9911796707
TMI Blog1991 (1) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... cale industries exemption under the said notification. 3. The Revenue has filed Appeal No. 4426/89-C against the order of the Collector in holding the appellants eligible for grant of exemption under Notification No. 175/86 dated 1-3-1986. As both these appeals have arisen together, both have been heard and a common order is passed in this case. 4. The appellant-assessee in this case is a small scale industry holding Central Excise licence for manufacture of paints and varnishes falling under Chapter 32 of CET Act, 1985 and they are selling them in the market in their own brand name for over 16 years. They were also undertaking processing jobs and process paints and varnishes for M/s. Asian Paints (India) Limited in terms of a contract on payment of job charges. They have contended that their unit is a proprietary concern while M/s. Asian Paints (India) Ltd. is a public limited company registered with the D.G.T.D. and holding industrial licences for their manufacturing establishments and they are two different legal entities. They have further stated that they are registered as separate SSI unit and have separate registrations for Sales-tax and Income-tax purposes. 5. They ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order-in-appeal. They filed their objections and placed their evidence but, however, the Assistant Collector held that they are not entitled for benefit of SSI under the Notification No. 175/86 as amended and also classified their product under sub-heading 3204.19 attracting duly at 20% ad valorem. They filed the appeal before the Collector who has granted them SSI exemption under the said notification but has upheld the order-in-original classifying the product under sub-heading 3204.90. 7. They have relied on Chapter Note 2 of Chapter 32 of CET 1985 and they contended that preparation of heading 3213.00 would not be covered by Heading Nos. 3203, 3204, 3205 and 3206. They have contended that Heading 3213 is the most specific heading in respect of goods in question as compared to Heading 3204 which is a mere general heading. It is contended by them that Rule 3 of Rules of Interpretation and relevant judicial decisions of the referred paras it is settled principal that in cases of classification the headings of most specific description shall be preferred to headings providing a mere general description. They have also relied upon Harmonised Commodity Description and Coding Syste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eparations as set out under Chapters 3204.19 and 3206.19 are meant for direct use in the manufacturing process whereas the product in question is only used for modifying specific quantities of white/base white paint stocked by the customers to obtain variety of shades of their choice. The product does not have any independent use but is only used as a painter s aid and not paint by itself and hence it was considered as stainer and classified under Heading 68 of the erstwhile Excise Tariff. 8. During the time of hearing, the appellants have produced Indian Standard Glossary of Terms relating to Paints (Second Revision), IS : 1303 - 1983 which defines stainer type. They have also produced the meaning of Tint, Tinter, Tinting as found in Paint/Coatings Dictionary, page 423 which is reproduced below :- Tint (1) The colour produced by the mixture of white pigment with absorbing (generally chromatic) colorants. The colour of the resulting mixture is lighter and less saturated than the colour without the addition of the white. Tinter - Coloured pigments ground in media compatible with paint vehicles, added in relatively small proportions to already prepared paints to modify their col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct also under the same heading. Both the sides have produced several citations in respect of their pleas. It is not necessary to go through these citations as they are not directly on the product but on well laid down principles on which there cannot be two opinions. 11. We have considered the submissions made by both the sides and also the records and materials produced before us. The classification list describes the product as modifying tint and the classification sought for under Heading 3213 at 10%. The classification list of M/s. Asian Paints (India) Ltd. has also been produced wherein the modified tint has been described under Heading 3213 at 10% ad valorem. The definition of Universal Stainers as given in Painting and Decorating - A.E. Hurst at page 121-122 is reproduced below :- The principle of stocking basic white or grey, which can be tinted by the vendor to the required colour, has become firmly established in America and is also being tried in this country. This has been made possible by the use of so called universal stainers, but perhaps more correctly multi-purpose stainers, since they are compatible with both oil and water media but not all media and, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts to match all colour chips. 4. Some sort of measuring device for the colorants, either tubes of various sizes or dispensers, in which they are kept in bulk form and from which they can be measured out into ready mixed paints in the amounts required to produce the shades desired. The formuation of the colorants with comments on colour books and dispensers is given here". 13. The affidavit of Shri V.M. Bhavdekar, Development Manager, M/s. Asian Paints (India) Ltd. which was relied upon before the Assistant Collector has stated in his affidavit that the product Apcolite Universal Stainer is used for modifying specific quantities of the while/base white paints. He has submitted that by adding a measured quantity of this modifying tint or stain in enamels, plastic emulsion paints, oil paints, distemper etc., a wide range of exclusive shades of colours can be obtained. He has submitted that Apcolite Universal Stainers by their very characteristics and end use are essentially modifying tints falling under the Heading 3213 and not pigments and preparations based thereon falling under sub-heading 3204.19 of CET Act, 1985. He has further stated that pigments and preparations based t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uminophores, whether or not chemically defined. 32.06 - Other colouring matter; preparations as specified in Note 2 to this chapter, other than those of Heading Nos. 32.03, 32.04 or 32.05 inorganic products of a kind used as luminophores, whether or not chemically defined. 32.07 - Prepared pigments, prepared opacifiers and prepared colours, vitrifiable enamels and glazes, engobes (slips), liquid lustres and similar preparations of a kind used in the ceramic enamelling or glass industry; glass frit and other glass in the form of powder, granules or flakes. 32.12- Pigments including metallic powders and flakes, dispersed in non-aqueous media in liquid or paste form of a kind used in the manufacture of paints (including enamels) stamping foils, dyes and other colouring matter put up in forms (for example balls, tablets and the like) or small packings (for example sachets or bottles of liquid) of a kind used for domestic or laboratory purposes". 32.13 - Artist s, student s, or signboard painter s colours, modifying tints, amusement colours and the like, in tablets, tubes, jars, bottles, pans or in similar forms or packings" 16. Chapter Note 2 clearly states that the Heading N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the trade. The Revenue has not placed any evidence to the contrary to deny the classification or for that matter, to reject the materials placed before them in regard to the trade parlance and also the affidavit of Shri V.M. Bhavdekar. There is no reason to deny the classification sought for by the appellants under sub-heading 32.12. It is not necessary to go through the various rulings placed before us by the Counsel. The material on record is sufficient to show that the product is classifiable under sub-heading 32.13. Therefore, the appeal of the appellants has to be allowed. 18. As regards the appeal of the Revenue against the Collector s order in granting exemption under Notification No. 175/86 dated 1-3-1986, it has to be observed that the said order is not sustainable. The learned counsel for the respondent-assessee has placed before us several rulings on this point. The Revenue has not placed any evidence that the assessee s concern is a dummy concern. The various rulings are in favour of the assessee. The Counsel placed before us the following rulings - 1. Poona Bottling Co. Ltd. Another v. Union of India Others [1981 (8) E.L.T. 389 (Delhi)] 2. Lucas ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
