Custom, Excise & Service Tax Tribunal
M/S. Al Noor Exports & Imports vs Cc (Imports), Chennai on 26 June, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
C/316/2011 & C/365 - 370/2011
(Arising out of Order-in-Appeal C.Cus.No.548-550/2011 dated 23.08.2011 and C.Cus. No. 604/2011 dated 26.08.2011, passed by the Commissioner of Customs (Appeals), Chennai).
For approval and signature
Honble Shri P.K. DAS, Judicial Member
Honble Shri R. PERIASAMI, Technical Member
_______________________________________________________
1. Whether Press Reporters may be allowed to see the : No
order for Publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether the Honble Member wishes to see the fair : Seen
copy of the Order.
4. Whether order is to be circulated to the : Yes
Departmental Authorities? _______________________________________________________
Appeal Nos. C/316/11, 365/11 & 366/2011
1. M/s. Al Noor Exports & Imports : Appellants
2. M/s. Colombo Agencies
3. M/s. Sri & Co.
Vs.
CC (Imports), Chennai : Respondent
4, 5,6. Appeal No. C/367-369/2011 Commissioner of Customs (Seaport), Chennai : Appellants Vs. M/s. Al Noor Exports & Imports : Respondents M/s. Sri & Co M/s. Colombo Agencies
7. Appeal No. C/370/2011 (Against O-in-A No. 604/2011 dt. 26.08.2011 in CC (seaport), Chennai Vs. Colombo Agencies Appearance Shri V. Srinivasan, Adv., for 1 & 4 (Al. Noor) Shri B. Vijay, Adv., for (2, 3, 5, 6 & 7) for the appellants/respdt.
Shri Rammohan Rao, DC (AR) for the appellant/respondent CORAM Honble Shri P.K. DAS, Judicial Member Honble Shri R. PERIASAMI, Technical Member Date of Hearing : 26.06.2014 Date of Decision: 26.06.2014 FINAL ORDER No. 40536-40542 / 2014 Common issue involved in these appeals and therefore all are taken up together for disposal. All the appeals except appeal No. C/370/2011 is arising out of the common order passed by the Commissioner (Appeals). In Appeal No. C/370/2011, Revenue filed the appeal and no appeal was filed by the respondent. All the appeals are related to import of similar named Used Pneumatic Tyres.
2. For the purpose of proper appreciation of the facts of the case, we take up the appeal C/316/2011, filed by M/s. Al Noor Exports & Imports. The relevant facts of the case, in brief, are that the importers filed Bill of Entry No. 3342220 dated 28.04.2011, for the clearance of the goods declared as Used Tyres. As the tyres were used, there was an order for first check assessment to appraise the value of the goods and also to verify, if all the times are waste/scrap. The imported used tyres were examined by the Docks Officers in the presence of the Chartered Engineers M/s. SGS India Pvt. Ltd., Chennai. The Chartered Engineer vide their Report dated 09.06.2011 stated that the useful life of the tyre is 12 years and average residual life of 7 years subject to proper operation and maintenance. On visual examination, it appears that the tyres are not scrap items and waste. As there was delay in clearance of the goods, the importers filed writ petition No. 15586/2011 before the Honble High Court of Madras, for clearance of the goods. The Honble High Court by order dated 06.07.2011, directed the importers to clear the goods, after following certain directions. Thereafter, the used tyres were reexamined by the Tamilnadu Pollution Control Board (TNPCB) in the presence of the importers. TNPCB by their report dated 25.07.2011, stated that import of old tyres should be carried out only after obtaining the permission from the Ministry of Environment and Forest, GOI and as per provisions of Hazardous Waste (Management, Handling and Transboundary) Rules, 2008 as amended certified that the tyres are not new ones and only used ones and falls under Waste Pneumatic Tyres for direct reuse.
3. The adjudicating authority confiscated the used tyres under Section 111 (d) of the Customs Act, 1962 read with Section 3(3) of Foreign Trade (Development & regulation) Act, 1992, Pneumatic Tyres & Tubes for Automotive Vehicles (Quality Control) Order, 2009 and Provisions of Hazardous Wast (Management, Handling and Transboundary) Rules, 2008 (as amended, 2010). However, it was allowed the re-export at the cost of the importer on payment of redemption fine and penalty as under:-
Appellants name Redemption Fine Penalty M/s. Colombo Agencies Rs. 2,50,000/-
Rs. 2,50,000/-
M/s. Sri & Co.
