Only paid members can access this page.
M/s Arteco Coolants India Pvt. Ltd., Versus The Commissioner of Customs (Import) - 2012 (2) TMI 12 - AUTHORITY FOR ADVANCE RULINGS - Customs
Classification of super concentrate, a constituent of the antifreeze coolants – assessee submitting super concentrate will fall classification under heading 3824 90 90 – residuary entry – imported product cannot itself be used as anti-freeze coolant - addition of MEG and others is also necessary to reach the desired concentration - Held that:-Rule 2(a) of the General Rules for Interpretation cannot apply to these goods, since it refers to articles presented unassembled or disassembled. Rule 2(b) refers to mixtures and combinations of materials and substances. The rule further states that the classification of goods consisting of more than one material or substance shall be according to the principles of rule 3. To apply this rule, therefore, one has to first see whether the goods in question, prima facie, fall for classification under two or more headings. Therefore, on the basis of meaning of the word “preparations” and the inapplicability of rule 2(a), their classification under heading 3820 00 00 is ruled out. The goods are undeniably products of chemical industry. Consequently, their classification will have to be under the residuary entry of chapter 38 of the tariff i.e. Heading 3824 90 90 – Decided in favor of assessee.
.............. rol and as such has no anti-freeze properties. 25. The goods are undeniably products of chemical industry. We do not find any other specific headings of the tariff under which they could fall for classification. Consequently, their classification will have to be under the residuary entry of chapter 38 of the tariff i.e. heading 3824 90 90. As regards the argument of the AR that a perusal of the list of products mentioned in notes (A) and (B) of the HSN notes for heading 38.24 shows that the products mentioned therein are no way relatable to the goods in the present case, we observe that the said list is an inclusive and not an exhaustive list. It can therefore be only illustrative. 26. We accordingly rule that the super concentrates named CSC-GEN, CSC-QFB and CIP-FG shall be classified as products of the chemical industry under heading 3824 90 90 of the First Schedule to the Customs Tariff Act, 1975 and be assessed accordingly. Pronounced on this the day 27th January, 2012. .
Mr. Justice P.K.Balasubramanyan, Mr. Y.G.Parande, JJ. Present for the applicant Sh. Ravikumar Yanamandra, CA Present for the Commissioner Sh. S.N.Singh, Commissioner, (AR) Sh. K.K. Jaiswal, Addl. Commissioner (AR) Ruling (By Y.G. Parande) This is an application filed by M/s Arteco Coolants India Pvt. Ltd., Suite No. 41, Vatika Business Centre, Level 5, Tech Park 1, Airport Road, Yerwada, Pune (the applicant) under S. 28H of the Customs Act, 1962. 2. The applicant is a wholly owned subsidiary of M/s Arteco NV, Belgium and proposes to undertake the manufacture of antifreeze coolants in India. For this purpose, they propose to import super concentrate, a constituent of the antifreeze coolants to be manufactured by them. Ruling has been sought on the classification of the super concentrate to be imported by them. 3. It has been stated in the application that Arteco NV, Belgium develops and manufactures anti-freeze coolants and heat transfer fluids for automotive and industrial applications. It proposes to manufacture and sell antifreeze coolants in India through its subsidiary company i.e. the applicant. 4. The process of manufacture of the antifreeze coolants, as set out in the application, involves the blending of the base fluid, demineralized water and the super concentrates in the required proportions. The base fluid is mono ethylene glycol (MEG), which transfers the heat from internal combustion engine to the radiator where the fluid is cooled by airflow. Thus the heat transfer property of the antifreeze coolant it determined by the base fluid. It increases the boiling point of the solution. Super concentrate is a highly concentrated mixture of inorganic and organic chemicals and contributes to corrosion resistance. The corrosion protection property of any antifreeze coolant is determined by the type and level of corrosion inhibition additives in the antifreeze coolant. Super concentrate has physico-chemical properties like anti-foaming and oxidation stability. While it does not directly contribute to heat transfer, it helps the base fluid (MEG) in heat transfer by its corrosion protection. The quantity of demineralized water depends upon the required freezing or corrosion protection. 5. While super concentrates are proposed to be imported from abroad, the other constituents are proposed to be procured locally. It is these imported super concentrates in respect of which a ruling has been sought. Super concentrate 6. The applicant has stated that they propose to import three types of super concentrate, namely CSC-GEN/ CSC-GEN-NM CSC-QFB CIP-FG The composition of these as stated in the application is as follows CSC-GEN, CSC-GEN-NM CSC-QFB CIP-FG Mono ethylene glycol Monoethylene glycol 2-Ethyl hexanoic acid, Sodium salt 2-Ethyl hexanoic acid, sodium salt Glycerol Sebacic acid, sodium salt Sebacic acid, sodium salt 2-Ethyl hexanoic acid, sodium salt Water Water, Tolyltriazole Sebacic acid, sodium salt Tolytriazole Water, Tolyltriazole Sodium metasilicate pentahydrate Each type of super concentrate meets different technical and customer requirements. The applicant also furnished the product data sheets detailing the technical description of the super concentrates. Applicant further states that the super concentrate adds corrosion protection properties to the engine coolant and in order to achieve the intended result of antifreeze preparation, the super concentrate has to be blended with monoethylene glycol and demineralized water that are locally procured. The blending results in increase in the concentration of MEG and dilution in the amount of super concentrate in the final product i.e. anti-freeze coolant. 7. As regards the classification the applicant feels that the super concentrate will fall classification under heading 3824 90 90 for the following reasons 1. The super concentrate is a mixture of organic or inorganic chemical additives, the composition of which is not chemically defined. 2. It is not a product which is either occurring in nature or processed by the application of physical processes but is produced by a process of chemical transformation, resulting in a chemical compound used as corrosion inhibitor in the final product i.e. antifreeze coolant. The goods are not separately defined elements or chemical compounds the composition of which is defined. Therefore classification under Chapters 28 or 29 of the Schedule to the Custom Tariff Act is ruled out. 3. For the same reasons the appropriate classification would appear to be under Chapter 38 of the said schedule. 4. Under the Chapter 38 the two possible headings for classification are either heading 3820 00 00, which covers anti-freezing preparations and prepared de-icing fluids or heading 3824 90 90 which covers, inter alia, products and preparations of the chemical or allied industries not elsewhere specified or included. 5. A perusal of headings 3801 to 3823 shows that they cover chemical preparations which are classifiable by reference to their properties or the fields of industry where they are used. The only entry that covers mixtures of chemicals not elsewhere specified or included is 3824.90.90 ndash Others. 6. As far as the possible classification under heading 38.20 is concerned. The relevant HSN note under Chapter 38 states, This heading covers anti-freezing preparations and prepared de-icing fluids (e.g. mixture with a basis of glycol derivatives). Some anti-freezing preparations also act as coolants or as heat-exchange agents. The heading excludes prepared additives for mineral oils or for other liquids used for the same purposes as minerals oils (Chapter heading 38.11) . From this it would appear that for an item to be classified under heading 38.20 it must be capable of being used as an anti freezing coolant directly in the form in which it is imported. 7. There exists a difference between the raw material (super concentrate) and the final chemical mixture (anti-freeze coolant). The super concen.................