Custom, Excise & Service Tax Tribunal
M/S Jibran Overseas vs Cc, Ghaziabad on 8 April, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi, Court No. I Date of hearing/decision: 08.04.2015 For Approval and Signature: Honble Mr. Justice G. Raghuram, President Honble Mr. R. K. Singh, Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Customs Misc. Application No. 50634 of 2015 and Customs Appeal No. 54848 of 2014 (Arising out of order in original No. 02/CUS/COMMR/GZB/2014-15 dated 30.07.2014 passed by the Commissioner of Customs, Central Excise & Service tax, Ghaziabad). M/s Jibran Overseas Appellant Vs. CC, Ghaziabad Respondent
Appearance:
Shri Piyush Kumar, Advocate for the appellant Shri B. B. Sharma, DR for the Respondent Coram: Honble Mr. Justice G. Raghuram, President Honble Mr. R. K. Singh, Member (Technical) Final Order No. 51473/2015 Per: R. K. Singh:
Miscellaneous application has been filed to allow the appellants to produce additional evidence in the form of copies of Bills of entry showing that identical goods were being allowed to be imported and cleared for home consumption on redemption fine. Reasonable cause having been shown, we allow the miscellaneous application.
2. Appeal has been filed against order in original 02/CUS/COMMR/GZB/2014-15 dated 30.07.2014 in terms of which the following order was passed.
1. I reject the declared assessable value of Rs. 71,09,495.76 for the goods imported vide Bill of Entry No. 2678130 & 2678036 both dated 11.07.2013, 2757988 dated 19.07.2013 & 2789242 dated 23.07.2013 under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962.
2. I re-determine the assessable value at Rs. 1,28,47,268/-under Rule 9 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962.
3. I order absolute confiscation of the goods valued at CIF Rs.1,28,47,268/- imported vide Bills of Entry No. 2678130 & 2678036 both dated 11.07.2013, 2757988 dated 19.07.2013 & 2789242 dated 23.07.2013 under Section 111(d), (m) & (o) of the Customs Act, 1962. Further, since the impugned goods have been illegally trafficked into India in contravention of the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008, hence in terms of Rule 17(2) impugned goods are ordered to be re-exported. Therefore, I refrain from giving any option to the importer M/s Jibran Overseas, 6518/24, Bara Hindu Rao, New Delhi-110006 for redemption of the said goods in terms of Section 125 of the Customs Act, 1962.
4. I order for the re-export of the said imported goods at the partys own cost forthwith.
5. I impose a penalty of Rs. 15,00,000 (Rupees fifteen lacs only) M/s Jibran Overseas, 6518/24, Bara Hindu Rao, New Delhi-110006 under Section 112(a) of the Customs Act, 1962.
3. The aforesaid order was passed essentially on the following grounds:
(1) The impugned goods were mis-declared in value and the value declared was lower than the correct value thereof.
(2) In terms of the ITC (HS) classification, the import of impugned used tyres classifiable under CTH 401232020 is restricted as the value thereof was less than US D25 per piece.
(3) The impugned tyres were covered under Entry B-3140 in Part-B (list of hazard waste applicable for import and export not requiring prior informed consent) of Schedule-III of the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008 (hereinafter referred to as the said Rules) and therefore their import required permission from the Ministry of Environment and Forest (MoEF) which the importers did not possess.
4. The appellants have contended that-
(i) The impugned tyres are used tyres which are having minimum residual life of about 45% to 50% and are therefore re-usable.
(ii) Old and used tyres are specifically mentioned in ITC (HS) classification of Import and Export items under sub-heading No.40122020 as freely importable provided the CIF value was not below US$ 25 per piece.
(iii) The impugned tyres are not covered under Entry No. B-3140 in the said List B as these are directly reusable because they still have 45% to 50% residual life.
(iv) Part A of Schedule-III of the said Rules covers items for the import of which the permission is required from MoEF and old and used tyres do not figures in that list.
(v) In these circumstances, absolute confiscation is not warranted.
(vi) Such goods have been cleared on redemption fine and personal penalty for domestic use.
5. Learned DR on the other hand stated that the goods having been excluded from the said Entry B-3140 in Part-B of Schedule-III of the said Rules clearly means that they are not importable without permission of MoEF and therefore impugned order is sustainable.
