Import of used tyres for retreading under Open General Licence was barred; confiscation upheld, with fine and penalty to be reconsidered.

Used rubber tyres imported for retreading were treated as second-hand goods, and the import policy barred their clearance under Open General Licence absent a specific licence. The argument that the tyres should be regarded as raw material did not override that policy restriction, so confiscation under the Customs Act was upheld. On redemption fine and penalty, the adjudicating authority was directed to reconsider the amounts after revaluation and to take into account evidence of past clearance practice under Open General Licence.

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Issues: Whether used rubber tyres imported for retreading were permissible for clearance under Open General Licence and, consequently, whether confiscation under the Customs Act was justified.

Analysis: The imported goods were used tyres meant for retreading. The applicable import policy prohibited import of second-hand capital goods, equipment and any other second-hand goods without a specific licence. The contention that such tyres could be treated as raw material did not displace the policy restriction. The permissibility of import under the general licence scheme was therefore negatived, and the foundation for confiscation was upheld. On the question of redemption fine and penalty, the adjudicating authority was directed to consider evidence regarding past practice of clearance under Open General Licence when redetermining those amounts after valuation was reconsidered.

Conclusion: The import was not permissible under Open General Licence and confiscation was sustained; the importer's challenge failed, while the Department succeeded on the consequential issue relating to fine and penalty.

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