1991 (2) TMI 161 - CGOVT - Customs

Summary

Issues:
1. Interpretation of the drawback schedule regarding LDPE and HDPE articles.
2. Classification of bags made of woven fabric of polyethylene strip yarn.
3. Application of general Note 5(a) for claiming drawback rate.

Analysis:
1. The revision application challenged the rejection of supplementary claims of drawback under sub-serial Nos. 1905 and 1906 by the Collector of Customs (Appeals). The issue revolved around whether the exported goods, bags made of woven fabric of polyethylene strip yarn, could be considered as articles of LDPE and HDPE. The contention was that the bags fell under sub-serial Nos. 1905 and 1906. However, the Government referred to explanatory notes and Chapter 39 of the Brussels Trade Nomenclature to determine that bags made of woven fabric cannot be considered as articles of plastic (LDPE and HDPE). The claims were rejected as the bags were not made of plastic material, as required by the relevant sub-serials.

2. During the personal hearing, the applicants argued that even though the bags were made of fabrics of polyethylene, they should be classified as articles of polyethylene falling under the specified sub-serial numbers. The Government, however, emphasized that the material from which the bags were made, in this case, polyethylene fabric, should be considered for classification. The analogy of a bag made from cotton textile was used to illustrate that the raw material, in this case, HDPE fabrics, determines the classification of the final product. As there was no entry for fabrics made of polyethylene in the Drawback Schedule, the applicants were advised to apply for drawback rate under Rule 6 of the Drawback Rules. Since they did not do so, the bags could not be treated as articles of polyethylene for claiming drawback.

3. The Government also examined the party's reliance on general Note 5(a), which required the appropriate rate for packing material to be determined based on the material from which such packing materials are made. It was clarified that HDPE bags were made from polyethylene fabric, not directly from plastic granules. Therefore, the bags could not be classified as articles of polyethylene for claiming drawback. The revision application was deemed to have no merit and was rejected accordingly.