2010 (9) TMI 952 - AT - Customs

100% EOU - Chargeability of duty on packing materials - MS Barrels - N/N. 52/2003-Cus., dated 31-3-2003 - Held that - The appellant has contended that the barrels cleared by them were cut and were not capable of further use. However, it is found that the lower authorities have considered the above submission of the appellants and have observed that no evidence stands placed by them on record showing that the barrels were not of repeated use. Also, apart from making a bald statement to that effect, nothing has been shown to substantiate the above plea. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Liability to pay customs duty on packing materials for duty-free inputs.
2. Interpretation of Notification No. 52/2003-Cus., dated 31-3-2003.
3. Applicability of Para 6.15(d) of Foreign Trade Policy 2004-2009.
4. Consideration of prior judicial decisions on similar matters.
5. Evidence requirement for claims regarding the condition of packing materials.

Issue 1: Liability to pay customs duty on packing materials for duty-free inputs
The appellant, a 100% EOU engaged in manufacturing, imported duty-free inputs under Notification No. 52/2003-Cus., dated 31-3-2003, and cleared the packing materials without paying customs duty. The Revenue contended that the packing materials should have been cleared with appropriate duty as per the notification and Foreign Trade Policy provisions.

Issue 2: Interpretation of Notification No. 52/2003-Cus., dated 31-3-2003
The Assistant Commissioner confirmed the demand for duty, interest, and penalties, citing the requirement to pay duty on packing materials under the notification. The Commissioner (Appeals) upheld this decision, emphasizing the liability for customs duty on the packing materials based on the notification's provisions and relevant policy circulars.

Issue 3: Applicability of Para 6.15(d) of Foreign Trade Policy 2004-2009
The Commissioner (Appeals) referred to Para 6.15(d) of the Foreign Trade Policy 2004-2009, which allows for the disposal of used packing material upon payment of duty. The appellant's argument, relying on a previous case, was dismissed as the circumstances differed, and the provisions of the notification for duty-free inputs were not the same.

Issue 4: Consideration of prior judicial decisions on similar matters
The Tribunal cited a previous case involving a 100% EOU clearing empty barrels after using duty-free imported goods. The Tribunal upheld the Revenue's contention that such packing materials fall under a specific condition requiring duty payment on their value at the time of import.

Issue 5: Evidence requirement for claims regarding the condition of packing materials
The appellant claimed that the cleared barrels were not suitable for further use, but failed to provide evidence supporting this assertion. The Tribunal found no merit in this claim, as no substantiating evidence was presented, leading to the rejection of the appeal.

In conclusion, the Tribunal upheld the requirement for the appellant to pay customs duty on the packing materials for duty-free inputs, as per the relevant notification and policy provisions. The decision was based on the interpretation of the legal framework and previous judicial precedents, emphasizing the need for evidence to support claims regarding the condition of the packing materials.