2010 (4) TMI 539 - AT - Central Excise

Padding Solution - Classification - dispute relates to classification of three products. Chemical literature, chemical examiner s report and Chapter Note 3(e) showing impugned goods basically resins in aqueous solution obtained by condensation between urea and aldehyde. As per HSN Explanatory Notes resins in aqueous solution ought to be considered in primary form and Chapter Heading 3909 of Central Excise Tariff covers resins in primary form. Also interpretative Rule 3(a) require specific entry to be preferred. Held that - classification under sub heading 3909.10 and not under heading 3809.

Issues: Classification of three products under SH 3909.10, Opportunity of personal hearing, Correct classification of goods, Challenge against demand of duty

Classification of three products under SH 3909.10:
The judgment involves two appeals filed by the assessee regarding the classification of three products under SH 3809.00 and SH 3909.10. The Assistant Commissioner initially approved the classification list, but the department disagreed and filed an appeal, which was allowed by the Commissioner (Appeals) classifying the goods under SH 3909.10. The appellate authority relied on chemical literature and technical terms to support the classification. The appellant argued that the products were not pre-polymers or urea resins but finishing/cross-linking agents used in textile and leather industries, hence should be classified under SH 3809.00. The Chemical Examiner's report described the products as condensation products based on urea and aldehyde, fitting well under SH 3909.10 according to Interpretative Rule 3(a. The tribunal upheld the classification under SH 3909.10 based on the evidence presented, dismissing Appeal No. E/311/99.

Opportunity of personal hearing:
The appellant alleged that no opportunity of personal hearing was provided by the lower appellate authority. The appellant contended that the chemical test report was incorrect and that the goods should not be classified under headings 39.01 to 39.11, which they argued apply only to primary forms of plastics. They claimed that the padding solutions were not primary forms of plastic but were obtained through a reaction of formaldehyde and urea. The appellant also argued that the end-use of the products was not considered by the authorities. However, the tribunal found no evidence that the appellant requested a retest of the samples by the Central Revenues Control Laboratory to contest the Chemical Examiner's report, leading to the dismissal of the appeal.

Correct classification of goods:
The judgment delves into the detailed chemical composition and properties of the products in question, highlighting their condensation polymer nature based on urea and aldehyde. The tribunal analyzed various chemical literature, including the Encyclopedia of Polymer Science and Technology, to determine the correct classification. The tribunal emphasized that the specific descriptions of the goods as urea resins under SH 3909.10 aligned with the evidence presented, justifying the classification under SH 3909.10 as per Interpretative Rule 3(a.

Challenge against demand of duty:
The remaining appeal challenged the demand of duty based on the classification of the goods. The appellant contested the demand on the basis of classifying the goods under SH 3809.00, which was dismissed as the classification stood in favor of the Revenue under SH 3909.10. The tribunal upheld the classification decision, leading to the dismissal of Appeal No. E/649/03 regarding the demand of duty.

In conclusion, the judgment thoroughly analyzes the classification issues, the opportunity of personal hearing, the correct classification of goods based on chemical composition, and the challenge against the demand of duty, ultimately upholding the classification under SH 3909.10 and dismissing both appeals.

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