1997 (4) TMI 329 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the adhesive product under the appropriate tariff heading.
2. Determination of whether the product is an adhesive or compounded rubber.
3. Applicability of previous tribunal decisions to the present case.
4. Validity of the Chemical Examiner's report and other evidentiary materials.

Detailed Analysis:

1. Classification of the Adhesive Product:
The primary issue for determination is whether the product in question should be classified under Heading 40.05 or 35.06 of the Central Excise Tariff. The appellants argued that the product is an adhesive and should be classified under Heading 35.06, while the respondents contended it is compounded rubber and should be classified under Heading 40.05.

2. Determination of Whether the Product is an Adhesive or Compounded Rubber:
The appellants contended that their product consists of organic solvents and accelerators and does not contain vulcanizing agents, plasticizers, extenders, thickeners, and fillers as mentioned in the Harmonized System of Nomenclature (HSN) notes. They argued that the product should be classified as an adhesive under Heading 35.06, as it is used for bonding substances together by surface attachment. They cited the definition of adhesives from various authoritative sources, including the Encyclopedia of Chemical Technology and Hawley's Condensed Chemical Dictionary, which state that adhesives can be made with a rubber base and do not necessarily need to contain resin.

3. Applicability of Previous Tribunal Decisions:
The appellants relied on previous tribunal decisions, specifically in the cases of Elgi Polytex Ltd. and Deccan Rubber Solution Manufacturing Company, where similar products were classified under Heading 35.06. They argued that their product is similar to those considered in these cases, where the absence of resin did not preclude classification as an adhesive. The tribunal in the present case agreed with this reasoning, noting that the functional characteristics and use of the product as an adhesive were paramount.

4. Validity of the Chemical Examiner's Report and Other Evidentiary Materials:
The appellants challenged the Chemical Examiner's report, arguing it was non-speaking and lacked material evidence. They pointed out that the report's conclusion that the product consists of unvulcanized rubber in a volatile organic solvent was not supported by detailed analysis. The tribunal found that the Chemical Examiner's report did not provide sufficient evidence to classify the product under Heading 40.05. The tribunal also considered the Central Board of Excise & Customs Circular dated 11-8-1987, which supported the appellants' contention that rubber-based adhesives could contain various ingredients, but rubber is the essential ingredient.

Conclusion:
The tribunal concluded that the product in question is an adhesive and should be classified under Heading 35.06. The impugned order classifying the product under Heading 40.05 was set aside, and the appeal was allowed. The tribunal relied on authoritative definitions, previous tribunal decisions, and the Central Board of Excise & Customs Circular to arrive at this conclusion. The tribunal emphasized the importance of the functional characteristics and use of the product in determining its classification.