Trade parlance test preserves HDPE exemption where carbon black does not make the granules chemically modified.

High density polyethylene granules containing a small percentage of carbon black were treated as HDPE for exemption under Notification No. 21/2002-Cus., because the addition of carbon black alone did not establish chemical modification in a legally relevant sense. The Tribunal followed its earlier decisions in the same assessee's case and a co-ordinate ruling applying trade parlance, and found no material showing that the goods were no longer known as HDPE in the market. The exemption was therefore available, and the Revenue's challenge failed.

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Issues: Whether High Density Polyethylene granules containing carbon black remained classifiable as HDPE for the purpose of exemption under Notification No. 21/2002-Cus., or stood excluded as chemically modified HDPE.

Analysis: The Tribunal held that the dispute was covered by its earlier decisions in the assessee's own case and by a co-ordinate decision following the same reasoning. The imported goods contained only a small percentage of carbon black, and there was no basis to hold that the addition of carbon black, by itself, established chemical modification or took the goods outside the description of HDPE. The earlier decisions had treated the issue as settled, applied the trade parlance approach, and extended the exemption in the absence of material showing that the product was not known as HDPE in the market or was chemically modified in a legally relevant sense.

Conclusion: The goods were entitled to the benefit of the exemption notification, and the Revenue's challenge failed.

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