1994 (12) TMI 190 - AT - Central Excise

Summary

Issues: Classification of imported product under the Customs Tariff Act.

In this case, the appellant imported Polyvinyl Alcohol Powder to make synthetic glue used as paper adhesive. The classification of the product was initially under Tariff Item 15A, then changed to Tariff Item 68, and later to 3501.90 by the appellant. However, the Department sought to change the classification to Heading 3905.20 for Polyvinyl Alcohol in the Chapter of Plastics. The appellant argued that the product should be classified under Heading 3501.90 as it is primarily an adhesive. The Department contended that since the product is Polyvinyl Alcohol in solution form, it should be classified under Heading 3905.20. The issue raised was whether the product should be classified as an adhesive under Heading 3501.90 or as Polyvinyl Alcohol under Heading 3905.20.

The Tribunal considered the arguments presented by both parties. The appellant's counsel emphasized that the product is a synthetic glue used as an adhesive and should be classified under Heading 3501.90, which covers glues. The Department argued for classification under Heading 3905.20, citing Chapter Note 6(a) and the nature of the product as Polyvinyl Alcohol in solution form. The Tribunal noted that the product, being a synthetic glue used as an adhesive, did not fit under Heading 3905.20, which specifically covered Polyvinyl Alcohol. The Tribunal also observed that there was no other suitable chapter or heading for the product as synthetic glues were not explicitly covered elsewhere.

The Tribunal further analyzed the classification issue based on the nature of the product and relevant tariff provisions. It noted that during the relevant period, the term "glues" in Heading 35.01 did not explicitly cover synthetic glues. However, considering the rule of interpretation that a substance should be classified with the product it most resembles, synthetic glues could be deemed to fall under the category of glues. The Tribunal highlighted that the subsequent tariff changes explicitly included prepared glues and adhesives under Heading 35.06, indicating the inclusion of synthetic glues. Therefore, the Tribunal concluded that the product, being a synthetic glue used as an adhesive, should be classified under Heading 35.01, and the appeal was accepted.