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Central Excise - Classification of binding agents and wetting agents used in the textile industry - Clarification regarding - Central Excise - 43/89Extract Central Excise - Classification of binding agents and wetting agents used in the textile industry - Clarification regarding Circular No. 43/89 Dated 5-7-1989 [From F. No. 92/4/89-CX.3] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Central Excise - Classification of binding agents and wetting agents used in the textile industry - Clarification regarding. A doubt had been raised about the correct classification of binding agents and wetting agents used in the textile industry. 2. The matter also came up for discussion at the South Zone Tariff Conference held at Madras on the 29th and 30th May, 1989. The Collector of Central Excise, Madurai, the sponsoring Collector, explained that for binding agents and wetting agents used in the textile industry the manufacturers have claimed classification under Heading No. 38.09 of the schedule to the Central Excise Tariff Act, 1985. Wetting agents : It is obtained in the form of a solution when Teepol (4.5 Kgs.), Anionic detergent (7 Kgs) and Trietbonolamine (0.2 Kgs) are added and mixed at normal room temperature in 90 Kgs. of water. All the chemicals dissolve in the water and the resultant is known as wetting agent or wetting solution. The solution so obtained is used captively in the manufacture of cotton yarn. The yarn in rove form is treated with this wetting agent and thereby the rove gets wetted. The wetted rove is twisted and heat-set. The wetness prevents formation of hairy fibres on the surface of the yarn. Thus the product is used during the manufacture of the yarn and not in the finishing of the yarn after its manufacture. The manufacturers are claiming the classification of wetting agents under heading No. 38.09 as finishing agents. The Collector reported that the product is classified under sub-heading No. 3402.90. After testing the samples, the Chemical Examiner has also opined that the term 'finishing' with reference to 'textiles' is normally associated with fabrics and the samples of the wetting agents possess surface-active property satisfying conditions (a) and (b) of Note 3 to Chapter 34 of the CET. 3. The Conference noted that the wetting agent is not used during the process of finishing of the yarn already formed but it is actually used at the initial stage of formation of the yarn and prevents manufacturing defects. The Conference also took note of the Chemical Examiner's opinion discussed above. 4. The Conference concluded that wetting agents are a preparation of surface-active agents covered by Heading No. 34.02 of the CET in view of the reasons given above and that it cannot be classified as a finishing agent. This is supported by the HSN Explanatory Notes on page 485 under Heading No. 34.02, according to which surface active preparations are used for their wetting properties, among others, in many industrial applications such as wetting agents and emulsifying agents by the textile industry. The Conference decided that the wetting agents which is made out of anionic detergent is a surface-active preparation falling under Heading No. 34.02 of the CET and would qualify for exemption under notification No. 101/66-CE (S.No. 2 thereof) if they fulfill the prescribed conditions. 5. The Board have accepted the opinion of the Conference in regard to the classification of 'wetting agents' used in the textile industry. 6. However, the classification of the binding agents used in the textile industry, is being examined in consultation with the Dy. Chief Chemist, CRCL, New Delhi. Therefore, separate instructions will follow regarding the classification of binding agents used in the textile industry. 7. The above guidelines may be brought to the notice of the lower field formations and the trade interests may also be suitably advised. 8. All pending assessments may be finalised on the above lines.
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