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TMI Blog2007 (3) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... product under Tariff Item No. 68, this time relying on Tariff Advice No. 7/81 dated 7-1-1981 issued by CBEC. This claim as raised before the appellate Collector was disposed of in Order-in- Appeal No. 483/81 ibid as follows :- "As to the contention that the product has to be classified as per the Tariff Advice No. 7/81 dated 7-1-81, I have to state that in the absence of details as to the resinuous characteristic or not of the product in the test report of Chemical Examiner, I cannot decide the issue. The appellants are asked to approach the lower authority and seek remedy as per the Tariff Advice". 2. The present proceedings originated from the aforementioned part of the appellate Collector's Order No. 483/81 dated 16-6-81. The appellants took up the matter with the Assistant Collector and the latter issued a show cause notice dated 9-7-81 proposing continuance of classification of the product under Tariff Item No. 15A(1)(i) de hors Tariff Advice No. 7/81 dated 7-1-81 ibid. The notice alleged that, as per the Chemical Examiner's report already communicated to the noticee, friction dust was a phenolic resin with resinuous properties classifiable under the above tariff item and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Collector, who collected remnant samples from the Chemical Examiner, Madras and sent the same to CRCL, New Delhi for retest. The Chief Chemist, CRCL, upon retest of the samples, opined that the product in question be considered as a plastic material (phenol formaldehyde) classifiable under Tariff Item No. 15A(1)(i) as 'phenoplast'. Considering the Chief Chemist's findings, the Collector upheld the decision of the lower authority. Against the Collector's decision, the party approached this Tribunal, which remanded the case to the Collector for fresh decision after supplying a copy of the Chief Chemist's report to the party and giving them an opportunity of being heard vide Order No. 568/1987-C dated 29-7-1987 of the Special Bench 'C' of the Tribunal. Pursuant to the remand, the Commissioner of Central Excise, Chennai-II passed Order-in-Original No. 9/2005 dated 30-5-2005 confirming classification of 'friction dust' manufactured by the appellants since 7-1-1981, under Tariff Item No. 15A(1)(i). Hence the present appeal. 3. Tariff Item No. 15A(1)(i) is reproduced below: Item No. Tariff Description 15A Artificial or synthetic resins and plastic materials and cellulose est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... temperatures that it is used in brake linings and clutch facings. After considering the Chemical Examiner's first report dated 24-5-77 (which reported that the sample was composed of phenolic substance, carbon black and nitrogenous compound and that it possessed resinuous property) and his second report (which reported that the sample was a cured resin) and after consulting technical literature on resins and plastics, the Assistant Collector, in the proceedings relating to the period prior 7- 1-81, found that friction dust was a phenolic resin manufactured by the process of condensation and was therefore classifiable under Tariff Item No. 15A(1)(i). The Assistant Collector's decision was affirmed by the appellate Collector and reaffirmed by the Govt. of India and that decision was accepted by the assessee after their writ petition against the Govt.'s order was dismissed by the Delhi High Court. 5. We have heard both sides and considered their submissions. The assessee's case as made out by their Consultant is that friction dust has no resinous property and therefore the question of classifying it under Tariff Item No. 15A(1)(i) did not arise on account of CBEC's Tariff Advice No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lymerization products and ion exchange resins resulting from further treatment of such products. In the present case, as we have already noted, it is a settled fact that friction dust is manufactured by the process of polycondensation involving phenolic compounds [contained in CNS liquid] and formaldehyde [provided by Hexamine] as monomers and sulphuric acid as catalyst. Chemical literature shows that, in polycondensation, different monomers (small organic molecules) react to form a polymer (large organic molecule) with elimination of simple inorganic molecules like H2O(water). In the present case, molecules of phenolic compounds (monomers) and formaldehyde (monomer) combine to form the polymer called 'phenol-formaldehyde' with the elimination of H2O molecules. This process is polycondensation and not copolymerization. According to chemical literature, copolymerisation is an addition reaction (as contradistinguished from a condensation reaction) in which molecules of two or more different monomers combine to form a polymer. There is no formation of H2O or other inorganic molecules while this addition takes place between organic monomers to form the organic polymer. Therefore, we ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve Tariff Advice was never withdrawn and therefore would be applicable to classification of 'friction dust' for the period from 7-1-1981. Learned Consultant argued that the above Tariff Advice was impliedly superseded by Tariff Advice No. 7/81 dated 7-1-81. But we have already held that the second Tariff Advice is not applicable to friction dust based on condensation polymer. Therefore, there is no question of the first Tariff Advice being superseded by the second. Tariff Advice No. 21/81 ibid is specific for friction dust manufactured from CNS liquid in the manner it was manufactured by the appellants during the period of dispute. The appellants have no case that the said Tariff Advice was withdrawn or that it was superseded by any subsequent commodity-specific Tariff Advice. Therefore, we have to hold that Tariff Advice No. 21/80 dated 6-5-80 continued to govern classification of the subject goods for the entire period of currency of the old Central Excise Tariff. 7. Contentious arguments were also made with reference to the Chief Chemist's report also. The Chief Chemist's letter dated 3-5-1982 and the 'Note' attached thereto are reproduced hereunder "C. No. 22-Ex.O./82 &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; Sd /- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oval of external influences". The term plastic material according to literature is usually reserved for the end product of the process even though there may only be a plastic inter mediate stage. The phenolic resin constituent of the sample has undergone high degree of cross-linking (curing) and therefore, the common thermoplastic behaviour is not reflected. A cured product of this type composed of cured polymers and fillers in my opinion, may be considered as plastic material (phenol formaldehyde) classifiable as phenoplasts under item 15A(1) of CET as phenoplast. & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had undertaken to abide by it. Even if the Chief Chemist's recommendation for classification of the product under Tariff Item No. 15A(1)(i) is ignored, his finding that it may be considered as a plastic material (phenol- formaldehyde) classifiable as 'phenoplast' is liable to be accepted by the authorities to classify the item under Tariff Item No. 15A(1)(i). 9. The appellants have relied on the test certificates of CLRI, University of Bombay (Department of Chemical Technology) and University of Manchester (Department of Chemistry) in support of their case that friction dust has no resinous character. It is true that these agencies certified samples of the product to be infusible. Their report is in no way different from what was reported by the Chief Chemist inasmuch as the latter also found that, on account of a high degree of cross-linking (curing), thermoplastic behaviour was not reflected in the sample. The report of the Chief Chemist, if correctly understood, is to the effect that any plastic material developed from a phenolic resin is a 'phenoplast'. Tariff Item No. 15A covers 'artificial or synthetic resins and plastic material and ....' It no where specifies that the pla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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