Vikram Plasticizers Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)
Introduction: In a significant ruling by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Ahmedabad, chemically modified High-Density Polyethylene (HDPE) was granted exemption from customs duty. The court opined that even though the HDPE was chemically modified, it still retained its original character, and thus, was covered under exemption Notification No. 12/2012-Cus dated 17.03.2012.
Analysis: The case involved Vikram Plasticizers, who had imported chemically modified HDPE granules. The department argued that the modification meant the HDPE no longer remained as such, and hence, should not benefit from the exemption notification. However, the counsel for Vikram Plasticizers successfully argued that the chemically modified HDPE still retained its character. The Tribunal agreed, pointing out that though the HDPE was mixed with a minuscule percentage of different chemicals, it remained predominantly HDPE. Therefore, it was eligible for the exemption outlined in Notification No. 12/2012-Cus. This judgement provides valuable insights for industries dealing with chemically modified products, providing a clearer understanding of how such materials may be classified for taxation purposes.
Conclusion: The CESTAT ruling is a noteworthy judgement, affirming that chemically modified HDPE, despite its modification, still remains classified as HDPE and hence is entitled to the associated exemption from customs duty. This judgement adds another important layer to the understanding of how chemically modified materials should be classified and could be a vital reference for future cases involving similar circumstances.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The issue involved in the present case is that whether the high density polyethylene granules which is chemically modified is liable for exemption Notification No. 12/2012-Cus dated 17.03.2012. (Serial No. 237) or otherwise.
2. The case of the department is that since HDPE granules imported by the appellant is chemically modified the same does not remain as HDPE and accordingly, the exemption Notification No. 12/2012-Cus dated 17.03.2012. will not be available to the appellant.
3. Shri S.J. Vyas, learned Counsel at the outset submits that the sample of the imported goods were drawn and tested by Customs House laboratory and as per the report, the goods in question is not other than the high density polyethylene therefore, even though the imported HDPE granules are modified but the character of High Density Polyethylene is maintained and accordingly the goods is clearly covered under exemption notification. In support, he placed reliance on the following decisions :-
2023 (4) TMI 928 – CESTAT AHMEDABAD – C.C. -Kandla vs. PSL Limited
2013 (8) TMI 851 CESTAT AHMEDABAD – Ratnamani Metal & Tubes Limited vs. CC Kandla
4. Shri Tara Prakash, learned Deputy Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order.
5. On careful consideration of the submissions made by both the sides and perusal of record, we find that the disputed issue in the present case is the eligibility of exemption Notification No. 12/2012-Cus dated 17.03.2012. in respect of High Density Polyethylene. The said notification with the relevant entry No. 237 is reproduced below:-
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