2024 (3) TMI 362 - AT - Customs

Classification of goods - benefit of exemption - Import of Flexi tanks - containers of durable nature - Demand duty - fine and penalty - Notification No. 104/94 Cus - HELD THAT - We are of the view that the Department has not appreciated the nature and characteristics of the imported goods and have relied only on the Statements recorded during investigation to conclude that the said goods are not durable and therefore not eligible for exemption under the said scheme. It is the claim of the Appellant that the adjudicating authority has not produced any evidence in support of their claim and have only relied on Board Circular No. 69/2002 Customs to allege that the goods of the Appellant are not durable. We find that the term durable containers needs to be understood in the context in which they are used with reference to the type of materials of which the container is and the purposes for which it is intended to be used. We observe that durability is a relative term and given the advancement of technology materials are capable of providing strength and resistance towards normal wear and tear and can be attributed with persistent utility when in terms of the notification such goods are to be re-exported. Therefore, we are of the view that the issue needs to verified from the factual matrix given that the nature and characteristics of the product need to be examined in order to determine whether Flexi Tanks will be considered durable or not. Hence, the nature of the goods need to be determined by way of proper test/ technical literature for which the matter is remanded for re-consideration to the adjudicating authority. Thus, no findings have been recorded on merits and are leaving the issue open. Appeal is allowed by way of remand to the adjudicating authority.

Summary

Issues involved:
The issue in the present case is whether the Appellant wrongly claimed benefit of exemption under Notification No. 104/94 - Cus dated 16.03.1994 as alleged by the Department.

Comprehensive Details:

Issue 1: Interpretation of 'durable containers' for exemption
The Appellant, engaged in logistic services, imported Flexi tanks and claimed exemption under Notification No. 104/94 - Cus. The Department alleged that Flexi tanks are not durable and hence the exemption was wrongly claimed. The Appellant argued that Flexi tanks, used for non-hazardous bulk liquids, are durable as they can last for a sea voyage and are a substitute for barrels/drums. The Tribunal noted that durability is based on endurance capability and the ability to withstand wear and tear, not solely on reusability. The Department's reliance on statements and circular was deemed insufficient. The Tribunal emphasized understanding the nature and characteristics of the goods to determine durability.

Issue 2: Lack of evidence and need for proper examination
The Tribunal found that the Department did not provide substantial evidence to support their claim that Flexi tanks are not durable. The term 'durable containers' needs to be assessed in the context of materials used and intended purpose. Given technological advancements, materials can offer strength and resistance to wear and tear. The Tribunal concluded that a proper test or technical literature is required to determine the nature of the goods. Therefore, the matter was remanded for re-consideration to the adjudicating authority to conduct a thorough examination.

Conclusion:
The Tribunal did not make any findings on merits and left the issue open. The appeal was allowed for remand to the adjudicating authority for further examination based on proper tests and technical literature.