1991 (10) TMI 145 - AT - Central Excise

Summary

Issues: Classification of products under different headings - Heading 3506.90 CET vs. Heading 4005.00 CET vs. Heading 3823.00.

In this case, the primary issue revolves around the classification of various products manufactured by the appellants under different headings in the Central Excise Tariff. The appellants claimed classification under Heading 3506.90 CET as "Prepared glues and other prepared adhesives n.e.s. or included," while the Department sought classification under Heading 4005.00 CET for some items and under Heading 3823.00 for one specific item. The dispute arose from the interpretation of the nature and composition of the products in question.

The appellants initially filed a classification list declaring some products under Heading 4005.00 and others under Heading 3810.00. However, they later submitted a revised classification list placing all products under Heading 3506.00 to avail the benefit of exemption for Small Scale Industry Units. The Department conducted tests on the products and concluded that the items contained rubber as a significant ingredient, leading to classification under Heading 4005.00 and Heading 3823.00. The products were found to have characteristics of compounded rubber unvulcanised in primary form or chemical preparations, as per the test results.

The adjudicating authority ruled that the products did not fall under Chapter 35 as they contained rubber and were classified under Heading 4005.00 and Heading 3823.00. The authority emphasized that even though the rubber content was low (10% to 15%), the essential character of rubber prevailed. The Asstt. Collector classified the items based on chemical examination and extended the benefit of exemption. The lower appellate authority upheld this decision, leading to the current appeal.

The appellants referred to previous tribunal decisions on similar products to support their classification under Heading 3506.00. They highlighted cases where products with compositions akin to the current dispute were classified as prepared adhesives or glues under Heading 35.01 or Heading 3506.00. The appellants argued that the products should be classified based on their composition rather than a mere chemical examination. The tribunal agreed with the appellants, setting aside the lower authorities' order and directing the classification of all products under Heading 35.06, providing consequential relief to the appellants.