By TIOL News Service

ALLAHABAD, NOV 05, 2014: THIS is an appeal by revenue against the order of Tribunal in 2014-TIOL-1030-CESTAT-DEL. The importer also filed a Writ Petition seeking implementation of the order of the Tribunal. The facts of the case are that the assessee had imported ‘New passenger car radial tyres of mixed sizes'. The original authority found that a certificate of the Bureau of Indian Standards was available only in respect of a consignment of Nexon brand tyres but that was valid only until 30 December 2012. No BIS certificate was available in respect of the tyres of other brands also no invoice of the manufacturer or evidence for the purchase of tyres from Nexon or from any other manufacturing company had been submitted. The Additional Commissioner ordered confiscation of the goods under Section 111 (d) of the Customs Act, 1962. However, an option was furnished under Section 125(1) of the Customs Act for the payment of a redemption fine of Rs. 8 lacs in lieu of confiscation and for the re-export of the goods. A penalty of Rs.5 lacs was also imposed.

On appeal, the Commissioner (Appeals) modified the order to the extent of allowing redemption by deleting the condition of re-export. On appeal by Revenue, the Tribunal confirmed the order of Commissioner (Appeals). Revenue is in appeal before the High Court against the order of CESTAT.

Revenue contended that the goods in question were prohibited goods within the meaning of Section 2(33) of the Customs Act and the Additional Commissioner had furnished valid grounds for imposing a condition of re-export, particularly since only one part of the consignment of Nexon tyres had a BIS certification but which had, in any event, expired on 31 December 2012, whereas the other goods were not even covered by BIS certification. Hence, it was urged that the Commissioner (Appeals) was not justified in exercising the discretion conferred by Section 125(1).

After hearing both sides, the High Court held:

The Commissioner (Appeals) was under the misconceived notion that the assessee is entitled to redemption on the payment of an appropriate redemption fine. This was clearly not a proper interpretation of Section 125 of the Customs Act. The Commissioner (Appeals) ought to have considered all the relevant facts and circumstances, including in particular, the fact that a BIS certification was available only in respect of a part of the consignment. The Commissioner (Appeals) held that some of the brands are renowned internationally. There has been no effort on the part of the Commissioner (Appeals) to segregate these brands from the rest. In a matter such as the present, the import of prohibited goods which are to be utilised in motor vehicles has an important bearing on the safety of the public at large. The conditions which have been imposed in the 2009 Order ( Pneumatic Tyres and Tubes for Automotive Vehicles (Quality Control) Order, 2009) and in the Circular of the Board are intended to fulfil a specific purpose of protecting the public interest.

Since the Commissioner (Appeals) proceeded to apply a misconceived test under Section 125 of the Customs Act and has failed to consider this aspect, the proceedings are restored back to the file of the Commissioner (Appeals) who shall decide the appeal afresh after hearing the Assessee and the Department.

(See 2014-TIOL-1900-HC-ALL-CUS)