1997 (8) TMI 297 - AT - Central Excise

Issues Involved:
1. Classification of Dimethicone BPC.
2. Classification of other products containing Dimethicone and Simethicone.
3. Applicability of Notification 31/88-C.E. for exemption benefits.
4. Relevance of the Apex Court judgment in Hico Products Ltd. v. Collector of Central Excise.

Detailed Analysis:

1. Classification of Dimethicone BPC:
The respondent filed a classification list effective from 1-3-1988, claiming the classification of Dimethicone BPC under tariff sub-heading 3003.20, asserting it as a medicament. However, a show cause notice dated 20-1-1989 proposed its classification under sub-heading 3910.00, arguing it is a low polymerized silicone product. The Assistant Collector upheld this classification, stating Dimethicone BPC is an unmixed product, falling under Chapter 39 as it is a silicone oil in primary form. The Collector (Appeals) later classified it under Heading 3003.20, considering it a medicament with therapeutic use. The Revenue's appeal emphasized that Dimethicone BPC, declared as an unmixed product, should be classified under Chapter 39, not Chapter 30. The tribunal agreed with the Revenue, stating Dimethicone BPC is an unmixed product resulting from hydrolysis and not a mixture of two or more constituents. Consequently, it is classified under sub-heading 3910.00.

2. Classification of Other Products Containing Dimethicone and Simethicone:
The other products listed (Dimethicone BPC-poly Dimethylsiloxane, Emulsion of Dimethicone B.Vet C, Silica in Dimethicone suspension B.Vet C, Simethicone U.S.P., Simethicone oral suspension U.S.P.) were initially classified under sub-heading 3823.90 by the Assistant Collector, considering them as chemical mixtures and residuary items of the chemical industry. The Collector (Appeals) reclassified these products under Heading 3003.20, recognizing them as medicaments with therapeutic and prophylactic uses. The tribunal upheld this reclassification, noting these products are mixtures of two or more constituents with therapeutic uses, fitting the definition of medicaments under Note 2(i)(a) to Chapter 30. Thus, they are classified under sub-heading 3003.20.

3. Applicability of Notification 31/88-C.E. for Exemption Benefits:
The Assistant Collector denied the benefit of Notification 31/88-C.E., which exempts products falling under Chapters 28, 29, and 30, as the products were classified under Chapters 39 and 38. The Collector (Appeals) granted the exemption, classifying the products under Chapter 30. The tribunal's final classification (Dimethicone BPC under Chapter 39 and other products under Chapter 30) implies that only the latter products are eligible for the exemption under Notification 31/88-C.E.

4. Relevance of the Apex Court Judgment in Hico Products Ltd. v. Collector of Central Excise:
The Revenue argued that the Apex Court's judgment in Hico Products Ltd. established that Dimethicones and Simethicones fall under Chapter 39, not Chapter 30. The respondent countered that the judgment pertained to the old tariff and is not applicable to the current tariff, which is based on the Harmonized System of Nomenclature (HSN) with specific notes and rules. The tribunal agreed with the respondent, stating the Hico Products judgment is not applicable to the new tariff. The tribunal independently examined the classification, concluding that Dimethicone BPC is an unmixed product under Chapter 39, while other products, being mixtures with therapeutic uses, fall under Chapter 30.

Conclusion:
Dimethicone BPC is classified under sub-heading 3910.00, while other products containing Dimethicone and Simethicone are classified under sub-heading 3003.20. The exemption under Notification 31/88-C.E. applies only to the latter products. The Apex Court's judgment in Hico Products Ltd. is not applicable to the current tariff classification. Appeals are disposed of accordingly.

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