Classification of vulcanising solution - Regarding - Central Excise - IV/15/24/87 T.4 Part-I

Classification of vulcanising solution - Regarding Circular No. IV/15/24/87 T.4 Part-I Dated 6-7-1988 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise and Customs, New Delhi Subject: Classification of vulcanising solution - Regarding. Reference is invited to Board's letter F.No. 99/24/87-CX.3, dated 8-2-1988 clarifying that rubber solution made by dissolving duty paid natural in organic solvents like toluene is classifiable under Heading 40.05 of the Central Excise Tariff. 2. A doubt has been raised regarding the classification of vulcanising solution as to whether it is classifiable under heading 40.05 or under heading 35.06. It is a mixture of rubber, sulphur (Vulcanising agent), organic solvents etc. It is manufactured mainly in units where tread rubber is manufactured and is used in tyre retreading/reselling industry as an adhesive for joining the tread rubber strip to the surface of the old tyre which is to be retreaded. The item was being classified under Ch. 3506.00 as a prepared adhesive especially in view of HSN explanatory notes under heading 35.05 [note B(5)]. Further, as per HSN explanatory notes under heading 40.05 [note B(2)] eventhough dispertions and solutions of unvulcanised rubber in organic solvents used for the manufacture of dipped articles or coating finished articles are mentioned as included in heading 40.05, Rubber solution used as adhesive (which is the case in respect of vulcanising solution) has been specifically excluded from heading 40.05 vide item No. (e) of the list of items shown as excluded from this heading. 3. The matter was referred to Rubber Research Institute Kottayam who have opined that it will be more appropriate to classify the item under heading 35.06 than under heading 40.05. A copy of their letter No. CHEM/RT/CUSTOM/88/RES, dated 13-6-1988 is enclosed as Annexure-I. 3.2 Order No. 88/88-D of CEGAT New Delhi in the case of M/s. Elgi Polytex Ltd, Coimbatore [1988 (1) ETR 514] holding that rubber cement/Black vulcanising cement (same as vulcanising solution) is classifiable under heading 35.06 is also relevant in this connection Collector of Central Excise Coimbatore has however, reported that the Department has filed appeal against this order, to clarify it under heading 40.05. 4. It is felt that vulcanising solution is correctly classifiable under 35.06 and Board's clarification on Rubber solution mentioned above may not be applicable to vulcanising solution. This may please be confirmed. In this connection it is informed that CERA has also objected to the classification of the item under 35.06. According to CERA it is classifiable under 40.05. A copy of statement of facts No. 13 issued by CERA is enclosed as Annexure II. Reply has been sent to CERA indicating that the item is classifiable under 35.06 only, as explained above. However, pending Board's confirmation the Divisional Asstt. Collectors have been directed to resort to provisional assessment so as to safeguard revenue.