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Issues: Whether the imported product, declared as HD polyethylene, was entitled to exemption under Sr. No. 477 of Notification No. 2/2002-Cus dated 01.03.2002, or whether it stood excluded as chemically modified compounded HDPE.
Analysis: The notification covered specified polymers of ethylene, including HDPE. The denial of exemption was founded on the presence of carbon black and the view that such addition chemically modified the goods. However, the supplier's test certificate itself stated that there was no chemical modification, and the record contained no technical literature or Government laboratory report supporting the Revenue's view. The trade parlance aspect was also not examined. In these circumstances, the classification adopted by the Revenue was not supported by sufficient evidence to deny the benefit of the exemption.
Conclusion: The imported goods were held entitled to the exemption under Sr. No. 477, and the issue was decided in favour of the assessee.
Final Conclusion: The exemption claim succeeded and the appeal was allowed with consequential relief.
Ratio Decidendi: Where an exemption entry covers a specified polymer and the Revenue seeks to deny the benefit on the basis of chemical modification, the denial must be supported by reliable technical evidence and the product must be assessed on the basis of the full material, including the supplier's certificate and market understanding.
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