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TMI Blog1990 (11) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... d why the initial assessment was wrong and the proposed re-assessment was more appropriate. It does not set out the heading in the Tariff Schedule under which the goods are held to fall. And, this is not the first time we observe such short-levy notices issued in cyclostyled forms with brief blanks filled in by the customs authorities under Section 28 of the Customs Act. This tendency to issue show cause notices in a very casual way without setting out in an intelligible way the grounds leading to the allegation of short levy which alone would enable the notice to make his submissions, has to be deprecated. In due course the Asst. Collector passed an order dated 6-9-1985 confirming the demand. This order, to say the least, is cryptic and contains no discussion leading to the decision except for a bald assertion : The goods imported were silicone emulsion and therefore assessable to duty under Heading 39 at 100% + 20% + c.v.d. 40% . Anything but a speaking order. The appeal against this order was dismissed by the impugned order by the Collector (Appeals) who relied inter alia on statutory Chapter Notes 2 and 3 to Chapter 39 of the Customs Tariff Schedule and held that the imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the foaming media. Spreading effectiveness is one of the most important measurable characteristics of a defoamer no matter what the application. Examples of emulsifying or spreading agents are esters, ethoxylated products, sorbitan esters, silicones, and alcohol sulfates." In Volume 20 of the same book, under the head Silicon Compounds (Silicones) - Derived Products , the following passage occurs :- Emulsions of silicone fluids in water are made for convenience in applying small amounts of silicone to textiles, paper, or other surfaces. Concentrations are usually 20-60 wt.% silicone, except for foam-control agents, which may contain as little as 10 wt% silicone. Various emulsifiers are used. The emulsified silicone fluids may be of any type but are usually dimethyl or methylalkyl silicones. Emulsified fluids are also convenient as antifoams. They disperse rapidly in aqueous systems, but for nonaqueous systems, e.g., crude oil or vegetable oils, 100% silicone or a solvent solution of the silicone is used." Shri Sridharan, relying on these passages, submits that the subject product is not a silicone simpliciter but a preparation thereof for its use as an anti-foaming or d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Statutory Note 3(a) to Chapter 39 reads :- 3. Heading No. 39.01/06 is to be taken to apply to materials in the following forms only: (a) liquid or pasty (including emulsions, dispersions and solutions);" 7. The goods in the Precise Impex case (supra) were a foam stabilizer, a water soluble polymeric complex organic compound based on silicones possessing surface active property. The Tribunal referred to its decisions in Collr. of C. Ex., Bombay, v. M/s. Auxichem [1988 (34) E.L.T. 637] and Ceat Tyres of India Ltd. Bombay v. Collector of Cus., Bombay [1988 (35) E.L.T. 635] and held that the correct classification was under Heading No. 34.01/07(3) of the Customs Tariff Schedule and not under Heading No. 38.01/06. 8. In Auxichem case (supra), decided by a 5-Member Bench of this Tribunal, the assessee was importing silicone oil which was being subsequently mixed with some other matter like water and emulsifiers to produce textile processing softeners. Paras 15 and 16 are of relevance and are reproduced below :- 15. The heading in the Harmonized Code which defines silicones is 39.10 and is reproduced below in full: The silicones of this heading are non-chemically defined p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining silicone though a liquid will not be a silicone in primary form, because it is a silicone that has been compounded and mixed, blended etc. 10. Silicones figure in Heading No. 39.01/06 as a specified example of condensation, polycondensation and polyaddition products . The above expression in question has been defined in Chapter Note 2 to Chapter 39 thus : 2. In Heading No. 39.01/06 condensation, polycondensation, polyaddition, polymerisation and copolymerisation products" are to be taken to apply only to goods of a kind produced by chemical synthesis answering to one of the following descriptions : (a) artificial plastics including artificial resins; (b) silicones; (c) resols, liquid polyisobutylene, and similar artificial polycondensation or polymerisation products." It is clear, therefore, that only products of the aforesaid processes, produced by chemical synthesis, and answering to one of the specified descriptions will be covered by the said expression, for the purpose of Heading No. 39.01/06. Silicones is one of the specified descriptions. Now, silicones are polymerisation products. According to the Condensed Chemical Dictionary (10th Edition, revised b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at emulsion; it is only an emulsion preparation used as wetting, mould release or lubricating preparation; otherwise all goods containing polymers or synthetic resins will have to be assessed under 15A. Thus paints, lubricants, adhesives, to name only a few, all contain varying amounts of synthetic polymers in mixtures or emulsions. Silicones find uses even in medicines as antiflatulents. In all these preparations, mixtures, compounds, it is the synthetic polymers that give the products their active, distinctive qualities and properties. For example, in a coating (paint) compound, it is the polymer that coats, protects and binds. The adhesion caused by the synthetic glue is also due to the polymer. It would be a fantastic operation to assess medicines as a silicone, under 15A simply because they contain silicone, even though silicone is the ingredient that gives the medicine its active character. Silicones find wide use as adhesives. They also find use in the preparation of varnishing compounds. To argue as the Department does, all such products must come under 15A. And to travel further, many fibres and synthetic polymers in origin, nylon and polyester being the most well-known. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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