The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench consisting of Ramesh Nair, Judicial Member, and Raju, Technical Member held that classification of Products only on the basis of Nomenclature under Customs Tariff Act is baseless.
The brief facts of the case are that the appellant, Astral Limited imported modifier for PVC “Kane Ace B-564” from Malaysia, and in the ex-bond Bill of entry, the appellant classified the said product under CTH 39029000 and claimed exemption as available against entry no. 457 (I) of Notification No.46/2011- CUS. It is the department’s case that the appellant has wrongly classified the item under 39029000 as it should have been classified under CTH 39069090 as any Acrylic Polymers.
The adjudicating authority by passing an adjudication order re-classified the goods under CTH 39069090. Consequently, the exemption claimed by the appellant was denied however, the benefit of concessional rate of duty was extended, in serial no. 466 and accordingly, differential duty, and liability was confirmed. Being aggrieved by the Order-In-Original, the appellant filed appeals before the Commissioner (Appeals) who upheld the classification of said product under 39069090 and consequential denial of exemption claimed by the appellant in terms of Sl.No.457 (I) of the Notification No.46/2011-Cus rejected the appeals. Therefore, the present appeal is filed by the appellant.
The Counsels for the appellant, Rajat Bose, and Neeladri C submitted that the product is an MBS-based polymer primarily consisting of butadiene as a major component. The products are not acrylic-based polymer and MMA-BD-ST-Acrylic Copolymer (Acrylic Modified MBS Polymer Co polymer in which none of the constituents is more than 95% by weight. He referred to the technical data sheet (TDS) Safety Data Sheet (SDS) providing the chemical composition of the products and certificate of chemical analysis which are next to the appeal. It is his submission that the product contained butadiene (which is an olefin) as a major component that predominates by weight in the composition.
In the present case, the predominant constituent is butadiene which is in the nature of olefin and covers under Tariff Heading 3902 under the entry „Polymer of other olefins in the primary form‟. Therefore, the product imported by the appellant is correctly classifiable under CTH 39029000 and not under 39059090 as claimed by the department.
CESTAT held that “The Adjudicating Authority and the Commissioner (Appeals) have not considered this statutory provision of central excise tariff act, they have also not considered the chemical characteristics of the product therefore, the classification decided only on the basis of nomenclature that too picking up words from the full nomenclature of the name of the product is absolutely baseless and cannot be sustained.”
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