Copolymer vs. Homopolymer: CESTAT Raps Customs for confirming ADD on PVC Import without Verifying Material Composition [Read Order]

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT) set aside a demand for anti-dumping duty (ADD), noting that the Customs authority failed to examine the technical composition of the goods to rightly assess whether the imported resin constituted a copolymer or homopolymer, to determine the applicability of ADD, and thereby remanded the matter for fresh adjudication.

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The proceedings arose from imports of polyvinyl chloride (PVC), copolymer solvin 550GA (suspension polymerization) sourced from Belgium by the appellant - KPL International Limited through multiple consignments between June 2015 and March 2017. The department alleged that the imports attracted ADD under Notification No. 70/2010-Customs (ADD) and issued a demand of ₹55,93,194 under Section 28 of the Customs Act, 1962 along with penalty under Section 114A.

The Commissioner of Customs (NS-I) JNCH, Nhava Shev later issued a corrigendum acknowledging partial discharge of ₹3,31,698 and adjusted the duty liability. The appellant contended that certain consignments were wrongly included, noting that two bills of entry related to imports from Russia, which was not a subject country under the ADD notification.

In the present appeal, T. Vishwanathan, Akhilesh Kangasia and Apoorva Parihar, appearing for the appellant submitted that the imported PVC resin was not a homopolymer but a vinyl chloride–vinyl acetate copolymer, which is expressly excluded from the levy under the Note appended to Notification No. 26/2014-Customs (ADD).

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The assessee relied on the tariff definition that a polymer qualifies as a copolymer when no single monomer contributes 95% or more of the total polymer content, asserting that the chemical composition of the imports duly fulfilled this criterion. The counsel also referred to earlier decision of the Tribunal in Commissioner of Customs (Import), Nhava Sheva v. Henkel Teroson India Ltd (2012) and Midas Fertchem Impex Pvt Ltd v. Principal Commissioner of Customs, Air Cargo Complex (Import), New Delhi (2023) to support their case.

Krishna Azad, Assistant Commissioner (AR), appeared for the Customs.

The bench comprising C.J. Mathew (Technical Member) and Ajay Sharma (Judicial Member) noted that the adjudicating authority had failed to consider the detailed technical submissions or the chemical composition placed on record despite the appellant’s repeated submissions that the goods imported by them were not ‘homopolymer’ but ‘copolymer’ which is not attributable to ADD.

The Tribunal observed that confirmation of ADD solely on the basis of generic product descriptions in the anti-dumping notifications, without scrutiny of the actual material imported amounted to non-application of mind. It further noted that self-assessment under Section 17 does not relieve the assessing officer of the responsibility to reassess goods wherever doubt exists and that a speaking order under Sections 17(5) and 28 is mandatory.

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The Tribunal held that the levy of ADD was unsustainable in the absence of any technical analysis in the impugned order. Accordingly, CESTAT set aside the impugned order and the show cause notice was restored to the original authority for issuing a fresh decision after proper verification of the material composition and classification.

The appeal was disposed of by way of remand.

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