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TMI Blog1995 (1) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld. Assistant Collector has further held that although there is Board's instruction to the contrary, yet the product being in the form of paste, it merits classification under Chapter 38, as per its Note (a), as 'miscellaneous products of Chemical or allied industries', under appropriate sub-heading 3801.19. As a result, duty for clearance made for the period 1-3-1986 to 1-4-1986 was confirmed. On appeal, the Collector (Appeals) also rejected the prayer of the asse- ssee for classification of the product under sub-heading 3206.12 of the Central Excise Tariff, 1985, on the ground that the Note (a) to Chapter 38 specifically covers "Carbon in the form of paste". However, the ld. Collector (Appeals) has disagreed with the Assistant Collector's finding that Chapter Heading 32.06 is also excluded by virtue of note 2, on the ground that the said note excludes only "pigments dispersed in non-aqueous media in liquid or paste form". The Ld. Collector (Appeals) has held that it does not emerge from Assistant Collector's order that : "It does not emerge dispersed in the instant case in any non-aqueous media. In the absence of this the mere fact being in paste form is not enough to attra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucts'. They submit that Chapter 38 is not relevant as it deals with chemical of allied industries and that this chapter is a residual chapter and only when product is not classifiable under Chapters 28 to 38 is resorted to. So, they point out sub-heading 3801.19 is a further residuary heading. They also point out that Note(a) to Chapter 38 reads as "Artificial graphite or other carbon in the form of paste blocks" etc. They submit that it is the other carbon in the form of paste and not in the carbon black admixture which falls in this heading. It is, their further submission that Carbon Black is classified under Chapter 28 being one of the main ingredients and hence, it cannot be called as product of "other carbon". They also relied on the Notification No. 114/73 as amended, issued under Chapter Heading 32 which exempts mixtures of the nature of pigments prepared by admixture of goods mentioned in its annexure, in which at Serial No. 8 is mentioned 'Carbon Black' also. They submit that the product Acrylene Black is an admixture of Carbon Black inter alia with water. Therefore, they submit that understanding of the department is also in their favour, in view of this Notification as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion being in aqueous media i.e. water, it is not excluded from Chapter 32. However, we notice that ld. Collector has not given any reasons for excluding the Chapter 32 and has merely agreed with ld. Assistant Collector for classifying under Chapter 38. As we have noticed ld. Assistant Collector has also not given any reasons for classifying under Chapter sub-heading 3801.19. Chapter 38.01 reads: Miscellaneous products of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included. Rosin and resin acids, and derivatives thereof; rosin spirit and rosin oils; run gums: 3801.11 -- Ester gums 3801.12 -- Run gums 3801.19 -- Other As can be seen 3801.19 is a double dash of main dash that is Rosin, and resin acids and derivatives thereof; rosin spirit and rosin oils; run gums. The department having admitted the position of the item being a colouring matter i.e. a pigment, the classification under Chapter 3801.19 does not arise at all and it is inappropriate. 9 Now, we have to examine as to whether the claim of the appellant for classification of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower authorities have also not considered the various sub-headings under Chapter 32, it is but proper that the matter is remanded to the original authorities for de novo consideration. The appellants be directed to produce evidence and materials to substantiate their claim and they be given opportunity of hearing before deciding the case afresh. 11. [Order per : S.K. Bhatnagar, Vice President]. - I observe that in this case the dispute is regarding classification of "Acrylene Black FB & FG". However this product has been described differently in different parts of the order as well as different parts of the appeal memo read with the written submissions filed by the appellants. 12. Even the process of manufacture and the purpose has been described differently at different places. 13. This is apparent from the fact that in the Order-in-Original the A.C. refers to the problem as that of classification of "Acrylene black FB & FG (Emulsion of Carbon Black)' and captive consumption of "Acrylene black organic pigment dyestuff powder" under the subject heading and in the brief facts he refers to the question of classification of the product described as "Emulsion of Carbon bla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show any chemical test report or copy of the relevant classification lists. 19. There are many headings under which Carbon products (of various forms of carbon) fall and the classification depends upon their characteristics and the criteria mentioned under each heading (read with Chapter Notes and Section Notes and the rules of interpretation); hence in the absence of any chemical test report and the inability of the appellant to present the facts properly, it is not possible to arrive at any specific decision. 20. It is however, obvious that Carbon products could not be described as "inorganic". 21. Moreover, an emulsion can be formed only by adding immiscible liquids together and not by adding a powder to a liquid. In fact Emulsions, True Solutions & Suspensions as commonly understood are distinguished both technically as well as commercially. This will be evident from the following. 22. Emulsion has been defined as : "A stable mixture of two or more immiscible liquids held in suspension by small percentages of substances called emulsifiers." In the Condensed Chemical Dictionary (10th Edition) by Bessner G. Hawley. 23. Whereas in the Encyclopedia of Chemical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re us the test report referred to by the A.C. in his order and the Collector (Appeals) had erred in not alluding to it at all. 26. Learned D.R. is also unable to show the test report. 27. I, however, agree with the Learned Member (J) to the extent that even with reference to the agreed position Heading 3801.19 is ruled out in view of the reasons indicated by him but in my opinion, whether Chapter 38 can be ruled out is a different matter as would be evident from what follows. 28. In so far as Chapter 28 is concerned I may mention that the description at page 6 of the order relates to Chapter 28 of 1987-88 Tariff whereas the relevant period for our purpose is 1986-87 Tariff as the classification lists in question are 2/86-87 and 3/86-87 as per the Order-in-Original. 29. Chapter 28 as per 1986-87 Tariff relates to "INORGANIC CHEMICALS; ORGANIC OR INORGANIC COMPOUND OR PRECIOUS METALS; OF RARE EARTH METALS, OF RADIOACTIVE ELEMENTS OR OF ISOTOPES". It includes carbon under chemical elements under Heading 28.01. The sub-heading "2801.20 - carbon (including carbon blacks and other forms of carbon not elsewhere specified or included)". 30. This heading has to be read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, as we have seen above the matter placed before us is not sufficient to enter into this excercise. We can only mention that the Collector (Appeals) is right in observing that admittedly the medium in this case is aqueous and not non-aqueous therefore, and to that extent the material is not hit by Chapter Note 2 of Chapter 32 but that was by itself not sufficient to decide the classification and Notes 5 & 6 are equally important and there is a very thin line between dyes and pigments. Therefore, one has to be very careful and cautious. 36. From the above discussion it is evident that neither the A.C. nor the Collector has looked into all the relevant aspects. I therefore, set aside the impugned orders and remand the matter to the A.C. for re-consideration in the light of the above observations, the technical and other relevant aspects and the law as it stood at the relevant time with the further direction that he should call for the chemical test report and ascertain the factual position before venturing into classification aspect. The A.C. should give the appellant another opportunity of making submissions before he finally decides the matter. 37. [Order per : G.R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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