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TMI Blog2023 (9) TMI 1392X X X X Extracts X X X X X X X X Extracts X X X X ..... had sought for further information regarding value and nature of the imported goods and the same was submitted by the appellants. As the department did not agree with the self-assessment made by the appellants in respect of classification of imported goods, a show cause notice dated 02.07.2018 was issued and upon receiving their reply dated 17.09.2018 and after giving the appellants a personal hearing, the original authority had passed an order rejecting the classification under tariff item 4002 19 90 claimed by the appellants and reclassified the goods under Customs tariff item 4004 0000. Further, the original authority vide Order-in-Original dated 09.11.2018 confiscated the imported goods in view of the failure on the part of the appellants to produce an authorisation from DGFT as they did not comply with the Foreign Trade Policy 2015-2020; however, an option to redeem the said goods for re-export purpose on payment of redemption fine of Rs.70,000/- was given and penalty of Rs.1,00,000/- was also imposed on the importer under Section 112 of the Customs Act, 1962. 2.2 Feeling aggrieved of the above order, the appellants had preferred an appeal before the Commissioner of Customs ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2nd Expert Committee meeting held on 19-20 September, 2016, had decided that rubber crumb/granules are made by processing of used tyre scrap and are thus products made from waste rubber, and these have not been considered as 'waste' under Schedule III of the HW Rules, 2016. Earlier also the Committee had taken this view and stated that import of this material does not need permission from this Ministry. Thus, the learned Advocate claimed that the whole basis of the impugned order categorising the imported goods as 'restricted goods' for absolutely confiscating the same is arising from incorrect understanding of the issue and thus prayed for setting aside the impugned order. 4. Learned Authorised Representative appearing for the Revenue reiterated the findings of the impugned order and stated that since there is mis-classification and mis-declaration of the imported goods, and in the absence of authorisation from DGFT, the imported goods are liable for absolute confiscation and imposition of penalty. Hence, he stated that the impugned order is sustainable and the appeal is liable to be rejected. 5. Heard both sides and perused the records of the case. 6. In the impugned order, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olicy Policy Condition Notification No. and Date 4001 Natural rubber, balata, guttapercha, guayule, chicle and similar natural gums, in primary forms or in plates, sheets or strip. 400110 - Natural rubber latex, whether or not prevulcanised ... ... ... ... ... 4002 Synthetic rubber and factice derived from oils, in primary forms or in plates, sheets or strip; mixtures of any product of heading 40.01 with any product of this heading, in primary forms or in plates, sheets or strip. ... ... ... ... ... 400219 - Styrene-butadiene rubber (SBR); carboxylated styrene- butadiene rubber (XSBR) : -- Other 40021910 --- Oil extended styrene butadiene rubber Free 40021920 ---Styrene butadiene rubber with styrene content exceeding 50percent Free 40021930 ---Styrene butadiene styrene oil bound copolymer Free 40021990 ---Other Free ... ... ... ... ... 40030000 Reclaimed rubber in primary forms or in plates, sheets or strip. Free Natural rubber will not be allowed for import in this heading. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents or other colouring matter, other than those added solely for the purpose of identification; (iii) plasticisers or extenders (except mineral oil in the case of oilextended rubber), fillers, reinforcing agents, organic solvents or any other substances, except those permitted under (B);...... Further, in the impugned order it had been elaborately discussed about the production process of imported goods at paragraph 13 to 15, to state that the Coloured Rubber Granules having size of 2mm to 4mm are derived from used truck tyres, by subjecting to various processes explained therein as the truck tyres are cut, ground, shredded; steel and fibre are extracted; after de-vulcanization, carbon black oxide, calcium carbonate curing agent and synthetic rubber are mixed; after thermal process, curing etc. pigment and PH binders are added to make the colourful granules. Further, the imported goods are not just a mixture of Styrene Butadiene Rubber with any other natural rubber of heading 4001. For these reasons the imported goods are to be treated as finished goods instead of raw rubber in any primary forms. Thus by the scope of coverage of the chapter heading 4001 and 4002 and its tarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch because of