1988 (3) TMI 315 - AT - Central Excise

Summary

Issues: Classification of imported product for countervailing duty under different Tariff Items

Issue 1: Classification under Tariff Item 15A CET
The case involved the classification of an imported product, polycyclopentadiene known as Resin P-3 in solution form, for the purpose of countervailing (C.V.) duty. Initially assessed under T.I. 14 CET, a less charge demand was issued later under T.I. 15A CET. The original authority confirmed the less charge demand, considering the product as artificial resins assessable for C.V. duty under T.I. 15A. On appeal, the Collector of Customs (Appeals) classified the goods under T.I. 68, stating the product is a composite one and a binder, not having plasticity characteristic. However, the Collector's order lacked reasoning for not treating the product as liable to C.V. duty under T.I. 14 CET.

Issue 2: Appellant's Argument for Classification under Tariff Item 15A CET
The Collector of Customs, Bombay, appealed against the Collector of Customs (Appeals) order, arguing that the imported product should be classified under Tariff Item 15A as resin in solution form. Relying on Chapter Note 4 of Heading 32.04/12 CET, the Collector contended that the product falls under this heading if the weight of the solvent exceeds 50% of the solution. The appellant asserted that the product, described as P-3 resin, should be classified under T.I. 15A as it does not specify plastic characteristics, contrary to the lower appellate authority's view.

Issue 3: Respondent's Argument Against Classification under Tariff Item 15A CET
The respondent's advocate argued that the specific forms mentioned under sub-item 15A(1) do not include resin in solution form, as in the imported product consisting of 36% resin and the rest solvent. Citing a Delhi High Court judgment, the advocate contended that a solution of resin is a combination of two different substances, resin, and solvent, not covered under the forms specified in T.I. 15A(1).

Judgment and Analysis
The Tribunal agreed with the Delhi High Court's decision that a resin in 'liquid form' differs from a 'solution of resin,' which is a combination of resin and solvent. As the imported product, Resin P-3, was in solution form with toluene solvent, it could not be classified under Tariff Item 15A CET at that time. Therefore, the appeal was rejected, and the impugned order was confirmed. The cross-objections were also disposed of in the same manner, maintaining the classification under T.I. 14 CET for countervailing duty.