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TMI Blog1995 (1) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... other hand, the respondents rely on the report of the Chemical Examiner dt. 15-5-1991 which categorically states that the impugned adhesives are only monomers and based on plastics. The certificate produced from CIPET also confirms this. At the time of personal hearing, the advocate drew attention to the cross-examination of the Chemical Examiner who confirmed his earlier opinion. It is also not disputed that polymerisation takes place only at the time of application of the impugned goods at the hands of the customer; the goods remain monomer at the time and place of clearance in terms of Rule 9(1) of the C.E. Rules, 1944. Hence the grounds of the application fall in this regard. Note (1) to Section VII speaks of classification of goods under Chapters 39 and 40 under the given condition, but in the present instance, the goods are classifiable under 3506.00 and it is not disputed in the application. Hence the citing of Note 1 is not relevant. The respondents gave a list of adhesives which were tested under the above-said Chemical Examiner s report categorising them as monomers not based on plastics. Therefore, the order of the Asstt. Collector under review classifying them under 350 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time of application and that point has been admitted by the appellate authority, then the Collector ought to have held that the product is to be classified in terms of S. No. 1 of Notification No. 125/76, dt. 29-4-1987, as an adhesive based on plastic. In this regard, the Revenue is relying on the definition of `plastic as appearing at page 552 of HSN, and the different process of polymerisation as explained at page 551 of the said Explanatory Note. It is also pointed out that the expression `plastic is defined in Note (1) to this Chapter as meaning those materials of Headings 3901 to 3914, which are or have been capable, either at the moment of polymerisation or at some subsequent stage of being formed under external influence (usually heat and pressure), if necessary with a (solvent or plasticiser) by moulding, casting extruding, rolling or other process into shapes which are retained on the removal of external influence. Therefore, it is pleaded that in the instant case, the formation of plastic films at the time of application under the influence of external pressure is akin to the definition of plastic as explained above. Citing the definition, the Revenue submits tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue is seeking S. No. 1, which reads Glues Adhesives based on Plastics . Ld. JDR also submitted that the ingredients in the product is a `monomer and this fact is not contested by the Chief Chemist, in the test report. He also pointed out that although the product is a monomer, yet it requires to be considered as a polymer/plastic, on account of polymerisation taking place at the time of its application. The ld. JDR submitted that this aspect has to be considered for the purpose of classification under S. No. 1 of the notification as a polymer/plastic and not a monomer. He also pointed out that on account of presence of 20% of polymer in the product, it is required to be considered as based on polymer/plastic. 6. Ld. Advocate replying to the grounds of appeal and also to the contention of ld. JDR, submitted that the test results obtained by the department clearly indicated that the product in question is a monomer and not based on plastic and polymer. The Chemical Examiner has answered the question whether the product is based on plastic or not and his opinion is that some addition of minor amount of polymer contents is used as thickening agent for improving the means ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that no chemical reaction takes place during the mixing operations. Anaerobic adhesives bind two substrates by creation of an air free environment. The main application is for fastener, such as lock-studs, bold-nuts, and screws, to produce fail-safe assemblies to withstand heavy vibrations, to resist shock and impact loads and to offer better performance. In addition to locking they also seal the threads. The above property was demonstrated to us on bolts and nuts, and these nuts and bolts were found to be strongly bonded. It was also observed that the excess adhesive material left open to atmosphere did not polymerise. The approximate percentage composition of these adhesives and sealants is as follows :- Ester Monomer 80% Stabiliser 1% Activator 2% Catalyst 4% Thickners (PMMA) 3 to 5% Filler (SILICA and PTFE) 5 to 10% After noting the details of the product, the Chemical Examiner has opined as follows : 1. Anaerobic Adhesives : These are compositions based on reactive monomeric complex organic comp-ounds with additives and fillers. These products cure in the presence of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Chapter Notes to Chapter 39 CET, it would be seen that the definition at the outset itself states that plastics are materials of Heading 39.01 to 39.14. All these materials are polymers and no monomers is included in any of the above headings. Hence in order to call the composition based on plastic it has to contain any of the polymers mentioned under Chapter 39.01 to 39.14, as an essential ingredient. In my opinion therefore, these adhesives and sealant preparations under reference which are essentially based on monomers may not therefore merit to be considered as adhesives based on plastics, though some of them may contain minor amount of Polymers which are used as thickening agents for improving viscosity. As can be seen from the above report, it is clear that the product is adhesives and sealant preparations which are essentially based on monomers, though some contents of polymer is used as a thickening agents for improving viscosity. This portion of the Central Examiner s report appears to have given rise to a doubt to the revenue. However, they have not challenged the other reports of the experts produced by the assessee. The assessee has produced the opinion of one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en, presence of activators and contact with metal, if any, help in polymerisation. 2. It is, therefore, necessary only to characterize the major component, namely the methacrylate ester/esters, and based on it to go on to the choice raised in the first paragraph. 3. These are separate chemically defined organic compounds, defined by the term esters of unsaturated carboxylic acids. A similar product in the monomer category is dimethyl terephthalate which is an ester of a saturated dicarboxylic acid. 4. The methacrylate esters , like dimethyl terephthalate can be considered only as monomers and separate chemically defined organic compounds, so long as they are kept as monomers. Only after polymerisation, if the polymerisation results in resins capable of being moulded into different shapes for various end uses, can they become plastics . As monomers, they are not polymers and definitely not plastics. 5. Therefore adhesives comprising substantially of these monomers should be described as monomer based not polymer of plastic based. 6. On the other hand, an adhesive based on a polymer and a solvent such as polyvinylalcohol solution, whose adhesive action depends mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention of the assessee. This has been done after due application of mind and after a very clear analysis of the evidence on record. Therefore, it cannot be said that the orders passed by both the lower authorities are without any due application of mind. The ld. Chief Chemical Examiner had also not conclusively opined in the matter and therefore, the assessee had established by cross-examining him that the department did not have the entire facility to determine the chemical contents of the product. Therefore, the reports of other experts were obtained, which have been examined by the lower authorities. The conclusions arrived at by them is sustainable. The various grounds raised by the revenue do not have any force and are also supported by any evidence. Therefore, there is no grounds made out by the revenue and to interfere with the impugned order, hence, the appeal is liable to be rejected and it is ordered accordingly. Dated : 31-10-1994 Sd/ (S.L. Peeran) Member (J) 8. [Order per : S.K. Bhatnagar, Vice-President]. - I observe that the appellant s product(s) is basically a mixture prepared by compounding of various chemicals in different proportions. The major consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other items in stocks as indicated by the Respondents in Annexure (V) were not drawn. It is also interesting to note that there are in fact, two reports of Chemical Examiners on record. The second one is dated 25-6-1990 and pertains to Test Memo No. 1/89 whereas earlier report dated 8-12-1988 pertains to Test Memo Nos. 2/87 to 9/87. It has not been clarified what was the reason for yet another test and why it includes a note again on some items such as Anabond 112 and 202. But this report also refers to enclosed write-up and earlier printed literature and what is stated to be therein . These reports emphasise subsequent polymerisation at the time of application (and this is not even disputed by the either side) but that by itself was not sufficient in view of the methods of formation of plastics specifically indicated in Chapter Note 1 of Chapter 39. 15. The opinion of Dr. P. Desikan produced by the appellants, also does not indicate the basis or the tests conducted, but it nevertheless reveals that different products are different in detailed composition; And in some of the products a second polymer Polytetraflouroethylene is also present to the extent of 5 to 10%. It howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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