2007(12)LCX0301

IN THE CESTAT, WEST ZONAL BENCH, AHMEDABAD [COURT NO. II]

Ms. Archana Wadhwa, Member (J) and Shri M. Veeraiyan, Member (T)

Galaxy Pet Packaging Syntex

Versus

Commissioner of Customs, Kandla

Final Order Nos. A/2987-2989/2007-WZB/AHD, 6-12-2007 in Appeal No. C/52-54/2007

Cases Quoted -

Commissioner v. CEAT Tyres of India - 2001(12)LCX0015 Eq 2002 (140) ELT 0273 (Tribunal-LB) - Referred [Para 2]

Advocated By -

Shri P.M. Dave, Advocate, for the Appellant.
Shri D.S. Negi, SDR, for the Respondent.

[Order per: Archana Wadhwa, Member (J)]. -

Both these appeals are being disposed off by a common order as the issue is identical. The impugned order stands passed by the Commissioner in de novo proceedings when the matter was earlier remanded by the Tribunal with specific directions.


2. As per the facts on record, the appellant imported used and old tyres claiming the classification under Central Excise Tariff Act as 4012 20 90 and accordingly filed bills of entry. The goods were examined and it was found that the same were fit to be used as tyres of motor vehicles and hence classifiable as 4012 20 10 and 4012 20 20. Accordingly, the investigations were initiated, statements of various persons recorded and proceedings initiated by way of issuance of show cause notice, which culminated into an order passed by the Commissioner, confiscating the goods, enhancing the value of the same and imposing penalty. The said order of the Commissioner was, however, set aside by the Tribunal accepting the appellant's stand that the expert opinion given by the MRF Limited who' themselves are manufacturer of tyres, cannot be made the sole basis for arriving at the findings against the appellant. The Tribunal further observed that the original authority may obtain opinions of experts as to whether the tyres in question are animal driven tyres or capable for use in motor vehicles and to decide the issue afresh in the light of the Larger Bench decision in the case of CCE, Mumbai-III v. CEAT Tyres of India as reported in 2001(12)LCX0015 Eq 2002 (140) ELT 0273 (Tribunal) = 2002 (048) RLT 0499 (CEGAT-LB).


3. The appellants' contention is that the tyres imported by them are discarded after usage and their residual life is less than 10% of the normal life of the tyre; that these tyres get dried up and develop cracks because of storage in open space and exposed to changing weather; that because of wear and tear some of them also suffer from cuts; that in view of these conditions of the tyre, they cannot bear the pay load of the commercial vehicles, that these are basically used either on animal driven vehicle or tractor trolleys by poorer sections of the society, that these are not capable of being used on light motor vehicles or light commercial vehicle; that they are therefore classifiable under Customs Tariff Heading No. 4012 20 90 and are eligible for import without an import licence.


4. The Commissioner in his impugned order has referred to the expert's opinion obtained from independent sources, as directed by the Tribunal. For better appreciation, we reproduce Para 7.3 of the said order.

"7.3 Pursuant to the directions given by Hon'ble Tribunal, expert opinion as reproduced in Para 5 above was sought. The experts from L.D. Engineering College, Ahmedabad found the tyres old and used and not left with any transportation life except scrap/junk. They further stated that for safety reasons, these tyres may not be put to actual use in automotives. Shri Ramanjit Singh Sra from M/s. Bangalore Tyre Service, Ahmedabad opined that tyres were worn out and such which cannot be used in motor vehicles but in animal drawn vehicles. He also stated that there was no guarantee for success of these tyres after re-treading. The third expert Shri Kantilal Virji Oza from. M/s. Sudhir Tyre Works, Mundra opined that these tyres are old and used. He found them as having different rim sizes. He also clearly stated that these were motor vehicle tyres. He also stated that owing to their present condition, they may not bear air pressure and may blast at any time during the use. These opinions of experts when summed up would inform that tyres under consideration are old, used worn out tyres of motor vehicles having different rim sizes which for being worn out may not be safe for use in automobiles in its present condition."

Though the above opinions show that the tyres were old, used and not capable of being used as motor vehicle tyres, the Commissioner has held the same to be tyres capable of being used in motor vehicles, on the ground that though the tyres in question have been reduced to almost scrap and are not safe for any use as motor vehicle tyres, they can still be not held as animal drawn vehicle tyres. Mere deterioration of the condition of the tyres does not automatically make themselves qualified as animal drawn tyres. As such, he has observed that automobile tyres which are old and used cannot take them away from being called as automobile tyres, for the purpose of classification and valuation of Customs Act.


5. We find that the observations and findings of the adjudicating authority are against the Tribunal's remand directions, which required the Commissioner to take expert opinion and to decide the issue on the basis of actual use of the tyre; after obtaining expert opinion. Undoubtedly, the opinion obtained from various sources are to the effect that the condition of the tyre is such that they have become incapable of being used in motor vehicle and air pressure they may blast at any time. The opinion of M/s. Bangalore Tyre Service, Ahmedabad is to the effect that main use of above tyres is in animal driven vehicles like bullock-cart, camel-cart as well as tractor trolleys in village. Similarly, the opinion given by L.D. College of Engineering is to the effect that the tyres do not have
any transportation life, except scrap/junk.


6. In view of the above opinions, it cannot be said that the goods in question are tyres falling under Heading 4012 20 10 and heading 4012 20 20 as held by the Commissioner. We, accordingly, agree with the appellants that no specific licences were required for import of the same.


7. Having classified that the goods are old, used, rejected rubber tyres, which are more in the nature of scrap and junk, the reduction of the transaction value and enhancement of the assessable value by the Commissioner cannot be upheld, especially when there is no evidence to that effect.


8. In view of the above, we set aside the impugned order and allow the appeal with consequential relief to the appellants.

(Pronounced in Court on 6-12-2007)

Equivalent 2009 (233) ELT 0358 (Tri. - Ahmd.)