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TMI Blog1993 (11) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... d on Titanium Dioxide (pigment), and the second one was found to be a preparation based on other colouring matter. On 20-9-1991, the Assistant Collector issued a show cause notice to the appellants alleging that the imported goods were preparations based on organic/ inorganic/other colouring matter. The show cause notice referred to Note 3 to Chapter 32 and alleged that the crayons for which the goods had been imported were colouring preparations. The appellants were asked to show cause as to why the goods already ex-bonded and also the goods lying in the warehouse should not be assessed under Heading 3204.17 as a preparation based on colouring matter (pigment) and under Tariff Heading 3206.10 as a preparation based on Titanium Dioxide and why the appellants should not pay duty amounting to Rs. 4,86,371.85 instead of Rs. 2,08,882/- already paid. The appellants claimed that the goods were correctly classifiable under Heading 39.01. They contended that the goods were not based on colouring matter and they were not used as ingredients in the manufacture of colouring preparations. They also submitted that crayons could not be regarded as colouring preparations. They pointed out that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncise Oxford Dictionary and Oxford Advanced Dictionary, "preparation" implies "specially prepared". He contended that 'Crayon' being an item which is specially prepared for imparting colour to paper it has to be deemed as a preparation. In this regard he referred to the Tribunal's decision in the case of Lotus Inks, Madras v. Collector of Customs, Madras reported in 1984 (18) E.L.T. 387 wherein while examining the distinction between "Dyeing" and "Colouring", the Tribunal had observed that "colouring" can be by coating, staining, covering, the purposes being protection, beautifying, giving a surface property not present in the coloured material, writing etc. 4. In his rejoinder, the learned Counsel submitted that the case law cited by the learned SDR was not relevant to the point at issue. He stated that the imported material was essentially a moulding powder which on moulding takes the shape of 'Crayons'. He contended that under these circumstances the material in question could not be deemed as a 'colouring preparation' or 'master batch' since such preparations are not used for moulding purposes. 5. We have examined the records of the case and considered the submissions made o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emsp; - - - (d) - - - - - In addition to the exclusions mentioned in Note 2, the Chapter excludes (a) Concentrated dispersions of colouring matter in plastics having the character of products of Chapter 32; see, for example, the Explanatory Notes to Heading 32.04 [paragraph (1)(C) regarding concentrated dispersions of colouring matter in plastics, and paragraph (II)(2) concerning organic luminophores e.g. rhodamine B in plastics]. Heading 32.05 (seventh paragraph concerning concentrated dispersions of colour lakes in plastics) and Heading 3206 (Part A) sixth paragraph, sub-paragraph (1) concerning concentrated dispersions of other colouring matter in plastics). (b) Preparations of polymers of Heading 39.01 to 39.13 specially formulated for use as glues or adhesives and products of Headings 39.01 to 39.13 put up for retail sale as glues or adhesives, not exceeding a net weight of 1 kg. (Heading 35.06). (c) Plates and articles thereof (other than the goods of Heading 39.198 or 39.19) printed with motifs, characters or pictorial representations, which are not merely incidental to the primary use of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d are used as raw materials for colouring rubber, plastics, etc. in the mass. (D) -------- (E) Other preparations based on synthetic organic colouring matter of a kind used for colouring any material or used as ingredients in the manufacture of colouring preparations. However, the preparations referred to in the last sentence of Note 3 to this Chapter are excluded. 32.06 OTHER COLOURING MATTER : PREPARATIONS AS SPECIFIED IN NOTE 3 TO THIS CHAPTER, OTHER THAN THOSE OF HEADING NO. 32.03, 32.04 OR 32.05; INORGANIC PRODUCTS OF A KIND USED AS LUMINOPHORES. WHETHER OR NOT CHEMICALLY DEFINED. 3206.10 Pigments and preparations based on titanium dioxide. 3206.20 Pigments and preparations based on chromium compounds. 3206.30 ........ 3206.41 ........ 3206.42 ........ 3206.43 ........ 3206.49 ........ 3206.50 Inorganic products of a kind used as luminophores (A) OTHER COLOURING MATTER; PREPARATIONS AS SPECIFIED IN NOTE 3 TO THIS CHAPTER OTHER THAN THOSE OF HEADING NO. 32.03, 32.04 OR 32.05 This heading covers inorganic colouring matter or colouring matter of mineral origin. The heading excludes, however : (a) ----- - (b) ------ (c) ----- - The colouring matter of this headin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 'preparations' which are excluded from the scope of Chapter 39 in terms of the 'General' notes under Heading 3901.10 of the HSN read with Note 3 of Chapter 32 of HSN in terms of which preparations used for colouring any material or used as ingredients in the manufacture of colouring preparations fall under Headings 32.03 to 32.06. Further, the Notes (C) and (E) under Heading 32.04 also provide that the heading covers preparations based on synthetic organic colouring matter of a kind used for colouring any material or used as an ingredient in the manufacture of colouring preparations. The imported material based on synthetic organic colouring matter was admittedly meant to be used in the manufacture of 'Crayon' which is a preparation for imparting colour to paper. For these reasons, in our view, in terms of Note (C) to Heading 32.04 the material composed mainly of polyethylene and colouring matter other than that based on Titanium Dioxide was classifiable under Heading 3204.17 as held by the Collector (Appeals). 9. It is seen that on test a part of the imported goods was found to consist of synthetic resin, wax, inorganic pigment (titanium dioxide) and fillers. Evidently these go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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