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of <h1>Tribunal allows appeals, directs enhanced assessments for imported tyres: emphasis on consistent treatment and proper valuation</h1> <h3>M/s. Universal Trading Company and others Versus Commissioner of Customs, Kandla</h3> M/s. Universal Trading Company and others Versus Commissioner of Customs, Kandla - 2014 (313) E.L.T. 164 (Tri. - Ahmd.) Issues Involved:1. Classification of imported tyres.2. Application of BIS standards.3. Import restrictions under Pneumatic Tyres and Tubes for Automotive Vehicles (Quality Control) Order, 2009.4. Classification of scrap tyres as hazardous waste.5. Valuation of imported tyres.6. Consequential actions against the notices.Detailed Analysis:1. Classification of Imported Tyres:The adjudicating authority classified the old and used tyres with residual life under CTH 40122010 and 40122020, and the remaining tyres as waste/scrap under CTH 40040000. The appellants initially contested this classification but later focused on other issues.2. Application of BIS Standards:The adjudicating authority held that the imported tyres must comply with BIS standards based on references from BIS authorities and the Department of Industrial Policy and Promotions. However, the appellants argued that BIS standards are not applicable to old and used tyres, citing letters from relevant authorities. The tribunal observed that old and used tyres are restricted but not absolutely prohibited under the Import Policy, and similar imports at other ports were cleared without insisting on BIS standards.3. Import Restrictions under Quality Control Order, 2009:The adjudicating authority held that old and used tyres are not allowed for direct use without complying with the Quality Control Order, 2009. The tribunal noted that the import policy classifies old and used tyres as restricted items, and any violation of the Quality Control Order does not make them liable for absolute confiscation under the Customs Act.4. Classification of Scrap Tyres as Hazardous Waste:The adjudicating authority classified tyres with defects as hazardous waste under the Hazardous Waste (Management, Handling and Trans-boundary Movement) Rules, 2008. The tribunal acknowledged that a certain percentage of tyres could be classified as waste/scrap and hazardous waste, requiring NOC from the Ministry of Environment and Forests. However, tyres capable of being reused as such or after retreading cannot be considered hazardous waste.5. Valuation of Imported Tyres:The adjudicating authority rejected the transaction value and re-determined the value based on a government-approved valuer's report, which lacked clear evidence of market data. The tribunal found no evidence of mis-declaration or extra remittance by the appellants and noted discrepancies in the valuation method used by the Revenue. The tribunal suggested enhancing the declared assessable value by 100% and allowing clearance with a redemption fine of 15% and a penalty of 10% of the enhanced value.6. Consequential Actions Against the Notices:The tribunal set aside the Orders-in-Original and directed the completion of assessments in line with the observations made, including the re-export of waste/scrap tyres classified as hazardous waste.Conclusion:The tribunal allowed the appeals to the extent indicated, setting aside the Orders-in-Original and directing the completion of assessments with enhanced values, redemption fines, and penalties as specified. The order emphasized the need for consistent treatment of similar imports across different ports and the proper classification and valuation of the imported tyres.
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