Custom, Excise & Service Tax Tribunal
Time Technoplast Ltd vs Kandla on 16 May, 2024
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench at Ahmedabad
REGIONAL BENCH- COURT NO. 3
Customs Appeal No. 12093 of 2015- DB
(Arising out of OIO-KDL-COMMR-PVRR-10-2015-16 dated 31/08/2015 passed by
Commissioner of Customs-Kandla)
M/s Time Technoplast Ltd ........Appellant
55, Corporate Avenue, 2ND Floor,
Saki Vihar Road, Andheri (East),
Mumbai-Maharashtra
VERSUS
C.C. - Kandla ......Respondent
Custom House, Near Balaji Temple, Kandla-Gujarat WITH Customs Appeal No. 12094 of 2015- DB (Arising out of OIO-KDL-COMMR-PVRR-09-2015-16 dated 31/08/2015 passed by Commissioner of Customs-Kandla) M/s TPL Plastech Ltd ........Appellant Office No. 102, First Floor, Vtm Building No. 2, C Mehra Industrial Estate, Saki Naka, Andheri (East), Mumbai-Maharashtra VERSUS C.C. - Kandla ......Respondent Custom House, Near Balaji Temple, Kandla-Gujarat APPEARANCE:
Shri Sachin Chitnis with Siddhanth Sriram, Advocate for the Appellant Shri Ajay Kumar Samota, Superintendent (Authorised Representative) for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. RAJU FINAL ORDER NO. 11082-11083 /2024 DATE OF HEARING: 01.04.2024 DATE OF DECISION:16.05.2024 RAMESH NAIR The following issues are involved in the present appeals. Whether HDPE Granules imported by the Appellants is chargeable to concessional rate of basic customs duty @ 5% under Notification No. 21/2002-Cus dated 01.03.2002 at Serial No. 477 (for the period upto 16.03.2012) and succeeding
2|Page C/12093-12094/2015-DB Notification No. 12/2012-Cus dated 17.03.2012 (at serial No.
237) w.e.f. 17.03.2012, as claimed by the Appellants or is chargeable to higher rate of basic customs duty @ 7.5% under Sr. No. 559 and 236 under Notification No. 21/2002-Cus and 12/2012-Cus, respectively as held by the Principal Commissioner.
Whether HDPE granules imported can be considered as chemically modified/ compounded ones for denying concessional rate of duty of 5% available to Polymers to Ethylene, namely LDPE, LLDPE, HDPE, LMDPE, LHDPE, etc. Whether extended period of limitation and penal provisions are sustainable in the absence of any suppression of mis- declaration, etc.
2. Shri Sachin Chitnis, Learned counsel with Shri Siddhanth Sriram Advocate appearing on behalf of the appellants, at the outset, submits that the exemption Notification 21/2002 dated 01.03.2002 and subsequently Notifications were denied only on the ground that the HDPE imported by the appellant is chemically modified and the exemption is available only for the compounded HDPE and not to the chemically modified. He submits that the mixing of minor quantity of Hexane does not alter the characteristics of HDPE even after modification of HDPE by including Hexane. Ethelene contained in the product is more than 98% and the Hexane is less than 2% therefore the product having 98% ethelene correctly classifiable as HDPE, therefore, the exemption notification is clearly applicable in respect of the goods imported by the appellant. He submits that the issue is no longer res-integra as the same has been considered in the following judgments:
Ratnamani Metal 2013 (291) ELT 369 (T) PSL Ltd. - 2013-TIOL-1271-CESTAT-MUM
3|Page C/12093-12094/2015-DB PSL Ltd. CESTAT's Order No. A/12858/2018 dated 06.12.2018 PSL Ltd. - 2022-TIOL-870-CESTAT-AHM 2.1 He submits that recently this Tribunal considered the same issue in the matter of Vikram Plasticizers wherein vide Final Order No. 11563/2023 dated 24.07.2023 held that HDPE even though it is inclusive of miniscule percentage of different chemical, the goods remain as high density polyethelene, therefore, clearly covered by the Exemption Notification No. 12/2012-Cus dated 17.03.2012. He submits that in view of above said judgments, the issue has been settled in favour of the appellant.
3. Shri Ajay Kumar Samota, Superintendent (Authorised Representative) appearing on behalf of the revenue reiterates the findings of the impugned order.
4. On careful consideration of the submission made by both the sides and perusal of records, we find that in view of the fact that the very identical issue has been decided by this Tribunal this case does not need a fresh finding on the face of the Tribunal decision under Final Order No. 11563/2023 dated 24.07.2023 which is reproduced below:
"The issue involved in the present case is that whether the high density polyethylene granules which is chemically modified is liable for exemption Notification No. 12/2012- Cus dated 17.03.2012 (Serial No. 237) or otherwise.
