1. The question for consideration in this appeal is the classification of the cement capsules that the appellant manufactured. In the order impugned in the appeal, the Commissioner has classified the product in sub-heading 2502.90 of the tariff. It is the appellant's contention that the goods should be classified in sub-heading 29 of the same.
- Portland cement (including ordinary Portland Cement, Portland Pozzolana Cement and Portland Slag Cement): - - White cement; whether or not artificially coloured and whether or not with rapid hardening properties.
3. The question therefore is really whether the product is Portland cement other than white cement whether or not artificially coloured and whether or not with rapid hardening property and falls in residuary heading.
4. It is a composition of the product stated to be as follows. In the affidavit, which has been filed by Vipul Gupta, director of the appellant, that the ordinary Portland cement 70%, high alumina cement 15%, non-ferric alum 5%, gypsum 5%, other chemicals (sodium lignosulphonate, Tamol) 5%. The affidavit explains that the manufacturing process involved is mixing and grinding of the raw materials. The product is packed in plastic capsules and supplied only to mines. This capsule is put into use for grouting the bolts fixed on to the roofs of the underground mines, which is used to anchor chains and other such load bearing cables. It is stated that the substance is so used, it sets quickly, generating anchorage of 8 to 10 tons in 90 minutes. It is stated that the plastic capsules in which the cement is packed disintegrates homogenous with the mixtures and it is used essentially into the mixture. This reason that the Commissioner advances for some of the notices which proposed classification of the commodity as grouting powder in heading 38.24. The commissioner however, in his order, concludes that it is correctly classifiable as cement in the sub-heading that we have mentioned for the following reasons. "It is made from Portland cement although it has some characteristics common to rapid hardening cement which differs from it with respect to high acid insolubles, high sulphuric anhydride content.
It gives a high early strength. "Hence going by the use and character of the product, it has to be decided that it is not ordinary Portland cement but it has rapid hardening chloride free cement and is a thixotropic substance appropriately classifiable in heading 2502.90 of the Central Excise Tariff Act." 5. We may at this point note that the presence or absence of the thixotropic substance in the product does not have relevance for the classification. It is in fact not clear whether it is thixotropic or not. The contract between the parties require that the product should be thixotropic and the affidavit of Vipul Gupta says that it has no thixotropic properties. We also do not see the relevance of this attribute. Thixotropy is explained in McGraw-Hill Dictionary of Scientific and Technical Terms (third edition), as follows:- Thixotropy: [PHYS CHEM.] Property of certain gels which liquefy when subjected to vibratory forces, such as ultrasonic waves or even simple shaking, and when solidify again when left standing.
6. The heading in the tariff was altered in the Budget of February, 1992. Prior to that sub-heading 20 read as follows:- "20 - Grey Portland cement (including ordinary Portland cement, Portland-pozzolana cement and Portland slag cement), masonry cement, rapid hardening cement, low-heat cement and water proof (hydrophobic) cement" 7. By the budget, the sub-headings was replaced by the following changes that were made. Sub-heading 20 was removed, sub-headings 21 & 29 were for Portland cement. Sub-heading 21 and 29 are as follows:- "21 - White cement; whether or not artificially coloured and whether or not with rapid hardening properties.
-Portland cement (including ordinary Portland Cement, Portland Pozzolana Cement and Portland Slag Cement): -White cement; whether or not artificially coloured and whether or not with rapid hardening properties.
These entries were again amended. Apart from these, the other entries remain the same. The circular issued by the Board on 8.3.1996 clarified the position as to these changes, paragraph 4 of which is reproduced below:- "4. The matter has since been carefully examined by the Board. The Board has taken note of the fact that prior to the Finance Bill 1992, Portland Slag Cement was classified under Heading 2502.20 which covered Grey Portland Cement which included Ordinary Portland Cement, Portland Pozzolana Cement, Portland Slag Cement etc. with effect from 1-3-1992, the Tariff structure relating to heading 25.20 was amended and a generic entry in the name of Portland Cement was introduced without expressly mentioning that this included Portland Cement, Portland Pozzolana Cement and Portland Slag Cement etc. as was the case prior to 1-3-1992. It appears that the generic name Portland Cement included all the categories of cement which were mentioned in heading 2502.20, before 1-3-1992. It has two sub-classifications i.e. white cement under sub-heading 2502.21 and all other types of Portland Cement under sub-heading 2502.29. All varieties of Portland Cement (including Pozzolana and Slag Cement) other than white cement should fall under 2502.29. The Tariff changes effected w.e.f. 1-3-1994 have also covered these categories of Cement under 2502.29. On the other hand Heading 2502.90 covers other types of cements not mentioned in the Heading 2502.21 to 2502.50 i.e. cements other than Portland Cement, Aluminous Cement, High alumina refractory cement etc." 9. The contention of the counsel for the appellant is that it is clear from the circular that the intention was to include this sub-heading 29 all other types of Portland cement other than white cement, after the amendment in 1994. Therefore, he says that the commodity is falling in heading 29. He further contends that the cement is primarily a Portland cement having rapid hardening properties. Addition of some chemicals to it doe snot change its character.
