Custom, Excise & Service Tax Tribunal
Yes vs Represented By : Shri P.M. Dave & Shri ... on 24 September, 2013
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : C/10333 to 10338 of 2013 Arising out of : OIO Nos. KDL/Commr/48/2012-13 dated 09.01.2013, KDL/Commr/49/2012-13 and KDL/Commr/49/2012-13 both dated 10.01.2013. Passed by : Commissioner of Customs, Kandla For approval and signature : Hon'ble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. H.K. Thakur, Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Appellant (s) : M/s. Universal Trading Company Shri Mohd. Irfan, M/s. Imrose Traders Shri Mohd. Iqbal M/s. Nadiya Enterprises Shri Gulam Dastgir Kalubhai Sheikh Represented by : Shri P.M. Dave & Shri Paritosh Gupta, Advocates Respondent (s) : Commissioner of Customs, Kandla
Represented by : Shri K. Sivakumar, A.R. CORAM :
Hon'ble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. H.K. Thakur, Member (Technical) Date of Hearing : 24.09.2013 Date of Decision : 22.10.2013 ORDER No. ___________ /WZB/AHD/2013 Dated ___ Oct 2013 Per : Mr. H.K. Thakur;
Following appeals have been filed by the appellants against three different orders-in-original passed by Commissioner of Customs, Kandla where issue involved is the same and hence all the appeals are being disposed of by a common order:-
S/No Appeal No. Appellant OIO No. and date.
(i) C/10333/2013 M/s. Universal Trading Company KDL/Commr/49/2012-13 dated 10.01.2013
(ii) C/10334/2013 Mohd. Irfan
-do-
(iii) C/10335/2013 M/s. Nadiya Enterprises KDL/Commr/54/2012-13 dated 10.01.2013
(iv) C/10336/2013 Gulam Dastgir Kalubhai Sheikh
-do-
(v) C/10337/2013 M/s. Imrose Traders KDL/Commr/48/2012-13 dated 09.01.2013
(vi) C/10338/2013 Mohd. Iqbal
-do-
2. The facts of the case are that appellants imported old and used tyres and filed bills of entry with the following description:-
Old and used discarded tyres (Not fit for fast moving vehicles and heavy loaded vehicles to be used on Tractor Trolley, Horse cart, Camel cart, Buttock card and Hand cart.) On examination of the goods, the subject tyres were found to be in good condition and appeared to be classifiable under CTH 40122010 & 40122020, which got restricted under Import Policy circular No. 104/95 dated 28.9.2005, read with Para 2.17 of Foreign Trade Policy. The goods were inspected by one Shri Sachin Barve, Tyre Engineer of M/s. Indian Rubber Manufacturer Research Association, Ministry of Commerce and Industry, Govt. of India (IRMRA for short) who picked up ten sample tyres from each lot and gave the following report:-
a) From the samples inspected, around 70%-75% samples found to be still in good condition, have residual life and can be sold in the market for regular application either as such or after re-treading the used tyre.
a) Around 10%-15% tyres cannot be used as such no residual life but after re-treading could be sold in the market for the usage in the passenger cars and other commercial vehicles.
b) The rest of the tyres found to have damages like chipping & chunking of tread, separation of ply, crack and cuts in the side wall etc. and hence these tyres, in our opinion, are scrap tyres. All these tyres, as per their marking were originally designed for passenger car, light heavy duty commercial vehicles. It is emphasized that these tyres are not designed for Animal Driven Vehicles (ADV) and hence, these tyres cannot be declared as not fit for fast moving and heavy loaded vehicles.
Since many highway road accidents in India were attributed to tyre failures the import of 2/3 wheelers, passenger cars, truck and bus tyres, without ISI marking as per the Quality Control order 2009 issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India, is not allowed. 2.1 Transaction value of the imported tyres was also not accepted by the Revenue and valuation based on deductive method prescribed under Rule 7 of the Customs Valuation Rules, 2007 was adopted and for that purpose goods were got examined from Shri Rakesh C. Singh, a Government approved Surveyor/ Valuer from Andheri (E), Mumbai, who arrived at the market value of the goods, bill of entry wise. Cross examination of both Shri Rakesh C. Singh and Shri Sachin Barve was done by the appellants during the adjudication proceedings.