Rs. 2,30,000/-
Rs. 2,30,000/-
M/s. Al-noor Exports & Imports Rs.3,00,000/-
Rs. 3,00,000/-
M/s. Colombo Agencies RS. 1,00,000/-
Rs. 1,00,000/-
4. All the importers filed appeal before the Commissioner (Appeals). By impugned order C.Cus.No.548-550/2011 dated 23.08.2011, the Commissioner (Appeals), disposed of the appeals of first three importers . By Order C. Cus. No. 604/2011 dated 26.08.2011, Commissioner (Appeals) decided the appeal of the fourth importer (M /s. Colombo Agencies). By the impugned orders, the Commissioner (Appeals) disposed of the appeals with the direction that the importers would obtain clearance from the Ministry of Environment and Forest, GOI, within 30 days from the date of receipt of this order. If the importers obtained the said certificate within such time thereafter the lower authority may follow the adjudication procedures and allow the goods for home consumption. If the importers fail to obtain the necessary clearance the original orders stand good.
5. All the three importers and the Revenue filed appeals against the OIA dated 23.08.2011. Apart from that, the Revenue also filed an appeal against the Order in Appeal dated 26.08.2011 but the importer has not filed appeal against the OIA dated 26.08.2011.
6. Shri V. Srinivasan, Ld. Advocate appearing on behalf of M/s. Al-Noor Exports and Imports, submits that the Honble High Court directed the Customs authorities to re-examine the goods by the Chartered Engineer. But, the adjudicating authority had permitted to re-examine the goods by Tamil Nadu Pollution Control Board. The Ld. Advocate submits as under:-
i) The TNPCBs report is actually in favour of the importer in so far as it has certified the goods were not new ones and only used ones and falls under waste pneumatic tyres for direct reuse.
ii) The goods were not new ones and only used ones and falls under waste pneumatic tyres for direct reuse. It is contradictory in so far as waste tyres cannot be reused directly.
iii) The used tyres would be classifiable under CTH 40122020 and waste pneumatic tyres would be classifiable CTH under 40040000. Revenue in their counter before the Honble High Court had not disputed the classification of the goods.
iv) The goods are classifiable under 40122090, the revenue cannot treat these goods as waste.
v) The issue had already been decided by the Tribunal in the case of M/s. Universal Trading Company and others Vs. CC, Kandla, by Final Order Nos. A/11340 11345/WZB/AHD/2013 dated 22.10.2013.
7. The Ld. Advocate, Shri P. Vijay appearing on behalf of M/s. Sri & Co. and M/s. Colombo Agencies, reiterates the submissions of the Ld. Advocate appearing on behalf of M/s. Al-Noor Exports and Imports Agency. He further submits as under:-
i) M/s. SGS India Pvt. Ltd, Chennai, and Chartered Engineers, after examining the goods, had categorically stated that the goods are only used pneumatic tyres and not waste/scrap tyres. They have also enhanced the value of the goods which was accepted by the importers and therefore customs authorities cannot treat these goods as waste tyres.
ii) Tamil Nadu Pollution Control Boards report dated 25.07.2011, has also categorically stated that the imported tyres are not new ones but only used ones falling under waste pneumatic tyres for direct reuse. The findings of the TNPCB that imported tyres are not new ones but only used ones falling under waste pneumatic tyres for direct reuse, which is contrary to their finding that the import of waste tyres should be carried out only after obtaining prior permission of Ministry of Environment & Forests, GOI.
iii) There is no material placed by the revenue that the tyres hazardous in nature and would cause imminent environmental threat.
iv) BASEL Convention of UN revised technical guidelines defined Hazardous wastes tyres as A tyre that is disposed of or intended to be disposed of or is required to be disposed of by the provisions of national law. Hence, the imported used tyres cannot be treated as waste tyres as per UN Revised Technical Guidelines.
