2003 (7) TMI 597 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the cement capsules manufactured by the appellant.
2. Applicability of sub-heading 2502.90 versus sub-heading 29 for the product.
3. Relevance of the product's thixotropic properties.
4. Impact of amendments to tariff headings on classification.
5. Compliance with Indian Standard Institution specifications for rapid hardening cement.
6. Consideration of technical literature and expert opinions.

Detailed Analysis:

1. Classification of the Cement Capsules:
The primary issue is the classification of the cement capsules manufactured by the appellant. The Commissioner classified the product under sub-heading 2502.90, while the appellant contended it should fall under sub-heading 29.

2. Applicability of Sub-heading 2502.90 versus Sub-heading 29:
The heading and sub-heading 2502 cover various types of cement, including Portland cement. The appellant argued that their product, primarily composed of ordinary Portland cement (70%), high alumina cement (15%), non-ferric alum (5%), gypsum (5%), and other chemicals (5%), should be classified under sub-heading 29, which includes "Other" types of Portland cement. The Commissioner, however, classified it under sub-heading 2502.90, which covers "Other" types of cement not specifically mentioned in other sub-headings.

3. Relevance of the Product's Thixotropic Properties:
The presence or absence of thixotropic properties in the product was deemed irrelevant for classification. Thixotropy refers to the property of certain gels that liquefy when subjected to vibratory forces and solidify again when left standing. The affidavit by Vipul Gupta, director of the appellant, stated that the product did not have thixotropic properties, which was not considered significant for classification purposes.

4. Impact of Amendments to Tariff Headings on Classification:
The tariff headings were altered in the Budget of February 1992 and again in 1994. Prior to 1992, sub-heading 20 covered various types of Portland cement, including rapid hardening cement. Post-1992 amendments introduced a generic entry for Portland cement with sub-headings 21 (White cement) and 29 (Other). The Board's circular of 8-3-1996 clarified that all varieties of Portland cement other than white cement should fall under sub-heading 2502.29.

5. Compliance with Indian Standard Institution Specifications for Rapid Hardening Cement:
The departmental representative argued that the cement did not conform to IS:8041:1990 specifications for rapid hardening cement due to the addition of high alumina cement and other additives. However, the Tribunal noted that the presence of these additives did not change the fundamental character of the product as rapid hardening cement.

6. Consideration of Technical Literature and Expert Opinions:
Both sides agreed that the technical literature did not specifically refer to a product like the one in question. The Tribunal found that the addition of high alumina cement and other chemicals did not result in a product completely different from Portland cement. The technical opinion from the Director of the Central Revenue Laboratories, which suggested the product had different properties from rapid hardening Portland cement, was not found convincing enough to classify the product under sub-heading 2502.90.

Conclusion:
The Tribunal concluded that the product should be classified under sub-heading 29, as it predominantly consisted of grey Portland cement with additives that did not significantly alter its character as rapid hardening cement. The appeal was allowed, and the impugned order was set aside.