1986 (6) TMI 132 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the product 'Diakanol AMH' under the Central Excise Tariff.
2. Binding nature of tariff advice and trade notices on the Revenue Authorities.
3. Interpretation of technical and scientific terms in the Central Excise Tariff.

Issue-wise Detailed Analysis:

1. Classification of the product 'Diakanol AMH' under the Central Excise Tariff:
The primary issue revolves around the classification of 'Diakanol AMH,' a product manufactured by the respondent. The respondent argued for classification under tariff item 68, citing its use in the textile industry and referring to Tariff Advice No. 43/77. The Revenue, however, contended that the product should be classified under tariff item 15A(1) based on its chemical composition as an aqueous solution of polyacrylamide synthetic resin. The Tribunal observed that 'Diakanol AMH' is manufactured from 'Sorgen-50,' which is derived from acrylamide, and polyacrylamide is a derivative of polyacrylic. The Tribunal referred to the Central Excise Tariff, which includes polymerization and co-polymerization products under Item 15A(i). Citing the Supreme Court's judgment in Dunlop India Ltd. and Madras Rubber Factory Ltd. v. Union of India, the Tribunal emphasized that a product should be classified under a specific item if it fits the description, rather than a general or residuary item. Consequently, the Tribunal concluded that 'Diakanol AMH' is correctly classifiable under tariff Item 15A(i).

2. Binding nature of tariff advice and trade notices on the Revenue Authorities:
The respondent relied on Tariff Advice No. 43/77 and several judgments to argue that the trade notice is binding on the Revenue Authorities. The Tribunal considered the judgment of the Gujarat High Court in Navgujarat Paper Industries v. Superintendent of Central Excise, which held that trade notices are binding on the department. However, the Tribunal also referred to the Bombay High Court's judgment in The Union of India v. The Elphinstone Spinning and Weaving Mills Co. Ltd., which stated that even if wrong trade notices are issued, the government is not estopped from arguing the correct interpretation of the statute. The Tribunal concluded that the tariff advice in question cannot override the clear and specific entry in the Central Excise Tariff.

3. Interpretation of technical and scientific terms in the Central Excise Tariff:
The Tribunal examined the technical and scientific nature of the terms used in tariff Item 15A. Referring to the Bombay High Court's judgment in Chemicals and Fibres India Ltd. v. Union of India, the Tribunal noted that terms like polymerization and polyacrylamide must be understood in their technical and scientific sense. The Tribunal emphasized that Item 15A covers a class of products defined by their chemical composition and processes, and thus, the classification should be based on these scientific criteria rather than popular or commercial usage. The Tribunal reiterated that the chemical composition of 'Diakanol AMH' aligns with the products described under Item 15A(i), thereby justifying its classification under this item.

Conclusion:
After thorough consideration of the facts, chemical analyses, and relevant legal precedents, the Tribunal held that 'Diakanol AMH' is correctly classifiable under tariff Item 15A(i) of the Central Excise Tariff. The Tribunal dismissed the respondent's reliance on tariff advice and trade notices, emphasizing the precedence of specific statutory entries over general or residuary classifications. Accordingly, the Tribunal allowed the Revenue's appeal.