2.2 During the process of adjudication, adjudicating authority held that old and used tyres capable of being used as such or after retreading will be classifiable under CTH 40122010 and 40122020 respectively. The remaining tyres not capable of being used as such or after retreading will be classifiable as waste and scrap of CTH 40040000 of the Customs Tariff Act, 1975. Regarding requirement of Bureau of Indian Standards (BIS for short) specifications also adjudicating authority has held that the tyres should have BIS specification. The tyres not capable of being used as such or after retreading were considered as Hazardous waste and held that the same can not be imported without NOC from Ministry of Environment and Forests. On valuation of the impugned goods adjudicating authority loaded the assessable value as per the Govt. approved valuers report and absolutely confiscated the imported goods. However, it was also ordered that appellants shall re-export the consignments after payment of a specified redemption fine. Penalties were also imposed upon other appellants under Section 112(a) of the Customs Act, 1962 for importing the restricted goods at lower assessable value.
3. Shri P.M. Dave and Shri Paritosh Gupta (Advocates) appearing on behalf of the appellants during hearing and in their written submissions made the following arguments:-
(i) Appellants are not contesting the classification of the imported tyres as decided by the adjudicating authority though they held a view at the time of import that the goods in the consignments imported by the appellants were classifiable under CTH 40122090.
(ii) That similar goods are being cleared at ICDs Tughlakabad, Kolkata, Chennai and Delhi on payment of redemption fine as per the import date of all major ports downloaded from websites. They produced a copy of the OIO dated 16.10.2012 issued by Additional Commissioner, Ghaziabad Commissionerate, where consignment of 12, 13. 14. 15 and 16 was loaded from Rs. 31,68,002/- to Rs. 72,86,562/- and a redemption fine of Rs. 14 Lakhs was imposed under Section 125 of Customs Act, 1962. A copy of Adjudication order No. 123/2012 dated 04.5.2012 issued by Additional Commissioner, ICD, Tughlakabad was also furnished.
(iii) That BIS standards are not applicable to old and used tyres. He relied upon a letter dated 23.11.2012 issued by Bureau of Indian Standards and letter dated 12.12.2012 written by Director of Ministry of Commerce and Industry, Department of Industrial Policy and Procedure, Govt. of India, addressed to CBEC, New Delhi.
(iv) That old and used tyres classified under 40122010 and 40122020 can not be considered as waste and scraps as the same are capable of being used as such or upon their retreading as held by the adjudicating authority.
(v) That as per letter dated 12.01.2012 written by Commissioner, ICD Tughlakabad to Chief Commissioner Customs), the practice is to allow clearance to old and used imported tyres capable of being used on suitably loading assessable value and on payment of redemption fine.
(vi) That as per the customs Website also such tyres are being allowed clearance without insisting for BIS standards from all major ports.
(vii) That old and used tyres are not fit for fast moving cars, even though some buyers in India may use such tyres, but actually these tyres are required to be used for Animal Driven Vehicles (ADV) like camel carts, Bullock carts, Tractor Trolleys. Therefore, it was argued that even if these tyres are not originally designed for ADVs, due to wear and tear and prolonged use on fast moving vehicles or heavy load vehicles, the same are capable of being used for Animal Driven Vehicles. He relied upon answer to Q.No. 3 of the cross-examination of Shri Sachin Barve of IRMRA to the affect that 90% of the tyres are rated as either usable as such or on retreading and can not be considered as waste which need NOC from the Ministry of Environment and Forest under the Hazardous Waste Rules, 2008.
(viii) That tyres having residual life are not considered to be hazardous waste by the Pollution Control Agency. He relied upon the letter dated 12.01.2012 written by Commissioner, ICD, Tughlakabad to the Chief Commissioner, Customs, New Delhi, wherein it has been conveyed that Delhi Pollution Control Authorities have confirmed that no NOC is required for used tyres listed in Part-B of Schedule III of Hazardous Waste (Management, Handling and Trans-boundary Movement) Rules, 2008, as such goods are mentioned at srl. No. B3140 of Part-B of Schedule-III.
