Reusable returnable containers are not dutiable imports, and their value cannot be added again where already included in CIF value.

Reusable returnable metal containers used only as packing material for imported synthetic rubber were not liable to customs duty because they did not form part of the imported goods for customs purposes. The value of such containers also could not be separately added to the assessable value where the packing or rental cost was already included in the CIF value. On that basis, the customs duty demand, reassessment, interest, confiscation and penalties were unsustainable.

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Issues: Whether reusable metal containers used for packing imported goods were liable to customs duty as imported goods, and whether any addition to the assessable value could be made on account of their alleged value.

Analysis: The containers were used only as returnable packing material for imported synthetic rubber and were owned by the overseas entity. Applying the principle that a container in which goods are imported does not become part of the mass of imported goods for customs purposes, the containers could not be treated as goods liable to duty. On valuation, Section 14 of the Customs Act, 1962 and Rule 10(1) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 require inclusion only of packing cost to the extent actually incurred or payable. The record showed that the packing/rental value was already included in the CIF value of the imported goods, so no further addition was permissible.

Conclusion: The demand of customs duty on the reusable containers and the consequential reassessment, interest, confiscation and penalties were unsustainable.

Ratio Decidendi: Reusable returnable containers used only as packing material are not goods for customs duty purposes, and their value cannot be separately added where the packing cost is already included in the transaction value.

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