Repeated-use test for empty imported drums failed where the goods were sold as scrap and not shown fit for reuse.

Empty imported drums cleared in the domestic tariff area were analysed under Notification No. 52/2003-Customs by testing whether they were suitable for repeated use under condition 4(b). On the stated facts, the drums were sold only as scrap, and there was no evidence that they would be reused for containing or transporting the same goods again; a mere possibility of some other use by purchasers was insufficient. They were therefore treated as used packing material not fit for repeated use, attracting the benefit of condition 4(c), and the duty demand was held unsustainable.

---

---

Issues: Whether empty imported drums cleared in the domestic tariff area were liable to duty on the ground that they were suitable for repeated use under the import exemption notification, or whether they were merely used packing material cleared as scrap and therefore exempt from such duty.

Analysis: The imported inputs had been packed in drums under Notification No. 52/2003-Customs. The decisive question was whether the empty drums were suitable for repeated use within the meaning of condition 4(b). On the facts, the drums were sold only as scrap and there was no material showing that they were being reused for containing or transporting the same goods again. Mere possibility of some other use by purchasers did not satisfy the statutory test. The goods were therefore treated as used packing material not fit for repeated use, attracting the benefit of condition 4(c).

Conclusion: The duty demand was not sustainable and the appeal succeeded.

---