10. The departmental representative contends that the cement in question is not manufactured in accordance with the specifications of the Indian Standard Institution contained in its IS:8041:1990 for rapid hardening cement. The addition of high alumina cement and other additives which are not permissible for Portland cement which can be considered as Portland cement. He emphasises what the Commissioner says that the cement has characteristics of rapid hardening having surface expansion and chloride free. These are not characteristics of Portland cement. The reference in the case to the Explanatory Notes to the Harmonised System (HSN) of Nomenclature is excluded since the sub-headings in the tariff differ substantially from those in the HSN.11. Both sides are agreed that neither of the books cited refers to a product of the kind that we are concerned with, or one closely approximating it. The product consists predominantly of grey Portland cement to which have been added some quantity of high alumina cement and small quantity of alum and two other chemicals. The high alumina cement which seems to consist of calcium aluminus cement, is explained in the Encyclopaedia Chemical General (Both edition vol.5 8595). The same is expressed in McGraw Hill Dictionary of Technical & Scientific terms. No doubt, it imparts with some properties of early strength.
Alum again is explained in additional cement. The term "alum" refers, according to the Condensed Chemical Dictionary by Hawlley, to aluminium ammonium sulphate, aluminium potassium sulphate and aluminium sulphate.
The dictionary indicates as one of the uses of the aluminium potassium sulphate as cement hardening. Kirk & Othmer, in its entry for aluminium sulphate, indicates the use for cement hardening accelerate. The affidavit filed by the appellant indicates the use of non-ferric alum, although it does not specify precisely what. The presence of this high alumina cement, it appears to us, is to impart some quality of rapid hardening.
12. Encyclopaedia of Chemical Technology (fourth edition vol.5) by Kirk & Othmer indicates the lignosulphonate materials are used as water reducing agents, superplasticiser so as to improve dispersion of cement in the mixing. Tamol is a proprietary formulation which is explained in the Condensed Chemical Dictionary by Hawley's to be an anionic polymer type dispensing agent.
13. We do not see how the presence of these items results in a product that is completely different from Portland cement. As we have noted from the earlier tariff headings, rapid hardening cement would be classifiable in sub-heading 29. We do not see how the presence of some quantity of high aluminium cement and the other additives makes the difference. The fact that the manufacturing process does not conform to the Indian Standard Specification may show that the product does not conform to those specifications. It does not lead to the conclusion that it is not rapid hardening cement. The attribute of dispersion and the slight addition to high early strength caused by the addition of high alumina cement do not, in our opinion, take the product away from being considered to be rapid hardening cement. We are not able to find anything in the technical literature which shows the relevance of the absence of chloride free and being surface expansive. In fact such literature does not refer to such attributes at all. The Commissioner also does not indicate from where he has got the conclusion with regard to these goods. These additions do not result in the product being excluded from the classification as rapid hardening cement in sub-heading 29, justifying its classification in sub-heading 90. The more appropriate classification is sub-heading 29. Counsel for the appellant also points out that the product has been classified in sub-heading 29 by orders of the other Commissioners, which are not questioned by revenue. This reinforces the appellant's claim.
14. Sub-heading in the heading 25.02 of the tariff do not correspond with the sub-heading in the HSN. There is a significant variation. In that situation, it would be proper to rely upon the Explanatory Notes of the HSN.15. We also do not see how the technical opinion dated 18.8.2000 furnished by the Director of the Central Revenue Laboratories that the departmental representative relies upon, supports his case. This report, after indicating the position of the cement, as claimed by the manufacturer, goes on to compare the "compositions of similar products submitted by different manufacturer." It thereafter concludes that the goods are used in the underground mines with fixing of bolts and says, "such cement with aggregates, like silica (micronised or otherwise) is a preparation from Portland cement, though it has certain chemical requirement common to the rapid hardening Portland cement, but differs from it with respect to high acid insolubles (aggregates) and high SO3 content as shown in annexure 3." It indicates that, according to technical literature, high SO3 (sulphuric anhydride) contents high early strength cement. He concludes, "thus the product has some different properties from rapid hardening Portland cement as per IS 8041:1990." 16. We do not find it possible to agree with what the director says that the product is distinct from Portland cement, when he calls it a preparation of Portland cement.
17. The question thus, essentially, is whether the addition of the high alumina cement, the alum and the other chemicals results in their emerging the substance is so that Portland cement has to merit classification in the residuary entry. The addition of fifth of high alumina cement will, in our opinion, contribute to the strength of the ordinary cement and will not result in the entire mixture being considered as cement of a kind that is different from varieties of cement that would be covered (in terms of the Board's circular) in sub-heading 29. The same would apply to the addition of alum and other chemicals which have dispersal agents.
18. The classification claimed by the appellant, therefore, has to be accepted.