v) Both the authorities below had not considered the Chapter heading 4012 of the ITC Code, which provides Retreaded or used pneumatic tyres or rubber, solid or cushion tyres, which cannot be considered as waste, which will fall under 4004 of the ITC code which provides Waste, parings and scrap of rubber (other than hard rubber) and powders and granules obtained therefrom.
vi) The adjudicating authority observed that these imported tyres to be included under B3140 as waste. He has ignored that both TNPCB and Chartered Engineers observation that these goods can be directly reused, which has excluded waste pneumatic tyres as described under B3140.
vii) The Revenue in their appeal stated that BIS certificate would be applicable in this case. It is stated that CBEC by instruction dated 12.7.2013, clarified that BIS certificate is applicable only to newly manufactured tyres and tubes and not on old and used tyres and applicable only to domestic manufacturers and tyre dealers. It is seen from the decision of the Tribunal, in the case of Universal Trading Company and others (supra) that the department released such goods more than one lakh tyres in similar condition all over the country, in the ports of Ahmedabad, Delhi and even today they are releasing the goods.
viii) The decision of the Honble Madras High Court in the case of CC Vs. G.S. Govindan 2013 (287) ELT 161 (Mad.), was challenged its decision before the Honble Supreme Court and by order dated 26.04.2013, the Honble Supreme Court admitted their appeal.
8. The Ld. AR on behalf of the Revenue submits as under:-
i) The submission of the importers in respect of classification of the goods is not relevant in the present case. The dispute relates to as to whether the imported used tyres are waste in nature or not.
ii) TNPCB by their report dated 25.07.2011, clearly stated that import of waste tyres should be carried out only on obtaining the permission from the Ministry of Environment and Forests, GOI, which has not done in this case.
iii) It is covered by B3140 in part B Schedule III to Hazardous Waste Rules, 2008 and therefore, the adjudicating authority rightly confiscated the goods and allowed to re-export after payment of redemption fine and penalty.
iv) Chartered Engineers certificate categorically stated that the residual life is 7 years and out of that 3 years have already been lapsed and therefore no reason to release the goods.
v) The Commissioner (appeals) has erroneously allowed the clearance of the goods, and failed to appreciate that the goods are waste in nature and prohibited items under Rule 17 of Hazardous Waste (Management, Handling and Transboundary) Rules, 2008.
vi) The decision of the Honble Madras High Court in the case of G.S. Govindan (supra) would be applicable in the present case in view of the same nature of the goods.
vii) The decision of the Tribunal in the case of Universal Trading Company (supra), had not considered the decision of the Honble Madras High Court. The import of similar goods of six years old in terms of Hazardous Waste Rules 2008 is illegal in terms of Rule 17 of the said rules.
9. After hearing both the sides and on perusal of the records, we find that the goods were examined by the TNPCB. The relevant portion of the report dated 26.07.2011, is reproduced below:-
Thus the tyres were not new ones and only used ones and falls under waste pneumatic tyres for direct reuse.
As per the provisions of the Schedule 3 of Hazardous waste (Management, Handling and Transboundary) Rules, 2008 and Hazardous waste (Management, Handling and Transboundary) 3rd Amendment Rules dated 30.03.2010, waste tyres are identified vide No. B3140 (Waste pneumatic tyres excluding those which do not lead to resource recovery, recycling, reclamation or direct reuse), Import of waste tyres should be carried out only after obtaining prior permission of Ministry of Environment & Forests, Government of India.
Hence, as per the provisions of Hazardous waste (Management, Handling and Transboundary) Rules, 2008 and amendment 2010, the waste pneumatic tyres can be imported to the country with the permission of Ministry of Environment & Forests. It is seen from the TNPCB report that the goods fall under Waste Pneumatic Tyres for direct reuse. The adjudicating authority observed that these imported goods are likely to cause danger to health and environment. The adjudicating authority proceeded on the basis of TNPCB report stating that these goods are waste pneumatic tyres and therefore, the goods were imported in violation of the provisions of Hazardous waste (Management, Handling and Transboundary) Rules, 2008. But, the adjudicating authority had not considered the report as a whole that the imported pneumatic tyres are also for direct reuse. The Commissioner (Appeals) had discussed the classification of the goods in detail. In our considered view, it is not necessary to go into the classification of the goods under the Customs Tariff Act, in so far as it is to be determined as to whether the imported goods are in the nature of waste.
