Case Law Details
In re GDPK Returnable Solutions (CAAR Mumbai)
M/s. GDPK Returnable Solutions India Private Limited has filed all application seeking an advance ruling on the classification of intermediate bulk containers or IBCs. The Goodpack group is engaged in the business of leasing out these reusable metal containers to customers/packers, who in turn, use the said IBCs for safe and secure transportation of merchandise to their consignees, through one or more modes of transportation. The applicant has stated that IBCs are reusable metal containers, made of galvanized steel specially designed and equipped for carriage by one or more modes of transport. IBCs are designed for easy handling, loading and unloading. IBCs are used as a returnable packaging material for import/export of goods. The IBCs can transport a range of products similar to marine shipping containers.
2. The applicant, in their application, indicated their preference for importing IBCs through the Jawaharlal Nehru Port. Accordingly, a copy of the application was sent to the Principal Commissioner of Customs, NS – III, Jawaharlal Nehru Custom House, seeking his comments on the application for advance ruling. The learned Principal Commissioner, in the comments has opined that IBCs merit classification under headings 73.09 or 73.10 of the first schedule to the Customs Tariff Act, 1975 and not under heading 86.09, which finds favour with the applicant. In the said communication, it is reported that IBCs imported through JNPT between 22.04.2015 to 06.01.2021 have been classified under headings 73.09, or 73.10, or 73.26 depending on constituent material, size etc.
3. The matter was listed for hearing on 24.06.2021. The applicant was represented by Shri imarishu Tiwari and others. Apart from emphasising the design characteristics of the product, e.g., fully collapsible nature, flip pins for holding the loaded IBCs in place while in transit, stack pins for stacking them when empty etc., pictures and video clips were also displayed showing the use of the IBCs when empty and when loaded. These illustrations also brought out the fact that the IBCs are designed for transportation by vessels, barges, tractor trailers etc. It was also stated that 16 loaded IBCs can fit in to a 20 ft. marine container, while 32 of them can be accommodated in 40 ft. containers. Emphasis was also laid on the relevant Chapter/Supplementary Notes. The applicant also highlighted rulings from various customs organisations across the globe where IBCs have been classified under heading 86.09. It was also informed during the course of the hearing that during the COVID 19 pandemic, due to shortage of marine containers as well as their exorbitant cost, IBCs acted as a direct alternative.
4. I have considered all the materials placed before me, both written and oral. IBCs are stated to be an environmentally sustainable alternative to wooden boxes/metal drums in the international supply chain, as use of IBCs significantly reduces disposable packaging in comparison with other packaging options, create efficient onsite storage by eliminating the need for additional intermediate packaging and waste, increase shipping efficiencies and cut down product wastage due to minimal damage in transit, resulting in reduced carbon footprints. IBCs are specially designed for ‘door-to-door- transport of goods and are equipped for carriage by one or more modes of transport and has various accessories (packing trays, corner hooks) for handling and secure mounting on vehicles, airplanes, or ships. IBCs are built and intended for repetitive use. In the video presentation made during the hearing it was shown that the IBCs have a base and all the four sides are fully collapsible. When an IBC is required for packing a consignment, all the four sides can be quickly erected and are held in position with the help of flip pins. In the collapsed state, the IBCs can be stacked one above the other for ease of transportation. When erected for use, 16 IBCs can fit into a 20 ft. marine container, while a 40 ft. container can accommodate double that number. When asked specifically about the lid during the hearing, it was stated that IBCs are designed as top open containers, but on specific order by the user, a top lid can also be provided.
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