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TMI Blog1983 (9) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... ch directed Shri K.D. Tayal, SDR, to ascertain how the Department was assessing similar products manufactured by two other companies. It was directed that the necessary information should be filed by 18-4-1983 4. In his letter dated 20-4-1983 addressed to the Registrar, Shri Tayal had intimated that the product was being manufactured by the following 3 units :- (1) M/s. Amar Dye Chemicals Ltd., (2) M/s. Untied Carbon India Ltd., (3) M/s. Quality Industries, Dombivli. He had further intimated that each of the units was paying duty under Item 65 CET. 5. Against this background, the matter was taken up for hearing. Shri Tamhane, who appeared for the appellants, made the following submissions :- (1) According to their information, two of the three units mentioned in Shri Tayal s letter dated 20-4-1983, namely M/s. Quality Industries and M/s United Carbon India Ltd., were paying duty under Item 65 but under protest. Further they were selling the goods exclusively to their industrial customers other than those engaged in rubber or rubber products, (At this stage it would be helpful to note that the appellants products namely Hicar-Ion is also marked by its chemical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration to the issue. Item 65 of the Central Excise Tariff, which is under discussion in this case, contains the following description :- 65. Rubber processing chemicals, the following, namely :- (1) Accelerators (2) Antioxidants . The Department s case in brief is that Di-butyl Para Cresol is mentioned in chemical literature as an antioxidant for rubber (as seen from the Chemical Examiner s report) and accordingly it has to be classified under Item 65. No consideration has been given to the other possible uses of this substance, or the predominant use. 8. In our Order No. 250/1983-C, dated 19-5-1983, we had dealt with the same question, but with reference to imported goods. In that case we observed that almost every chemical has more than one use, and it would not be proper to classify it with reference to only one use unless that one is the predominant or common use. On the evidence before us in that case we were unable to hold that the predominant or common use of BHT was as a rubber antioxidant. We were therefore, unable to sustain the finding of the authorities below that the goods were a rubber antioxidant and liable to countervailing duty with reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the description of one of the sub-items, they would ipso facto be classifiable under the main item. The case of Item 65 is however quite different. Here the main heading refers to rubber processing chemicals and the sub-headings to accelerators and antioxidants . In this case accelerators and antioxidants cannot be regarded as species necessarily falling within the genus of rubber processing chemicals . On the other hand, each of these terms represents a genus, based on the functions which they perform. Thus, rubber processing chemicals are chemicals used in the processing of rubber. Accelerators are substances which increase the speed of a chemical reaction; and antioxidants are substances which delay the oxidation of paints, plastics, rubbers etc. (see Chambers Dictionary of Science and Technology, Revised Edition, 1982). Therefore, each of the three terms is a functional description and not a description based on composition as is the case with Item 14C or 14H. A substance is an antioxidant if it performs the function of an antioxidant as described above. But in order to make that substance assessable under Item 65 it has to be capable of being described not only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rubber processing chemicals , ignoring the other uses. 15. Shri Tamhane had filed a very interesting compilation giving examples of various substances which, under different Tariff Advices, were considered to fall outside Item 65, although technical literature showed that one of their uses was as rubber processing chemicals. Among these are Aniline Oil; Diphenylamine; Mone/Di/Tri-Ethanolamines; Picolines (Beta or Gamma), and Hexachloroethane. This would indicate that the Department itself has in several cases followed the same approach in interpreting Item 65 CET as we have in this case. 16. Shri Tayal had argued that the end use of the goods was not relevant. This is again based on a misapprehension. Certainly the use to which a particular consignment of goods is put cannot determine the classification of those goods generally. But where the classifications is related to the function of the goods (as in this case) the predominant use of those goods is very relevant and important. In the matter before us also we are not concerned with the end use of any particular consignment of the goods, but with the predominant use of the goods as a whole. As we have already observed, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to natural and synthetic rubber to give them qualities necessary for conversion into finished goods are defined by the U.S. Tariff Commission as Rubber processing chemicals . Amongst the chemicals defined and described as Rubber processing chemicals are some which are also technically known as accelerators and antioxidants , on account of their exact function, not only in processing Rubber but in there chemical processes as well; (b) an accelerator is defined in the Condensed Chemical Dictionary by Hawley as a - (i) compound, usually organic, that greatly reduces the time required for vulcanization of natural and synthetic rubbers, at the same time improving the ageing and other physical properties..... The introduction of organic accelerators in the early twenties was largely responsible for the successful development of automobile tires and mechanical products for engineering uses. A few inorganic accelerators are still used in low-grade products, e.g., lime magnesium oxide, and lead oxide; (ii) compound added to a photographic developer to increase its activity, such as certain quarternary ammonium compounds and alkaline substances; (iii) particle accelerator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued according to that which is its primary meaning, namely, its technical or scientific meaning - per Fry J. in 16 Ch. D. 718 at p. 720-Hold and Company v. Collyer cited with approval in A.I.R. 1967 S.C. 1454-Sales Tax Commissioner v. M/s. J. Singh - and referred to in 1982 E.L.T. 917 adverted to supra-but not cited]; (iv) it is inconceivable that any substance could be described twice over in a tariff entry in terms of its function or use; (v) if use was the legislative intent, it could have been manifested by the expression used in [Entries Nos. 4(I) (1-4), 14(D)] or used for [entry No. 7] or used as [entry 14DD] or normally used [entry 33(C)]. So also if predominant use was the intent, it could be conveyed by an unequivocal expression thereof, and not left to be inferred by a generic technical description. The entry could then have read - Accelerators or Antioxides predominantly used as Rubber processing chemicals ; (vi) Rubber processing chemicals and amongst them accelerators and antioxidants having, as they do, a technical and scientific meaning and understood even in industrial circles, as denoting a group of chemicals, it is uncalled for to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is, that their Lordships observed that, if the proportion of carbon dioxide in the kiln gas is to be taken into account to identify it as carbon dioxide, one can equally plausibly say that it was nitrogen that was produced and not carbon dioxide, inasmuch as, the proportion of nitrogen was much higher than that of carbon dioxide in the mixture of gases that emanates. It is not, therefore, as if their Lordships proceeded to consider the composition of the emanating gas with a view to ascertain its identity. On the contrary, their Lordships had categorically identified the mixture as kiln gas known as such in the trade and in science and not as carbon dioxide. If the ratio of the aforesaid decision were to be correctly applied, it would go to support the contention to the effect that Rubber processing chemicals in tariff entry 65 is more of a generic description known, designated and recognised as such in technical literature as well as in trade and consequently its use or predominant use are altogether irrelevant for its classification in Item 65 of the First Schedule. 23. But then, however, in view of the full Bench decision, adverted to earlier, the Appeal has to be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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