(ix) That the transaction value can not be rejected as the appellants have paid the invoiced price only which is the sole consideration. Revenue does not have any evidence that any amount in excess of the invoice value has been repatriated to the supplier of the goods. He also argued that value of used tyres depend upon the condition of each tyre depending the extent of use, residual life, condition of roads where the tyres are used, brand of the tyres, country of origin of the tyres etc. That for arriving at the assessable value from the market survey by deducting 30 to 35% on account of Customs duty, transportation, clearance expenses and reasonable profit is a highly unreasonable method of valuation without doing actual market survey and can not be made as the basis for valuation and loading of value. That Rule 7 of the Customs Valuation Rules can only be made applicable if there is any evidence to reject Transaction Value. In the present case no Chartered Engineers certificate is relied upon by the Revenue to arrive at a value based on deductive method under Rule 7.
(x) That present are not a cases for confiscation and re-export of imported goods on payment of redemption fine and the goods are required to be released after imposing reasonable redemption fine as is being done in the other places, as the imported goods are only restricted and not absolutely prohibited.
(xi) That as per the valuation of imported tyres for Bill of Entry No. 48 dated 15.3.2012 got done by them from Shri Rajesh J. Patel and Mauseen S. Pathan (Surveyor/ Assessor and Valuer) from Ahmedabad, the market value of the consignment will be Rs. 10,32,005/- and not Rs. 41,15,635/- as got done by the Revenue.
(xii) Appellants relied upon the following case laws in support of their contentions:-
(a) Shree Ganesh International vs. CCE Jaipur [2004 (174) ELT 171 (Tri. Del.)]
(b) Gauri Enterprises vs. CC, Pune [2002 (145) ELT 706 (Tri. Bang.)]
(c) Vaibhav Textiles vs. Commissioner Central Excise & Customs, Kolkatta [2007 (214) ELT 408 (Tri. Kolkatta)]
(d) Kirti Sales Corpn. Vs. CC, Faridabad [2008 (232) ELT 151 (Tri. Del.)]
(e) Impact Systems Inc. vs. CC, Tuticorin, [2008 (228) ELT 604 (Tri. Chennai)]
(f) Care International vs. CC, Madras [1994 (69) ELT 74 (Tri.)]
(xiii) That in view of the orders dated 26.10.2012 and 04.05.2012, issued from F.No. V(30) ICD Loni/ Adj/Millennium/1064/2012 and F.No. VIII (ICD) 10/TKD/6AG/474/2012 passed respectively by Additional Commissioner, Ghaziabad and Additional Commissioner, Tughlakabad, such consignments of old and used tyres were being cleared after imposition of reasonable redemption fine and penalties after enhancement of assessable value. It was also argued that as per letter F. No. 10 (3)/2013-LR dated 30.01.2013; obtained from Shri Babu Lal, Director and CPIO of Ministry of Commerce and Industry, Department of Industrial Policy and Promotions, (LR Section), Udyog Bhawan, New Delhi; the provisions of the Quality (Control) order 2009 are not applicable to the used tyres. It was also argued that Shri Babu Lal, Director is the same officer who issued letter No. 10 (22)/2012-LR dated 12.11.2012 to OSD (Customs) Tariff Unit, Department of Revenue, CBEC, New Delhi.
4. Shri K. Sivakumar (AR) appearing on behalf of the Revenue during the course of hearing and while making the written submissions, inter-alia argued that the imported old and used tyres are not designed to be used for Animal Driven Vehicles (ADVs) hence appellants have deliberately mis-declared the description of goods and value in order to evade customs duty and licensing restrictions. It was his case that not only BIS standards were required to be complied but the imported goods also represent Hazardous cargo for which NOC from Ministry of Environment and Forest was required under the Hazardous Waste (Management, Handling and Trans-boundary Movement) Rules, 2008.
