Exemption on Customs Duty  allowable to HDPE as it won't change  Character of the Product Even after Modified: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that exemption on Customs Duty is allowable to high-density polyethene (HDPE) as it won't change the character of the product even after modification.

 Vikram Plasticizers, the appellant questioned, whether the HDPE) granules which are chemically modified are liable for exemption Notification No. 12/2012-Cus dated 17.03.2012 (Serial No. 237) or otherwise.

The department held that since HDPE granules imported by the appellant are chemically modified the same does not remain as HDPE and accordingly, the exemption Notification No. 12/2012-Cus dated 17.03.2012 will not be available to the appellant.

Shri S.J. Vyas, Counsel at the outset submitted that the sample of the imported goods was drawn and tested by the Customs House laboratory and as per the report, the goods in question are not other than the high-density polyethene therefore, even though the imported HDPE granules are modified but the character of High-Density Polyethylene is maintained and accordingly the goods is covered under exemption notification. 

Shri Tara Prakash, Deputy Commissioner (AR) appeared on behalf of the Revenue and reiterated the findings of the impugned order.

It was viewed that the product is high-density polyethene and it consists of 98% ethylene by weight.  Therefore, even though some additives in a very minuscule percentage exist in the composition but the chemical character of the product i.e. high density polyethene does not get altered and the same cannot be classified in any other entry other than high-density polyethene.  

The two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) held that “even though the minuscule percentage of different chemicals including additive mixed with HDPE, the goods remain as high-density polyethene and therefore clearly covered under the exempted entry in Notification No. 12/2012-Cus dated 17.03.2012.”

Further held that the appellant is entitled to exemption under Notification No. 12/2012-Cus in respect of their imported goods i.e. High-density polyethene.  Hence the impugned order is set aside and the appeal is allowed. 

To Read the full text of the Order CLICK HERE

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