cutting-up, wear or other reasons. This category includes worn-out rubber tyres not suitable for retreading and scrap obtained from such worn-out rubber tyres, usually by the following processes: (a) Cutting the tyre, with a special machine, as close as possible to the tringle bead wires or the heel. (b) Splitting to remove the tread. (c) Cutting into pieces. The heading excludes used tyres suitable for retreading (heading 40.12). (3) Powders and granules obtained from goods of (1) and (2) above. These consist of ground waste of vulcanised rubber. They may be used as a filler in road surfacing materials or in other rubber based compounds or for moulding directly into articles not requiring great strength. The heading also excludes waste, parings, scrap, powders and granules of hard rubber (heading 40.17)." 11. As the imported goods are derived from used tyres, these are definitely not obtained from the manufacture or working of rubber so as to consider classifying the first category of goods explained at (1) above under HS explanatory notes to chapter heading 4004. Further, as the imported goods are admittedly in the nature of finished rubber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely different way, whilst reclaimed rubber refers to something that is either reused in its same form for either a new purpose or exactly what it was originally intended for. In terms of Chapter Note 3 to Chapter 40, primary forms applies only to specific forms of rubber and this includes 'granules'. The extract of the said Note is below: "3. In headings 4001 to 4003 and 4005, the expression "primary forms" applies only to the following forms: (a) Liquids and pastes (including latex, whether or not prevulcanised, and other dispersions and solutions); (b) Blocks of irregular shape, lumps, bales, powders, granules, crumbs and similar bulk forms." The imported goods is presented in granules of size 2mm to 4mm which is one of the primary form and are being used for outdoor rubber tiles, indoor rubber mats, rubber pavers etc. and thus are covered under chapter heading 4003. The relevant import policy for goods of chapter heading 4003 are 'Free' and there are no restrictions on import. Thus, the impugned order proposing absolute confiscation of imported goods classifying the imported goods under tariff item 4004 0000 is not legally sustainable. 13. It is also of importance to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be submitted to the Ministry of Environment, Forest and Climate Change along with the application. (2) For the import of other wastes listed in Part D of Schedule III, the importer shall not require the permission of the Ministry of Environment, Forest and Climate Change. However, the importer shall furnish the required information as per Form 6 to the Customs authorities, accompanied with the following documents in addition to those listed in Schedule VIII, wherever applicable. For used electrical and electronic assemblies listed at serial numbers 4 (e) to 4(i) of Schedule VIII (Basel No. B1110), there is no specific requirement of documentation under these rules: (a) the import license from Directorate General of Foreign Trade, if applicable; (b) the valid consents under the Water (Prevention and Control of Pollution) Act, 1974 (25 of 1974) and the Air (Prevention and Control of Pollution) Act, 1981 (21 of 1981)and the authorisation under these rules as well as the authorisation under the EWaste (Management and Handling) Rules, 2011, as amended from time to time, whichever applicable; (c) importer who is a trader, importing waste on behalf of actual users, shall obtain o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accompanied with the movement document as given in Form 6 and the test report of analysis of the waste, consignment, wherever applicable, from a laboratory accredited or recognised by the exporting country. In case of any doubt, the customs may verify the analysis. SCHEDULE III [See rules 3 (1) (17) (iii), 3 (23), 12, 13 and 14] Part A List of hazardous wastes applicable for import and export with Prior Informed Consent [Annexure VIII of the Basel Convention*] ........ Part B List of other wastes applicable for import and export and not requiring Prior Informed Consent [Annex IX of the Basel Convention*] Basel No. Description of wastes (1) (2) B1 Metal and metal-bearing wastes B2 Wastes containing principally inorganic constituents, which may contain metals and organic materials B3 Wastes containing principally organic constituents, which may contain metals and inorganic materials B3080 Waste parings and scrap of rubber" From the plain reading of the entry in the restrictions placed under Basel No. B 3080 of Part-B to Schedule III, it is clear that this entry do not cover the granules of rubber derived from truck tyres. The Prior Informed Consent procedure and ..... 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