4.1 Learned AR relied upon the following judgments and circulars to support his arguments while defending the Orders-in-Original:-
(a) Commissioner of Customs (Imports) Chennai vs. V.S. Govinda [2013 (287) ELT 161 (Mad.)]
(b) Royal Carbon Black (P) Limited vs. CC of Customs, Mumbai [2012 (275) ELT 528 (Bom.)]
(c) Commissioner of Customs vs. Mass Trading Co. & Others [2013-TIOL-505-HC-MAD-CUS.]
(d) Commissioner of Customs vs. P.V. Ukkru International Trade [2009 (235) ELT 229 (Kerla)]
(e) Pine Chemical Suppliers vs. Collector of Customs [1993 (67) ELT 25 (SC)]
5. Heard both sides and perused the case records. While deciding the case, the adjudicating authority has framed the following issues in Para 53 of the OIO:-
(i) Whether the impugned tyres can be used for motor vehicles as such or after re-treading or are merely usable by the animal driven vehicles (ADV)? If used for motor vehicles, whether the same is classifiable under CTH No 40122010 or 40122020 of Customs Tariff Act 1975 as against claim of the importer for classifying them under CTH 40122090 of Customs Tariff Act, 1975 ?
(ii) Whether the impugned tyres are required to be manufactured as per BIS standard and shall bear BIS mark?
(iii) Whether the impugned tyres fall under restricted categories as prescribed under pneumatic under Pneumatic Tyres and Tubes for Automotive Vehicles (Quality Control) Order, 2009 and require import license for import thereof?
(iv) Whether the scrap tyres (ie., unusable tyres bearing cuts etc.) can be considered as hazardous waste under the provisions of Hazardous Wastes (Management, Handling and Trans-boundary Movement) Rules 2008 and if so, whether the same are restricted for import?
(v) Whether the value of the impugned tyres is required to be re-determined as proposed in show cause notice ?
(vi) Whether proposal for consequential action against the notices are correctly, made in the show cause notice or otherwise.
5.1 So far as the classification of the imported old and used tyres is concerned, it was held by the adjudicating authority that old and used tyres, with residual life when used as such or after retreading, were classifiable under CTH 40122010 and CTH 40122020 and remaining tyres were classifiable as waste/ scrap tyres of CTH 40040000 of the Customs Tariff Act, 1975. Appellants were agitating the classification of the tyres imported under CTH 40122090 till the filing of appeals, in view of the earlier judgments, but during hearings advocate of the appellants submitted that they are not agitating the classification of the imported old and used tyres, but are contesting the need of application of BIS standards and application of the Hazardous Waste (Management, Handling and Trans-boundary Movement) Rules, 2008 to their imported old and used tyres and also the issue of valuation and extent of redemption fine and penalties.
5.2 So far as application of BIS standards to the present imports, is concerned as per issues framed at Para 53 (ii) and (iii) of OIO, it was the argument of the appellant before the adjudicating authority that the provisions of BIS standard are not applicable to the imported old and used tyres. However, adjudicating authority held that old and used tyres can not be imported in view of the reference C/No.1 dated 23.11.2012 from BIS authorities, New Delhi and clarification No. 10 (22) 2012-LR dated 12.11.2012 from Department of Industrial Policy and Promotions. It is seen from the clarification No. 10 (22)/ 2012-LR dated 12.11.2012 issued by Director, Department of Industrial Policy and Promotions to OSD (Customs), Tariff, Unit, CBEC, New Delhi and its covering letter No. CMD-1 dated 23.11.2012, written by Sc. And Head (C. No. 1) of BIS, New Delhi to Commissioner of Customs, Kandla that import of old and used tyres can not be allowed without BIS standards being observed. On the other hand it is evident from Para 2.17 of the Chapter 2 of General Provisions regarding Imports and Exports Policy, import of all second hand goods is only restricted and not absolutely prohibited. As per Chapter 40 of Import Policy specified for heading 40122010 and 40122020, under which the adjudicating authority has classified the old and used tyres capable of being used imported old and used tyres are only a restricted item. It is also observed from letter C.No. VIII/ICD/TKD/6AG/202/11 dated 12.1.2012, written by Commissioner ICD Tughlakabad, New Delhi to CC (Customs), Delhi, that there is no requirement of applying BIS standards in the case of import of old and used tyres. However, it is also observed that majority of old and used tyres, either as such or on retreading, are capable of being used. In view of these observations impugned goods the same can not be considered as absolutely prohibited under the Import Policy. Documentary evidences have been furnished by the appellants which clearly bring out that such old and used tyres are being imported and cleared on payment of appropriate duty, redemption fine and penalty as other major ICDs and Ports in India. The classification of imported goods made by the adjudicating authority under CTH 40122010 or 40122020 itself shows that majority of the imported tyres are capable of being used and therefore, can not be considered as waste and scrap and accordingly have to be considered as restricted goods as per Import Policy and not as absolutely prohibited goods. Appellants have also furnished a copy of letter No. 10(3)2013-LR dated 30.01.2013 from Department of Industrial Policy and Promotions (LR Section), obtained under RTI to the effect that provisions of Quality (Control) Order 2009 are applicable to only new tyres and not used tyres.
