1991 (5) TMI 147 - AT - Customs

Tribunal grants customs duty concession for film imports used in plastic capacitors

The Tribunal allowed the appeal by M/s. Universal Cables Ltd., holding that they were entitled to concessional customs duty under Notification No. ... Exemption Issues Involved:1. Eligibility for concessional customs duty under Notification No. 345/86-Cus.2. Distinction between plastic film capacitors and power capacitors.3. Interpretation of technical literature and ISI specifications.4. Relevance of Import and Export Policy and Customs Tariff in interpreting the notification.5. Requirement for amending the bond and producing the end-use certificate.Issue-wise Detailed Analysis:1. Eligibility for Concessional Customs Duty under Notification No. 345/86-Cus:The appellants, M/s. Universal Cables Ltd., claimed the benefit of a concessional rate of customs duty under Notification No. 345/86-Cus dated 16-6-1986 for importing Polypropylene Film (Hazy), Zinc Metallised Polypropylene Film, and Zinc Alloy Metallised Polypropylene Film. The Assistant Collector of Customs denied this claim, stating that the goods did not fall under the specified categories in the notification. The Collector (Appeals) upheld this decision, noting that the notification intended to grant benefits only to electronic items, not power capacitors.2. Distinction between Plastic Film Capacitors and Power Capacitors:The Assistant Collector differentiated between plastic film capacitors and power capacitors based on their distinct characteristics and uses. Plastic film capacitors are smaller, used in electronic equipment, and have low capacitance, while power capacitors are larger, used in power systems, and have high capacitance. This distinction was supported by the Import and Export Policy 1988-91 and various technical literatures. The Collector (Appeals) agreed with this distinction but noted that 'P.P. film (Hazy)' could be considered part of 'plain P.P. film.'3. Interpretation of Technical Literature and ISI Specifications:The appellants presented various documents, including ISI specifications and technical literature, to support their claim that capacitors manufactured from plastic films should be regarded as plastic film capacitors. The Collector (Appeals) acknowledged that capacitors using polypropylene films as dielectric are recognized in power capacitor technology but maintained that power capacitors are distinct from plastic film capacitors.4. Relevance of Import and Export Policy and Customs Tariff in Interpreting the Notification:The Collector (Appeals) considered the Import and Export Policy and Customs Tariff, which differentiate between various types of capacitors, to conclude that the notification's benefits were intended only for electronic items. The appellants argued that the notification should be interpreted based solely on its text, without considering external materials like the Import Policy or Customs Tariff.5. Requirement for Amending the Bond and Producing the End-Use Certificate:The Assistant Collector suggested that the appellants amend their bond to specify that the end product is plastic film capacitors instead of power capacitors, which the appellants initially refused. However, during the appeal, the appellants agreed to amend the bond and produce an end-use certificate to prove that the imported items were used for manufacturing plastic film capacitors.Conclusion:The Tribunal concluded that the appellants' contentions were valid. The notification should be interpreted based on its plain text, without considering external materials. The imported items were indeed used for manufacturing plastic film capacitors, and the appellants were entitled to the concessional customs duty. The appeal was allowed, and the appellants were instructed to amend the bond and produce the end-use certificate as required by the notification.