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of <h1>Tribunal reclassifies Polyethylene, grants relief based on Harmonised System, Explanatory Notes</h1> <h3>ALBERT DAVID LTD. Versus COLLECTOR OF CUSTOMS</h3> The Tribunal allowed the appeal regarding the levy of basic customs duty on Polyethylene Moulding Grade, finding that the goods should be classified as ... Goods chargeable to concessional rate of duty Issues:Levy of basic customs duty on Polyethylene Moulding Grade under Customs Tariff Act, 1975; Classification of goods under Heading 39.01/06; Claim for refund based on concessional duty rate for low density polyethylene; Interpretation of technical literature on density classification; Applicability of Customs Notification No. 235/85; Definition of Low Density Polyethylene.Analysis:The dispute in the appeal revolves around the imposition of basic customs duty on a consignment of Polyethylene Moulding Grade under the Customs Tariff Act, 1975. The goods were initially assessed under Heading 39.01/06 of the Schedule at a specific duty rate. Subsequently, the appellants sought a refund, contending that the goods should be classified as low density polyethylene, attracting a concessional duty rate as per Customs Notification No. 235/85. The lower authorities rejected the refund claim, citing technical literature that categorized the goods as medium density polyethylene due to their density range. This classification discrepancy forms the crux of the appeal.During the proceedings, the appellant's representative argued that there was no explicit definition of Low Density Polyethylene in the Tariff Entry or the relevant Customs Notification. The classification under Heading 39.01/06 was undisputed, and reference was made to the Explanatory Notes under the Harmonised Commodity Description and Coding System to support the contention. These notes delineated the characteristics and applications of various types of polyethylene based on specific gravity, emphasizing the distinction between low and high density polyethylene.On the other hand, the respondent's representative highlighted that the Indian Customs Tariff at the time did not align with the Harmonised Commodity Description and Coding System. The classification relied on the Encyclopaedia of Polymer Science, which categorized polyethylene into distinct density categories. The absence of a specific definition of LDPE in the relevant tariff headings or the notification further complicated the interpretation.Upon careful consideration of the arguments presented, the Tribunal acknowledged the lack of a defined term for Low Density Polyethylene in the Customs Tariff or the notification in question. Despite the variance in nomenclature systems, the Tribunal found it reasonable to refer to the distinction between low and high density polyethylene as outlined in the Harmonised Commodity Description and Coding System. The Explanatory Notes from this system clarified the specific gravity thresholds for different polyethylene types, aiding in the determination of LDPE. Consequently, the Tribunal set aside the previous order and allowed the appeal, granting consequential relief to the appellants based on the revised classification of the goods as low density polyethylene.
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