5.3 So far as the issue raised at Para 53 (iv) of the OIO dated 10.01.2003 is concerned, it is observed from the case records that Shri Sachin Barve, Tyre Engineer of IRMRA under his report dated 13.4.2012 (available in Para 7 of the OIO dated 10.01.2013) has opined that 10 to 20% of the tyres originally designed for fast moving passenger cars or light and heavy commercial vehicles have defects like chipping and chunking of tread, separation of ply, cuts and cuts in the side wall etc. and are thus scrap tyres. Shri Rakesh Singh, approved Govt. Valuer of Accurate Appraisal Services also engaged by the Revenue gave an opinion that approximately 2% of the whole tyre lot has some defects. As per another report dated 02.04.2012, produced by the appellants, from Shri Rajesh J. Patel and Mr. Mauseen S. Pathan (Surveyor/ Assessor and Valuer), only 23 to 25% of the imported tyres can be used as such for automobiles and appellants argument is that remaining old and used tyres, though not designed for ADVs but are meant only for Animal Driven Vehicles (ADVs). It is observed from the expert knowledge available above that there is some percentage of old and used tyres which will belong to be category of waste/ scrap tyres which adjudicating authority has classified under CTH 40040000. This percentage is showing vide variation from 2% to 20% or even more, as per the expert opinions available on record. Accordingly this quantity of waste and scrap tyres will belong to category of Hazardous Waste as held by Madras High Court in the case of Commissioner of Customs (Imports) Chennai vs. V.S. Govindan [2013 (287) ELT 161 (Mad.)], where nearly 90% of the imported tyres were found to be part-worn tyres. In the present imported consignment 80-90% tyres are capable of being used as such or after retreading for fast moving and heavy loaded vehicles but appellants, as per the description, have claimed to have imported these tyres for the use of ADVs and can not be considered as Hazardous Waste and scrap once they are capable of being used as such or after retreading. However, as held earlier the waste/ scrap tyres not capable of being used as such or after retreading, will have to be considered as Hazardous Waste for which NOC from Ministry of Environment and Forest was required under the Hazardous Waste (Management, Handling and Trans-boundary Movement) Rules, 2008. In the absence of such NOC that percentage of the waste/ scrap tyres classified by adjudicating authority under CTH 40040000 will be required to be absolutely confiscated and exported out of the country being a Hazardous Waste. However, a view can not be taken that those tyres capable of being reuse as such or after retreading will again become waste/ scrap tyres within a short time because the same can also be said about the brand new tyres with BIS specifications, whether imported or manufactured in India.