10. Normally, tyres discarded from the vehicles can be divided under two categories, as under:-
a) Used tyres which can be put into direct reuse as such.
b) Waste tyres which have suffered permanent damage to their structure and are not usable for retreading or re-use. These waste tyres can lead to resource recovery, recycling, reclamation etc.
10. It is seen from the letter dated 13.04.2012 of the Additional Commissioner, Office of the Chief Commissioner of Customs, New Delhi, addressed to the Director (Customs) CBEC, New Delhi, in respect of clearance of old and used imported tyres, that there is a difference of opinion between various agencies with regard to guidance for determination of waste pneumatic tyres mentioned uder B3140 in part B schedule III, requiring prior permission in terms of Hazardous Waste Rules, 2008. In the said letter, it is stated that the divergent of views of various Commissionerates regarding the clearance of old and used imported tyres.
11. On perusal of TNPCB report, we find that these imported tyres for direct reuse. The Ld. AR of the Revenue submits that it is an inclusive definition, which shall read as waste pneumatic tyres including those which lead to resource recovery, recycling, and reclamation or direct re-use. BASEL convention of UN Revised Technical Guidelines, defined waste tyres as :-
tyre that is disposed of or intended to be disposed of or is required to be disposed of by the provisions of national law. Rule 17 of Hazardous Waste (Management, Handling and Transboundary) Rules, 2008 under the heading Illgal Traffic provides:-
1) The export and import of hazardous wastes from and into India shall be deemed illegal if :
i) It is without permission of the Central Government in accordance with these rules, or
ii) the permission has been obtained through falsification, mis-representation or fraud; or
iii) it does not conform to the shipping details provided in the movement documents; or
iv) it results in deliberate disposal (i.e. dumping) of hazardous wastes in contravention of the Basel Convention and of general principles of International or National Law.
2) In case of illegal import of the hazardous wastes, the importer shall re-export the waste in question at his cost within a period of ninety days from the date of its arrival into India and its implementation will be ensured by the concerned State Pollution Control Board.
12. The Ld. Advocate strongly relied upon the decision of the Tribunal in the case of Universal Trading Company (supra). In that case, the dispute relates to import and export of used and discarded tyres, where the impugned tyres can be used for motor vehicles as such or after retreading or are merely usable by the animal driven vehicles. The Tribunal in that case observed as under:-
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.
13. In the present case, there is no dispute regarding the valuation of the imported goods. The Revenue in their appeal stated that the Commissioner (Appeals) erroneously directed the lower authority to get a certificate from the Pollution Control Board to release the goods. In support of that, the Ld. AR strongly relied upon the decision of the Honble Madras High Court in the case of G.S. Govindhan (supra). In that case, the inspection report of TNPCB stated that the tyres can be used only after retreading and the authority has concluded that they are to be treated as hazardous waste. In the present case, we do not find any such finding in the TNPCB report. So, the facts in the case of G.S. Govindhan (supra) are not applicable in the present case.
14. After considering the overall facts and circumstances of the case, we do not find any clear finding from both the sides that the imported goods are in the nature of used or waste. In our considered view, this should be examined by the adjudicating authority in the light of the decision of the Tribunal in the case of Universal (supra). Accordingly, we direct the adjudicating authority to examine all the issues to the extent of appeals filed by the three importers. All the appeals filed by the Revenue are disposed of. At this stage, the Ld. Advocate submits that the goods were imported in the year 2011 Therefore, we request the adjudicating authority to decide the denovo proceedings as expediously as possible within three months. Needless to say, that the adjudicating authority shall give proper hearing and decide the matter in accordance with law. Regarding the submission of requirement of BIS certificate, we find force in the submission of the Ld. Advocate. As per the Boards instruction dated 12.07.2013, there is no requirement of BIS certificate in respect of the import of used tyres.
(Order dictated and pronounced in the open Court) (R. PERIASAMI) (P.K. DAS) TECHNICAL MEMBER JUDICIAL MEMBER BB 1