI requesting the IRMRA to test the subject goods as per specific assumptions is neither on record nor provided to the Respondents when specifically asked. As per the tests reports of the IRMRA the tests were not conducted on the basis of IS 15636 2022. In other words despite the tires being categorized as D marking (i.e. speed not to exceed 65 km/hr) the disputed goods were tested as J/K category (i.e. speed not to exceed 100 km/hr or 110 km/hr). The tests shall be conducted by Indian Rubber Manufacturers Research Association ( IRMRA ). This is on account of the fact that in 2022 similar tests were conducted by IRMRA (in terms of IS 15636 2022) when samples were drawn and forwarded by Central Intelligence Unit ( CIU ). IRMRA vide the test reports dated 15th September 2022 certified that the intended use of the tires was mining applications. Apart from the above tests the IRMRA shall carry out any other test that it deems fit to determine whether the imported tires are of a kind used on construction mining or industrial handling vehicles and machines. In the event the IRMRA also decides to do a speed test on the tires the test report should indicate clearly that at what speed the tires were tested and the duration of the test as well as the wear and tear if any on the said tires. Conclusion - IRMRA shall conduct specific tests to determine the classification of the tires as Special-use or Normal-road-use . The results of these tests will inform the final determination of whether the tires fall under the restricted import category. Stand over to 15th April 2025.

ISSUES PRESENTED and CONSIDERED

The primary issue in this case is whether the "Brand New All Steel Radial Mining tires" (subject goods) fall under the purview of Notification No. 12/2015-20 dated 12th June 2020, which amended the import policy for certain goods under Customs Tariff Heading 4011 from 'Free' to 'Restricted'. Specifically, the question is whether these tires need to comply with Bureau of Indian Standards (BIS) 15636, given their speed symbol marking and usage classification.

ISSUE-WISE DETAILED ANALYSIS

1. Legal Framework and Precedents

The legal framework revolves around Notification No. 12/2015-20, which mandates compliance with BIS 15636 for the import of certain radial tires. The BIS 15636:2022 outlines standards for different categories of tires, including "Normal-road-use" and "Special-use" tires. The case also references United Nations standards for pneumatic tires, which provide additional criteria for classifying tires as "Special-use".

2. Court's Interpretation and Reasoning

The Court examined whether the subject goods, marked with a speed symbol "D" (indicating speeds below 65 km/h), are excluded from the requirements of IS 15636:2022. The Court noted that IS 15636:2022 does not apply to tires with speed symbols corresponding to speeds below 80 km/h. Furthermore, the Court considered the classification of the tires as "Special-use" based on their tread pattern, tread depth, and sidewall thickness, as per both IS 15636:2022 and UN standards.

3. Key Evidence and Findings

Evidence included the speed symbol "D" on the tires, which indicates a maximum speed below 65 km/h, thus potentially excluding them from IS 15636:2022. The Court also considered previous tests conducted by the Indian Rubber Manufacturers Research Association (IRMRA), which were not based on IS 15636:2022 standards. The IRMRA had previously certified similar tires for mining applications.

4. Application of Law to Facts

The Court applied the standards in IS 15636:2022 and UN guidelines to determine the classification of the tires. It emphasized the need for specific tests to ascertain whether the tires qualify as "Special-use" or "Normal-road-use". The Court directed that tests be conducted to evaluate the tread pattern, tread depth, and sidewall thickness to make this determination.

5. Treatment of Competing Arguments

The Respondents argued that the tires do not fall under the restricted category due to their speed symbol and intended use. The Court acknowledged these arguments and ordered further testing to conclusively determine the classification of the tires. The Respondents also highlighted procedural issues with previous tests conducted by IRMRA, which were addressed by the Court's directive for new tests.

6. Conclusions

The Court concluded that further testing by IRMRA is necessary to determine whether the tires are "Special-use" or "Normal-road-use". This determination will affect whether the tires fall under the restricted import category as per Notification No. 12/2015-20.

SIGNIFICANT HOLDINGS

The Court held that the speed symbol "D" indicates that the tires are not subject to IS 15636:2022, as they are designed for speeds below 80 km/h. However, the Court required additional testing to determine if the tires meet the criteria for "Special-use" classification, which would exempt them from the restricted category.

Core Principles Established

The judgment establishes that the classification of tires under import regulations depends on both speed symbol markings and the intended use, as defined by IS 15636:2022 and UN standards. It underscores the importance of accurate testing to determine compliance with import restrictions.

Final Determinations on Each Issue

The Court ordered IRMRA to conduct specific tests to determine the classification of the tires as "Special-use" or "Normal-road-use". The results of these tests will inform the final determination of whether the tires fall under the restricted import category. The Court set a deadline for the tests and requested a report to be submitted in a sealed cover.

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