5.4 In Para 53 (iii) of the OIO dated 10.1.2013, the Adjudicating authority had raised the issue whether imported tyres fall under restricted category as per Pneumatic Tyres and Tubes for Automotive Vehicles (Quality Control) order 2009 and require import license. It was held by the adjudicating authority that old and used imported tyres are not allowed to be imported for direct use. It may be true that a commodity imported by appellants could be prohibited under any law for the time being in force but that does not make the imported goods absolutely prohibited under the import policy. As per the import policy import of old and used tyres or re-treading tyres is only restricted commodity. The Quality Control order of 2009 for Pneumatic Tyres and Tubes has been issued under Sec. 14 of the Bureau of Indian Standard Act 1986. If any provision of this Act and/or Quality Control order 2009 has been violated then penal provisions under that Act could be enforced. It is not brought out by investigation whether all the persons doing re-treading of old and used tyres in India are also following BIS standards. In the absences of the above, it has be held that the Pneumatic Tyres and tubes for Automotive Vehicle (quality control) Order 2009 is only applicable to the new tyres manufactured in India or imported into India. In any case, any violation of a prohibition under any other enactment does not make old and used tyres, capable of being used as such or re-treading, liable to absolute confiscation under Sec. 111 (d) of the Customs Act 1960.
5.5 In Para 5 (v) above, the issue of valuation has been raised by the Adjudicating authority. Bills of Entry No F-47 and 48 both dated 15.3.2012 were filed by appellant M/s Universal Trading Company, Delhi and the values declared were Rs 3,73,306.20 and Rs. 4,58,071.10 respectively which were loaded to Rs 20,98,132/- and Rs 30,45,488/- respectively by the Adjudicating authority on the basis of valuation done by the Govt. approved valuer. It was also found by the Adjudicating authority that there was no alternative with the department to determine the value of the consignments other than the method adopted in the SCN as no contemporary transaction of the identified goods was available. It is also observed from Para 5 of the OIO No KDL/Commr/49/2012-13 dated 10.01.2013 passed by Adjudicating authority that similar consignments were being imported by Appellant M/s Universal Trading Company in the year 2009 which were assessed by accepting the declared value and allowed clearance on a redemption fine of around 90% of the declared value along with heavy penalty. But in the present imports, prima facie, there appeared to be a mis-declaration in the imports of old and used tyres which were got examined by the tyre engineer of M/s Indian Rubber Manufacturers Association (IRMRA). For determining the assessable value under Rule 7 of the Customs Valuation Rules 2007, the services of one Shri Rakesh C Singh of Accurate Appraisal Services, Andheri (E), Mumbai, were availed who visited the place of import on 27.3.2012 and gave his report from Mumbai on 30.3.2012. As per this report, only 2% of the whole lot was found with some defects. It was also certified that most of the old and used imported tyres have up to 30% of life left but these tyres are not fit for fast moving vehicles and heavy loaded vehicles. However, it is not coming out of this entire report as to what market survey was done by the Govt. approved valuer or what data was used to assess the value arrived at. It is also not clear from the report as to which market data he used whether it was for Mumbai, Ahmedabad or Delhi or Kolkatta tyre market. In the cross examination of Shri Rakesh C Singh as reflected in Para 41 (i) of the adjudication order No KDL/Commr/49/2012-12 dt. 10.1.2013 the place of market taken for valuation enquiry was disclosed at Mumbai but it is evident from cross examination that valuation was done by Shri Rakesh C Singh only on the basis of oral inquiries and on the basis of his personal knowledge and not on the basis of any documentary evidence of prices prevailing in Mumbai. No resourcing has been given by the Adjudicating authority to address the discrepancies brought out by the appellants in the cross examination of the witnesses before deciding the valuation under Rule 7 of the Customs Valuation Rules 2007. Firstly, Rule 7 is subject to the provisions of Rule 3 and no evidence has been brought on record by the Revenue to discard transaction value. Rule 7 also talks of sale price of identical or similar goods imported in the greatest aggregate quantity. The sale value of identical or similar goods have to be evidenced by some document of sale of purchase being done in Indian market for such commodities. It has been confirmed in Para 41(i) of OIO dated 10.1.2013 that he has not based his valuation on the basis of any