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TMI Blog2023 (9) TMI 1392X X X X Extracts X X X X X X X X Extracts X X X X ..... 4001 and 4002 and its tariff entries, relative Chapter Note 5(A), inasmuch as there is presence of pigments/colouring matter, carbon black and accelerators in the imported goods, it does not merit classification under heading 4001 as well as 4002. The imported goods is presented in granules of size 2mm to 4mm which is one of the primary form and are being used for outdoor rubber tiles, indoor rubber mats, rubber pavers etc. and thus are covered under chapter heading 4003. The relevant import policy for goods of chapter heading 4003 are Free and there are no restrictions on import. Thus, the impugned order proposing absolute confiscation of imported goods classifying the imported goods under tariff item 4004 0000 is not legally sustainable. From the plain reading of the entry in the restrictions placed under Basel No. B 3080 of Part-B to Schedule III, it is clear that this entry do not cover the granules of rubber derived from truck tyres. The Prior Informed Consent procedure and permission to be obtained by the importer is applicable only to waste, parings and scrap of rubber . Hence, even otherwise, irrespective of the policy condition not being applicable to imported goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai-II. Further, the department also filed an appeal against the redemption fine option given by the original authority, seeking for absolute confiscation of the imported goods. The learned Commissioner (Appeals), after giving a personal hearing to the appellants on 21.02.2019, had passed the impugned order dated 25.03.2019, modifying the original authority s order in absolute confiscation of the goods and deleting the option given for redemption fine to the appellants. Further, the order for reclassification of the goods under Customs tariff item 4004 0000 and imposition of penalty on the appellants was upheld. Being aggrieved against the impugned order, the appellants have preferred this appeal before the Tribunal. 3. The learned Advocate appearing for the appellants stated that the imported goods are not waste, parings and scrap as described in Chapter Note 6 to Chapter 40, inasmuch as these are not arising from the manufacture or working of rubber and rubber goods, that are definitely not usable as such because of cutting-up, wear and other reasons; on the contrary these are produced through a detailed manufacturing process including mechanical process of pulverization, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Commissioner (Appeals) has stated that the issue under dispute to be decided by him are as follows: The relevant paragraph 10 of the impugned order, for ease of reference, is extracted as below: 10. I have carefully gone through the appeal papers and submissions made during personal hearing. The issues to be decided in the appeals No.64 211/2019 are: (i) whether the imported goods i.e., Colour Rubber Granules are classifiable under tariff item 40021990 as claimed by the applicant or under tariff item 40040000 as ordered by the department. (ii) whether the imported goods fall under the category of Restricted goods as per FTP 2015-20 and (iii) in case of restricted goods, can redemption fine be imposed for re-export only. The learned Commissioner (Appeals) in the impugned order had absolutely confiscated the imported goods and confirmed the reclassification of goods under tariff item 40004 0000, besides upholding imposition of penalties on the basis of following findings: (i) The imported goods i.e., Coloured Rubber Granules are derived from truck tyres obviously worn-out or not usable and prepared after many processes. Hence, it is clear that the imported g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40021910 --- Oil extended styrene butadiene rubber Free 40021920 ---Styrene butadiene rubber with styrene content exceeding 50percent Free 40021930 ---Styrene butadiene styrene oil bound copolymer Free 40021990 ---Other Free 40030000 Reclaimed rubber in primary forms or in plates, sheets or strip. Free Natural rubber will not be allowed for import in this heading. 40040000 Waste, parings and scrap of rubber (other than hard rubber) and powders and granules obtained therefrom. Restricted Import of used rubbe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lasticisers or extenders (except mineral oil in the case of oilextended rubber), fillers, reinforcing agents, organic solvents or any other substances, except those permitted under (B); Further, in the impugned order it had been elaborately discussed about the production process of imported goods at paragraph 13 to 15, to state that the Coloured Rubber Granules having size of 2mm to 4mm are derived from used truck tyres, by subjecting to various processes explained therein as the truck tyres are cut, ground, shredded; steel and fibre are extracted; after de-vulcanization, carbon black oxide, calcium carbonate curing agent and synthetic rubber are mixed; after thermal process, curing etc. pigment and PH binders are added to