Full Judgment
2. We have heard Shri H.P. Kabra, Vice President (Materials & Export), of the appellant company and Shri M. Jayaraman, SDR, for the respondent-Collector. Shri Kabra submitted that there was no definition either in the Tariff Entry or in the Notification No. 235/Cus/85, of Low Density Polyethylene. The classification under Heading 39.01/06 of the Schedule was not in dispute. Shri Kabra relied on the Explanatory Notes under Heading 3901.10 and 3901.20 appearing in the Harmonised Commodity Description and Coding System - Volume 2 page 557. The two headings are for 'Polyethylene' having specific gravity of less than 0.94 and 'Polyethylene' having specific gravity of 0.94 or more. The Explanatory Note reads as follows :- "Polyethylene is a translucent material having a very wide range of applications. Low Density Polyethylene (LDPE), i.e. polyethylene having a specific gravity at 20C of less than 0.94 (calculated on an additive-free polymer basis), is used largely as a packaging film especially for food products, as coating for paper, fibreboard, aluminium foil, etc., as an electric insulator, and for the manufacture of various household articles, toys, etc. The heading also includes linear low density polyethylene (LLDPE). High density polyethylene (HDPE) is polyethylene having a specific gravity at 20C of 0.94 or more (calculated on an additive-free polymer basis).
It is used in the manufacture of a variety of blow-moulded and injection-moulded articles, woven sacks gasoline and oil containers, for the extrusion of pipes, etc. Applications of ethylene vinyl acetate copolymers include snap-on caps, the lining of bag-in-box containers and stretch wrapping." It was, however, submitted by Shri Jayaraman, DR, that, at the relevant time, the Indian Customs Tariff was not based on the Harmonised Commodity Description and Coding System of the Customs Co-operation Council Nomenclature, Brussels. It was based on the Brussel's Tariff Nomenclature or the C.C.C.N. and that nomenclature had not made any distinction between low and high density polyethylene at the relevant time; nor does the notification define 'LDPE'. The Collector (Appeals) had relied on the authoritative Encyclopaedia of Polymer Science which classified polyethylene into three well defined categories of low, medium and high densities. The notification covered only the low density variety.
3. We have considered the rival submissions. It is true that neither heading 39.01/06 nor the notification defines low density polyethylene.
Though the Customs Tariff, at the relevant time, was not based on the Harmonised Commodity Description and Coding System, it is, in our opinion, permissible to refer to the distinction between low density and high density polyethylene in that nomenclature, since that also is a nomenclature pertaining to International trade and commerce and has since been adopted in India as well. This nomenclature does not use the words 'low', 'medium' or 'high' density in the relevant headings.
However, from the Explanatory Notes, it is clear that polyethylene having specific gravity of less than 0.940 is considered as Low Density Polyethylene and that having specific gravity of 0.94 or more as high density polyethylene. In the absence of any definition of 'LDPE' in the Customs Tariff heading or in the Notification 235/85-Cus., we think it is reasonable to adopt the definition given in the Harmonised Commodity Description and Coding System Explanatory Notes. Accordingly, we set aside the impugned order and allow the appeal with consequential relief.