Undefined tariff term construed by international explanatory notes, making polyethylene goods eligible for concessional duty relief

Where the tariff entry and exemption notification did not define low density polyethylene, the Tribunal accepted reference to Harmonised Commodity Description and Coding System Explanatory Notes as a trade and commerce aid. Those notes treated polyethylene with a specific gravity below 0.94 as low density polyethylene and 0.94 or above as high density polyethylene. On that basis, polyethylene moulding grade goods with a specific gravity of 0.926-0.929 were classified as low density polyethylene and qualified for concessional duty under the notification, resulting in relief to the assessee.

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Issues: Whether polyethylene moulding grade with a specific gravity range of 0.926-0.929 was entitled to concessional duty as low density polyethylene under Notification No. 235/85-Cus., and whether, in the absence of a definition in the tariff entry or notification, the Harmonised Commodity Description and Coding System Explanatory Notes could be used to determine the meaning of "LDPE".

Analysis: The tariff entry and the notification did not define low density polyethylene. The relevant customs tariff at the time was not based on the Harmonised Commodity Description and Coding System, but the Tribunal held that the international nomenclature could still be referred to as a useful trade and commerce aid. The Explanatory Notes showed that polyethylene having a specific gravity of less than 0.94 falls within low density polyethylene, while polyethylene with a specific gravity of 0.94 or more falls within high density polyethylene. In the absence of any other definition in the tariff or notification, that meaning was adopted.

Conclusion: The goods were held to be low density polyethylene and entitled to the concessional rate of duty. The appeal was allowed in favour of the assessee with consequential relief.

Final Conclusion: The exemption claim succeeded because the expression "LDPE" was construed by reference to the accepted international explanatory notes, leading to classification as low density polyethylene and corresponding duty relief.

Ratio Decidendi: Where a tariff expression is undefined in the statute or notification, the meaning reflected in accepted international trade nomenclature and explanatory notes may be used to construe the expression for classification and exemption purposes.

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