2013 (8) TMI 851 - AT - Customs

Classification of goods Benefit of notification - Assesse classified the product under CTSH 3901 2000 of Customs Tariff Act and claimed the benefit of concessional rate of duty of 5% available for High Density Polyethylene (HDPE) under Sr.No.477 of exemption Notification No.2/2002-Cus - Held that - In the absence of any support for the conclusion that the product imported by the appellant had been chemically modified or it was not known as HDPE in the market - the benefit of exemption under Sr.No.477 had to be extended to the assesse - Revenue had not applied even the trade parlance test - The Revenue had not got even the test certificate from the Government laboratory which was essential in the case Whether the product was a chemically modified HDPE or not and whether it was known as HDPE in the market, had not been considered at all the lower authorities had not been fair decided in favor of assesse.

Summary

Issues:
Classification of imported product for duty exemption under Customs Tariff Act, 1975.

Analysis:
The appellant imported a product declared as "Borstar HE 3450-H HD Polyethylene" and classified it under CTSH 3901 2000 of the Customs Tariff Act, 1975, claiming a concessional rate of duty of 5% for High Density Polyethylene (HDPE) under Sr.No.477 of exemption Notification No.2/2002-Cus. The Revenue contended that the product was not eligible for exemption under Sr.No.477. The relevant tariff heading and exemption notification were examined. The appellant produced a test certificate showing the product's characteristics, but the authorities concluded that the product was chemically modified compounded HDPE, not covered by the exemption. The appellant argued that the product was not chemically modified HDPE and should be treated as HDPE. The authorities did not consider technical literature or obtain a test certificate from a Government laboratory. The trade parlance test was not applied. A previous case regarding the addition of carbon black to HDPE was referenced.

The Tribunal found that there was no evidence to support the conclusion that the imported product was chemically modified or not known as HDPE in the market. Therefore, the benefit of exemption under Sr.No.477 should be extended to the appellant. The appeal was allowed, granting consequential relief to the appellant.

In conclusion, the judgment revolved around the classification of the imported product for duty exemption under the Customs Tariff Act, 1975. The appellant's claim for a concessional rate of duty for HDPE was contested by the Revenue, alleging the product was chemically modified compounded HDPE not covered by the exemption. The Tribunal found insufficient evidence to support this claim and ruled in favor of the appellant, extending the benefit of exemption under Sr.No.477.