2000 (5) TMI 110 - AT - Central Excise

Summary

Issues:
Correct classification of the product "Adhesive" under tariff sub-heading No. 3905.10 or 3506.00.

Analysis:
The issue in the present appeal revolves around the classification of the product "Adhesive" cleared in bulk form, weighing more than 1 kg. The appellants argue for classification under tariff sub-heading No. 3905.10, while the Revenue contends for classification under sub-heading No. 3506.00. The appellants rely on a Circular issued by the Board, dated 31-8-1990, which clarifies that polymers of Chapter 39, not meant for retail sale in packets of 1 kg. or less, should be classified under Chapter 39. The Circular also states that polymers cleared in bulk form, not for retail sale as glues or adhesives under 1 kg., fall under Chapter 39. The appellants emphasize that their product was cleared in bulk form, not in 1 kg. retail packets, and thus should be classified under Chapter 39.

The respondent, represented by a learned JDR, argues that the Commissioner (Appeals) correctly distinguished the issue from the Circular, stating that the matter concerned the classification of polymers of Chapter 39 with adhesive properties based on packing mode. However, the Tribunal finds this differentiation unconvincing. The Tribunal notes that as per the Circular and HSN Explanatory Notes, if polymers of Chapter 39 are not intended for retail sale in packets of 1 kg. or less, they should remain classified under Chapter 39. Since the product in question was not in a 1 kg. retail packet, it cannot be classified under sub-heading 3506.00 as argued by the Revenue. The Tribunal also cites Supreme Court decisions emphasizing that Excise Authorities must adhere to Circulars issued by the Board and cannot take a different view. Therefore, the Tribunal finds no merit in the Revenue's contentions and sets aside the impugned order, allowing the appeal in favor of the appellants with consequential relief.