2. The case of the department is that since HDPE granules imported by the appellant is 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.
3. Shri S.J. Vyas, learned Counsel at the outset submits that the sample of the imported goods were drawn and tested by Customs House laboratory and as per the report, the goods in question is not other than the high density polyethylene therefore, even though the imported HDPE granules are modified but the character of High Density Polyethylene is maintained and accordingly the goods is clearly covered under exemption notification. In support, he placed reliance on the following decisions :-
4|Page C/12093-12094/2015-DB 2023 (4) TMI 928 - CESTAT AHMEDABAD - C.C. -Kandla vs. PSL Limited 2013 (8) TMI 851 CESTAT AHMEDABAD - Ratnamani Metal & Tubes Limited vs. CC Kandla 2021 (10) TMI 585 - CESTAT AHMEDABAD - Meera Pipes Pvt. Ltd. And Others vs. C.C.E. & S.T. -Ahmedabad-III 2022 (12) TMI 567 - CESTAT AHMEDABAD - Surya Exim Limited, Sachin Vadhvana and JP Saboo Surya Exim Limited vs. C.C., Ahmedabad
4. Shri Tara Prakash, learned Deputy Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order.
5. On careful consideration of the submissions made by both the sides and perusal of record, we find that the disputed issue in the present case is the eligibility of exemption Notification No. 12/2012-Cus in respect of High Density Polyethylene. The said notification with the relevant entry No. 237 is reproduced below:-
TABLE
S. Chapter or Description of goods Standard Additional Condition
No. Heading or rate duty rate No.
Sub-heading or
tariff item
(1) (2) (3) (4) (5) (6)
236. 3901 to 3915 All goods 7.5% - -
(except 3908)
237. 3901 The following polymers of 5% - -
ethylene, namely :-
(i) Low density
polyethylene (LDPE),
(ii) Linear low density
polyethylene (LLDPE),
(iii) High density
polyethylene (HDPE),
(iv) Linear medium
density polyethylene
(LMDPE),
(v) Linear high density
polyethylene (LHDPE)
From the above notification it can be seen that as per the Serial No. 237, the polymers of ethylene mentioned at serial (iii), it is clear that exemption is granted to High Density Polyethylene (HDPE). Now it is to be examined that the appellant's goods falls under the description of High Density Polyethylene or otherwise. We find that Customs department drawn sample and got it tested from Customs House laboratory, Kandla which has reported that goods are chemically modified polymers. The samples were re- tested to ascertain the goods imported are chemically modified or otherwise. The test report dated 24.12.2014 showed the report as -
"The sample is in the form of whitish transulent granules. It is composed of Polymer of ethylene (HDPE). It is chemically modified."
It is for this reason that department has contended that the goods imported by the appellant being chemically modified is not HDPE. From the exemption entry provided under serial No. 237 of Notification No. 12/2012-Cus, we find that in both the reports it
5|Page C/12093-12094/2015-DB is categorically reported that goods is predominantly HDPE. On going through the composition of the product, as per supplier's test report, we find that composition is as under:-
From the above composition, it can be seen that the product is high density polyethylene and it consists of 98% ethylene by weight. Therefore, even though some additives in very miniscule percentage exists in the composition but chemical character of the product i.e. high density polyethylene does not get altered and the same cannot be classified in any other entry other than high density polyethylene.
6. Therefore, we are of the clear view that even though miniscule percentage of different chemicals including additive mixed with HDPE, the goods remain as high density polyethylene and therefore clearly covered under the exempted entry in Notification No. 12/2012-Cus dated 17.03.2012. The judgments cited by the learned Counsel also support their case. Accordingly, we are of the view that the appellant is entitled for exemption under Notification No. 12/2012-Cus in respect of their imported goods i.e. High density polyethylene. Hence the impugned order is set-aside and the appeal is allowed."
From the above decision of the Tribunal, it can be seen that the very identical issue has been considered by this Tribunal and came to conclusion that by mere addition of small quantity of other chemical in the HDPE, the characteristic of HDPE does not get altered and the
6|Page C/12093-12094/2015-DB same remained as HDPE only. Once the product is HDPE even though the modified with miniscule quantity of other chemical it clearly falls under the exemption entry provided under Notification No. 12/2012- Cus dated 17.03.2012, therefore, in our considered view, the appellants import of HDPE even though modified clearly covered under the exemption notification No. 12/2012-Cus dated 17.03.2012 and other analogous notifications. Therefore, the impugned orders are set aside and appeals are allowed.
(Order pronounced in the open court on 16.05.2024 ) (RAMESH NAIR) MEMBER (JUDICIAL) (RAJU) MEMBER (TECHNICAL) Neha