6. We have considered the facts of the case. At the very outset it must be stated that as per ITC (HS) Classification the impugned goods are not freely importable under the Import and Export Policy by virtue of the fact that their value even after revision upward is less than US$25 per piece and to that extent the violation of Section 111(d) of the Customs Act is established making the goods liable to confiscation and consequently making the importer liable to penalty. This point is not disputed by the importer also and therefore hardly needs further elaboration. However, we find that the impugned goods do not figure in Part A of Schedule-III of the said Rules. The said list contains the description of goods import of which requires permission from the competent authority for their import. It is also seen that Part B of Schedule-III of the said Rules does not cover the impugned goods inasmuch as it covers only such waste of pneumatic tyres which do not lead to resource, recovery, re-cycling or direct reuse. The impugned tyres without any doubt are directly reusable and hence are clearly excluded from the said entry B-3140. Thus, the adjudicating authority is not correct to hold (as it did in para 5.20 of the impugned order) that Basel B-3140 covers all used tyres which lead to resource recovery, recycling, reclamation or direct us. Further the adjudicating authority in the said para 5.20 takes due note of the fact that goods listed in Part B do not require prior permission but comes to a finding that the impugned goods require permission of MoEF in the following words:
I also observe that though PART-B lists Hazardous Wastes applicable for Import and Export which does not require prior informed consent in terms of Rule 14(2) ibid. But further I observe that in Part-B of Schedule III of Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008 specified goods have been categorised as *, **, ***, **** or without any start. Foot note given below the Table of Part-B reads in bold letter that All other wastes listed in this Schedule-3 (par-B) having no Star/s(*...) can only be imported in to the country with the permission of MOEF. Thus, even if it is assumed that old and used Tyres can be used for recovery of resource, or reclamation or even can lead to direct reuse still it would require for import in to the country, the permission of MOEF. Thus, capability to use the goods does not absolve the requirement of permission of MOEF for import.
We are not able to comprehend the basis/ logic contained in the above quoted paragraph to sustain the conclusion that the impugned goods require permission of MoEF for their import.
7. As regards the opinion of Central Pollution Control Board (CPCB) given vide letter No. B-29016/19insp.rep0/HWMD/9054 dated 23.01.2014, it is seen that the opinion contained therein is tentative inasmuch as it states that (i) the tyres appear to be used tyres (listed as item B-3140 Schedule-III of Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008 (ii) Import of used tyres in the country needs prior approval of MoEF, and (iii) CPCB could not carry out testing of tyres as it has not analysed such samples before. Analytical methods also required to be standardised for this purpose. The said report is evidently incorrect because used tyres which are directly reusable (as the impugned tyres are) are excluded from the entry B-3140. Further as the CPCB could not carry out testing of impugned tyres, their opinion could not have been based on factual data in any case. Further, as has been recorded in the impugned order, the Delhi High Court perused the CPCB report and directed the adjudicating authority to pass order on the basis of facts available and after due consideration of the submissions of the importer on merit. The Delhi High Court did not say that the order should be passed on the basis of CPCB report.
Thus while the CPCB report is not conclusive, even if the tyres are taken to be used tyres (they admittedly are), the adjudicating authority has not disputed that they are directly usable and hence as discussed earlier, they are excluded from the scope of the said entry B-3140. Further, the impugned goods do not figure in Part A of the said Schedule-III which contains list of items requiring MoEFs permission for import. Incidentally, it may be pertinent to state that the fact that the impugned goods are not covered under the said Part-B does not mean that their import requires prior permission of MoEF, more so because they are not covered under the said Part-A. Thus, the adjudicating authority is not right in holding that the impugned tyres required permission of MoEF for import and therefore absolute confiscation ordered on that count is unsustainable.
8. We have seen the bills of entry (e.g. B/E No. F-015 dt. 05.02.2015, F-036 dt. 24.02.2012 etc. of Mudra Custom House) under which old and used tyres have been cleared without permission of Ministry of Environment and Forest, on redemption fine and penalty for having been imported without licence because they were not freely importable by virtue of the fact that CIF value per tyre was less than US$ 25 per piece. CESTAT in the case of Universal Trading Co. vs. CC, Kandla vide its order No. KDL/COMMR/48/2012-13 dt. 09.01.2013 also did not hold that such used (reusable) tyres required permission of MoEF for import.
9. As regards the value, we find that the adjudicating authority has systematically dealt with this issue, first coming to a finding as to why the transaction value was not acceptable and then re-determining the value as per the provision of Customs (Determination of Value of Imported Goods) Rules, 2007. We find that such re-determination of value was done on a rational basis and we do not find infirmity with regard thereto. Resultantly, the liability to confiscation also arises under Section 111(m) of the Customs Act, 1962 for mis-declaration of value.
10. At this juncture, it may be pertinent to point out that in the adjudication order, the goods were ordered to be absolutely confiscated. After the absolute confiscation, the goods become property of the Central Government and therefore ordering their re-export at the partys cost does not harmonise with the absolute confiscation thereof. In any case, having held that the impugned goods are not hit by the mischief of the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008 in the sense that their import did not require permission of the MoEF, absolute confiscation thereof is not warranted. As has been mentioned earlier, similar goods have been cleared on RF and PP for domestic consumption. In the case of Universal Trading Co. (supra) CESTAT allowed such clearance on RF and PP of 15% & 10% respectively.
11. In the light of the foregoing, we uphold the confiscation of the impugned goods under Section 111(d) and 111(m) of the Act ibid as also the upward revision of value. However, in the facts and circumstances of the case including the fact that the goods are awaiting clearance for so long, we allow redemption of the same on fine of 15% of the redetermined value. We also impose a penalty of 10% of the redetermined value under Section 112 of Customs Act, 1962. Needless to say that the applicable duty on the redetermined value will be payable if the goods are taken release on payment of redemption fine and penalty.
(Justice G. Raghuram) President (R. K. Singh) Member (Technical) Pant