document and also confirmed that he has never visited tyre stockyard in UAE or any other Gulf country and has not made any enquiries with those countries, as per his answers to Q No. 5 and 6 of cross examination. It is also not the case of Revenue that any extra money has been repatriated by the appellants to the supplier of the imported consignments. Appellants have relied upon two assessment orders dated 04.5.2012 and 26.10.2012 issued from F NO. VIII(ICD)10/IKD/6AG/474/2012 and F No. V(30)/ICD Loni/Adj/ Melleniumn/1064/2012 respectively issued by the Additional Commissioner of ICD, Tughlakabad and Ghaziabad Commissionerate respectively. In one case of such tyre imports assessable value has been enhanced from Rs 16.98 lakh Rs 33.52 lakh and allowed Clearance officer imposing of Rs 6.7 lakh RF and imposing Rs. 3.35 Lakh penalty. In the second case relied upon by appellants the assessable value of Rs. 31.68 Lakh has been enhanced to Rs. 72.87 Lakh and allowed clearance on a redemption fine of Rs. 14 Lakh and a penalty of Rs. 7.5 lakh. These two yardsticks adopted by the other Commissionerates indicate that during relevant time for similar imports there was an enhancement of assessable value by which the declared value was being raised to the extent of 100 to 130%. Such an enhancement in assessable value is required as appellants have themselves accepted by providing copy of their survey/valuation report that higher amount can be fetched by the consignments when sold in India. But as already observed earlier, there is no evidence with the Revenue that extra amounts have been remitted by the appellants for the current imports to the supplier of the goods. Appellants have also given correct description of the imported goods that old and used tyres are not fit for use for fast moving vehicles or heavy duty vehicles. In spite of that if some of the users in India make use of those tyres for fast moving vehicles or heavy duty vehicles, then appellants can not be faulted with. It is not a fit case for holding that there was a mis-declaration of value or description of goods and accordingly provisions of Sec 111(m) of the Customs Act 1962 can not be invoked.
5.6 Appellants have relied upon the judgments of Shree Ganesh International vs. CCE Jaipur (Supra), Vaibhav Textiles vs Commr of Central Excise & Customs, Kolkatta (Supra) and Kiriti Sales Corpn. Vs. Commissioner of Customs, Faridabad (Supra) holding that declaration made in the Bills of Entry based on the documents received by the importers can not be held to be a case of mis-declaration under Sec 111 of the Customs Act 1962. Similarly, it was held by CESTAT in case of Gauri enterprises vs. Commissioner of Customs, Pune (Supra) and Care International vs. Commissioner of Customs (Madras) (Supra) that confiscation is not proper when similar goods were earlier released on redemption fine. However, confiscation Under Sec. 111 (d) of the Customs Act, 1962 is justified for the reason that old and used tyres are restricted items under the Import Policy for which a valid import license was required and accordingly penalties are also imposable upon the appellants under Sec 112 of the Customs Act, 1962. However, from the practice on extent of redemption fine and penalty imposed upon the importers in the Customs House like, ICD, Tughlakabad, New Delhi and Ghaziabad, it is observed that redemption fine imposed was about 20% of the enhanced value and penalty imposed was about 10% of the enhanced value. In the present imports before us nearly a time of one-and-half year has passed from the date of import and being live consignments appellants may have to incur additional expenditure on account of litigation, demurrage and other port expenses. Looking to the facts and circumstances of the present appeals, it will be appropriate to order that the declared assessable value should be enhanced by 100% and allowed clearance by imposing a redemption fine of 15% on the enhanced value and by imposing a penalty of 10% of the enhanced value. For the waste and scrap tyres, being in the nature of hazardous waste, the exact quantity may be determined during allowing clearances and re-exported at the expense of the importers. The redemption fine and penalty with respect to waste and scrap of tyres, ordered to be re-exported, is deemed to be included in the redemption fine and penalties already imposed as no separate quantity and value of the waste and scrap of tyres, classifiable under 40040000, is available on record.
6. Appeals of the appellants are allowed, to the extent indicated hereinabove, by setting aside the Orders-in-original with the directions to complete the assessments in the light of observations made in Para 5.6 above.
(Order pronounced in the Court on 22.10.2013)
(M.V. Ravindran) (H.K. Thakur)
Member (Judicial) Member (Technical)
.KL
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