1996 (3) TMI 342 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the product Vernatan R-7 under the Central Excise Tariff.
2. Applicability of Notification No. 208/69-C.E. for exemption.

Detailed Analysis:

1. Classification of the Product Vernatan R-7 under the Central Excise Tariff:
The primary issue in this case is the classification of Vernatan R-7, described by the appellants as a Synthetic Resin Tanning Agent. The appellants argued for its classification under Item 15-AA as 'Organic Surface Active Agents and Surface Active Preparations,' or alternatively under Item No. 68 of the Tariff. However, the jurisdictional Central Excise Authorities classified it under Item No. 15-A(1) of the Tariff, considering it a condensation product of formaldehyde, amide, and lignosulphonate in powder form, similar to amigen in composition.

The Tribunal noted the manufacturing process of Vernatan R-7, which involves a reaction of dicyandiamide, formalin (37% formaldehyde), lignosulphonate, sodium bisulphite, and ammonia. The product was found to be a condensation product of amide and formaldehyde along with a small amount of lignosulphonates, similar to Amigen, and described as a light brown powder.

The Tribunal referred to the technical literature and chemical dictionaries to understand the nature of the product. It was established that the product could not be classified under Item No. 15-AA as it does not meet the characteristics of 'Organic Surface-Active Agents' or 'Surface-Active Preparations,' which are primarily cleaning agents.

The Tribunal upheld the classification under Item No. 15-A(1), which covers condensation products and artificial resins. The product's resinous properties and the manufacturing process align with the description under this item. The Tribunal also referenced the case of Chemicals and Fibres India Ltd. v. Union of India, where the Bombay High Court emphasized the technical and scientific nature of products under Item 15-A.

2. Applicability of Notification No. 208/69-C.E. for Exemption:
The appellants sought the benefit of Notification No. 208/69-C.E., which provides exemption to Organic Surface-Active Agents and Surface-Active Preparations if they meet certain conditions regarding surface tension value. However, since the product was not classified under Item No. 15-AA, the exemption notification was deemed inapplicable.

Conclusion:
The Tribunal rejected the appeal, affirming the classification of Vernatan R-7 under Item No. 15-A(1) of the Central Excise Tariff. The product did not qualify for classification under Item No. 15-AA, and thus, the exemption under Notification No. 208/69-C.E. was not applicable. The Tribunal found no infirmity in the orders passed by the Assistant Collector of Central Excise, Panvel, and the Collector of Central Excise (Appeals), Bombay.