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TMI Blog2009 (12) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... d varnishes (including enamels and lacquers) based on synthetic polymers or chemically modified natural polymers, or natural resins whether or not modified, dispensed or dissolved in a non aqueous medium, solution as defined in note 3 to this chapter". Two of such products manufactured by the Respondent are - "Type C Loid T-8" and "Type B Loid T-7". While the Respondent classified "Type B Loid T-7" under sub-heading SH 3208.90 as "other paints and varnishes", they classified "Type C Loid T-8" under SH 3208.40 as "Insulating varnish" and for this purpose, filed a classification list No. 154/91-92 dated 25-7-91 followed by other classification lists w.e.f. 1-3-92, 28-2-93, 1-3-94 and 16-3-95. The Department, however, sought classification o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; Rs. 1,03,415.00 (3) August 1992 to November 92 - Rs. 64,515.00 (4) December 1992 to March 95 - Rs. 6,33,418.00 Total Rs. 9,61,614.00 1.3 On appeal to CCE (Appeals), t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cification BS 4264 - 1987 Type B while in the certificate issued for Loid 1-8, the same is certified as "Synthetic primer Type 2 as per specification AWWAL - 203 - 86 which is meant only for primer and coal tar Enamel coating system, that insulating varnish should have minimum electrical strength of 5OKVG/MM at room temperature and minimum resistance to tracking of 50 drops and minimum resistivity of 1012 ohms, that there is no evidence that the product Type C Loid 1-8 has there characteristics, that a product having characteristics of varnish does not automatically become insulting varnish, that since the assessments were provisional, the duty demands are not time barred, that penalty has been rightly imposed and that in view of the above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner (Appeals) and that in view of the above, there is no merit in the Revenue's appeal. 3. We have carefully considered the submissions from both the sides and perused the records. 3.1 The Respondent manufacture two products - 'Type B Loid T-7' and 'Type C Loid 1-8' and the composition of these products as mentioned in para 4 of the order-in-original dated 22-6-99, based on the information given by the Respondent is as under - Type B Loid T-7 Type C Loid T-8 (1) Xylene 33 - 34% 40 - 42% (2) Trichloroethylene 33.5 - 38% 35 - 38% (3) Chlorinated rubber 31.5% - 32% 12- 14% (4) Carbon black 0.5 - 0.6% 0.5 - 0.6% (5) Paraffin Wax Nil 12 - 14% 'Type B Loid T-7' is classified under sub-heading 3208.90 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he chemical examiner's report in respect of 'Type C Loid T-8' as given in para 3 of the order-in-original dated 24-2-97 is as under - "The sample is in form of dark brown coloured free flowing liquid. It is compound of bituminous matter, binding agent and volatile organic solvent. It gives tack free transparent adherent coating. It has characteristics of varnish". The report is, thus, silent on the point as to whether the product has insulating properties. Since the product, in question, is not polymer based, or Acrylic or vinyl polymer based or cellular nitrate based, and there is no such claim by either side, the competing sub-headings would be 3208.40 and 3208.90 and the product would fall under 3208.40 only if it is an insulating varn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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