The Bangalore Bench of the Customs, Excise and Service Tax (CESTAT), imposed customs duty demand and held that second-hand goods are restricted for import under Foreign Trade Policy.
The appellant M/s. American Power Conversion India Private Ltd. (the importer) are engaged in the manufacture of uninterrupted power supply and inverters within the electronics hardware technology Park. The appellant imported used Enviro-tuff Liner (ETL) packing material classifying the product under 39232990. They claimed the benefit of Notification No. 52/2003 dated 01.03.2003.
The Commissioner (A) in the impugned order held that the Enviro-tuff Liner (ETL) was neither used in the process of manufacture of the articles of exported goods nor it was used in connection with production or packing of exported goods. He observed that merely because the item is used for facilitating safe transportation of the export goods, it did not entitle the goods for the exemption as packing material as stipulated in the exemption Notification. The Commissioner accordingly confirmed the demand of duty, redemption fine and penalty.
The counsels for the appellant submitted that Enviro-tuff Liner (ETL) is a fully woven liner which is hung into a general purposes ISO shipping container and allows for forklift loading and hand loading and slip sheet. Once loaded, it is completely sealed providing a closed off temperature and humidity-controlled environment for the goods inside, therefore, it is claimed that this being a packaging material the benefit of Notification should be extended.
A Two-Member Bench comprising Dr DM Misra, Judicial Member and R Bhagya Devi, Technical Member observed that “The items imported were also found to be used ETL Liners which are categorised as second-hand goods fall under the category of restricted items. As per Para 2.17 of the Foreign Trade Policy, all second-hand goods are restricted for import and by importing used ETL liners, the importer had violated the provisions of Foreign Trade Policy thereby rendering the goods liable for confiscation.
“In view of the above, the Commissioner (A) had rightly confiscated the goods and imposed redemption fine and penalty. We, therefore, find no reasons to interfere with the order of the Commissioner (Appeals) and accordingly, we uphold the demand of duty of Rs.7,02,981/- along with interest” the Bench concluded.
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