make the colourful granules. Further, the imported goods are not just a mixture of Styrene Butadiene Rubber with any other natural rubber of heading 4001. For these reasons the imported goods are to be treated as finished goods instead of raw rubber in any primary forms. Thus by the scope of coverage of the chapter heading 4001 and 4002 and its tariff entries, relative Chapter Note 5(A), inasmuch as there is presence of pigments/colouring matter, carbon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out rubber tyres not suitable for retreading and scrap obtained from such worn-out rubber tyres, usually by the following processes: (a) Cutting the tyre, with a special machine, as close as possible to the tringle bead wires or the heel. (b) Splitting to remove the tread. (c) Cutting into pieces. The heading excludes used tyres suitable for retreading (heading 40.12). (3) Powders and granules obtained from goods of (1) and (2) above. These consist of ground waste of vulcanised rubber. They may be used as a filler in road surfacing materials or in other rubber based compounds or for moulding directly into articles not requiring great strength. The heading also excludes waste, parings, scrap, powders and granules of hard rubber (heading 40.17). 11. As the imported goods are derived from used tyres, these are definitely not obtained from the manufacture or working of rubber so as to consider classifying the first category of goods explained at (1) above under HS explanatory notes to chapter heading 4004. Further, as the imported goods are admittedly in the nature of finished rubber granules obtained through a series of manufacturing pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... something that is either reused in its same form for either a new purpose or exactly what it was originally intended for. In terms of Chapter Note 3 to Chapter 40, primary forms applies only to specific forms of rubber and this includes granules . The extract of the said Note is below: 3. In headings 4001 to 4003 and 4005, the expression primary forms applies only to the following forms: (a) Liquids and pastes (including latex, whether or not prevulcanised, and other dispersions and solutions); (b) Blocks of irregular shape, lumps, bales, powders, granules, crumbs and similar bulk forms. The imported goods is presented in granules of size 2mm to 4mm which is one of the primary form and are being used for outdoor rubber tiles, indoor rubber mats, rubber pavers etc. and thus are covered under chapter heading 4003. The relevant import policy for goods of chapter heading 4003 are Free and there are no restrictions on import. Thus, the impugned order proposing absolute confiscation of imported goods classifying the imported goods under tariff item 4004 0000 is not legally sustainable. 13. It is also of importance to note that reclaimed rubber is extensivel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Environment, Forest and Climate Change along with the application. (2) For the import of other wastes listed in Part D of Schedule III, the importer shall not require the permission of the Ministry of Environment, Forest and Climate Change. However, the importer shall furnish the required information as per Form 6 to the Customs authorities, accompanied with the following documents in addition to those listed in Schedule VIII, wherever applicable. For used electrical and electronic assemblies listed at serial numbers 4 (e) to 4(i) of Schedule VIII (Basel No. B1110), there is no specific requirement of documentation under these rules: (a) the import license from Directorate General of Foreign Trade, if applicable; (b) the valid consents under the Water (Prevention and Control of Pollution) Act, 1974 (25 of 1974) and the Air (Prevention and Control of Pollution) Act, 1981 (21 of 1981)and the authorisation under these rules as well as the authorisation under the EWaste (Management and Handling) Rules, 2011, as amended from time to time, whichever applicable; (c) importer who is a trader, importing waste on behalf of actual users, shall obtain one time authorisation in Form 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nied with the movement document as given in Form 6 and the test report of analysis of the waste, consignment, wherever applicable, from a laboratory accredited or recognised by the exporting country. In case of any doubt, the customs may verify the analysis. SCHEDULE III [See rules 3 (1) (17) (iii), 3 (23), 12, 13 and 14] Part A List of hazardous wastes applicable for import and export with Prior Informed Consent [Annexure VIII of the Basel Convention*] .. Part B List of other wastes applicable for import and export and not requiring Prior Informed Consent [Annex IX of the Basel Convention*] Basel No. Description of wastes (1) (2) B1 Metal and metal-bearing wastes B2 Wastes containing principally inorganic constituents, which may contain metals and organic materials B3 Wastes containing principally organic constituents, which may contain metals and inorganic materials B3080 Waste parings and sc ..... 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