Full Judgment
2. The question that arises for consideration is the correct classification of two imported products namely CHEMIGUM N-328-B and CHEMIGUM N-628-B for assessment under Chapter 40 of C.T.A as sought by appellant or Chapter 39 of C.T.A as sought by Revenue.
3. The Appellants imported the goods which have been declared in the relevant B/E Cash No. 2388 dated 24-6-1986 and Cash No. 1671 dated 20-10-1986 "Synthetic Rubber Chemigum N 328 B," in B/E Cash No. 2389 dated 24-6-1986 as "Synthetic Rubber-Chemigum N 628 B" and in B/E Cash No. 748 dated 5-6-1986 as "Synthetic Rubber Krynac-110". The Appellants claimed the re-assessment of the goods under Heading 4002.59 as against the original assessment under Heading 3911.90 of C.T.A 75.
4. The Appellants have submitted that these three products namely CHEMIGUM N-328 B; CHEMIGUM N-628 B & KRYNAC 110 are all branded products of M/s. Good Year International Corporation. The product Chemigum N-328 B is an Acrylonitrile Butadiene Rubber. Chemigum N-628 B is Acrylonitrile Butadiene Copolymer. The products are raw rubber and in their application they are in no way different from Synthetic (NBR) Rubber. They satisfy the definition and the guidelines prescribed in Note 4(a) to Chapter 40 of C.T.A 1975 in respect of elasticity, vulcanisation and reversibility. They are free from added ingredients and they are not synthetic resin and, therefore, will not fall within Chapter 39 C.T.A.5. In support of their contention, they have relied on the earlier clearance of Chemigum N-328 B assessed under heading 40.01/04. A copy of Test Report dated 31-12-1986 from the Indian Rubber Manufacturers Association, Thane and also the literature of supplier was also relied upon.
6. The Collector of Customs (Appeals) in his combined order in appeal had partially admitted the appellant's contention. He held that Kyrnac 110 was a synthetic Rubber & correctly assessable under 4002.59 C.T.A but rejected the appeal in so far as products Chemigum N 328 B & Chemigum N 628 B are concerned.
7. The Collector of Customs has rejected the appellant's contention that these products are synthetic Rubbers classifiable under Chapter 40 as they could not be treated as synthetic rubber classifiable under that chapter.
8. Shri D.B. Shroff, Advocate for appellant submitted that the data sheet of product Chemigum N 328 B showed that it is acrylonitrile Butadiene Co-polymer (Nitrile Rubber). He submitted that the Collector had misread note No. 4 (a) of Chapter 40 and had wrongly read the data sheet to mean that those ingredients shown in the data sheets were present in the product. He submitted that the products are raw synthetic rubber satisfying the definition and guidelines prescribed in Note 4(a) to Chapter 40 of the C.T. Act 1975 in respect of elasticity, vulcanisation and reversibility and it is in no way different from other synthetic rubbers and can be vulcanised and is specifically suitable for its use at cross linking stage with rubber compound. He relied upon the Reports and Certificates of the Indian Rubber Manufacturers Research Association regarding its physical properties.
He also relied upon the certificate dated 7-4-1988 issued by supplier Good Year International Corporation stating that the Chemigum N 628 B and Chemigum N 328B are not master batches but synthetic Acrylonitrile Butadiene rubbers. It further states that these polymers do not have added ingredients other than those absolutely essential, stabilizers and other additions needed for the manufacture of the rubber itself and preparation of polymer before the utilization by their customers. The literature of the supplier was also relied upon by him to show that Chemigum N 328 B nitrile rubber contained high acrylonitrile content.
He submitted that Acrylonitrile Butadiene Rubber (NBR) was a specific entry under 4002.59 C.T.A and that note 2(g) of Chapter 39 excluded synthetic rubber as defined for the purpose of Chapter 40. The original assessment was under 3911.90 of C.T.A 1975. Item 39.11 covers Petroleum Resins, Coumarone-Indene Resins, Polyterpenes, Polysulphides, Polysulphones and other products specified in Note 3 of Chapter 39.
3911.10 covers Petroleum Resins, Coumarone Indene resins & Polyterpenes and 3911.90 others. He submitted that note 3 of Chapter 39 read "Heading Nos. 39.01 to 39.11 apply only to goods of a kind produced by chemical synthesis", falling in the categories (a) to (e) as noted therein. The Assistant Collector of Customs had clearly erred in observing that "Acrylonitrile Butadiene Rubber NBR is specifically mentioned under Chapter 39 C.T.A.9. Shri S. Chakraborti, learned JDR supporting the assessment of the impugned products made by Department under Chapter 39, disputed the evidence produced by the appellant and submitted that the test results of Indian Rubber Manufacturers Research Association cannot be relied on as no mention has been made regarding the testing of the impugned goods and the dates of certificates were also after the date of import and therefore it had no evidential value. It could not be further gathered from the literature whether the ingredients had not been used as pigments, plasticisers, extenders and fillers, reinforcing agents and organic solvents. Therefore the Collector (Appeals) was right in assessing the product under Chapter 39 basing on the Harmonised Commodity and Coding System.
10. We have heard both sides and carefully considered the submissions made by them and also examined the materials placed before us. The product is described in the bills of entry and invoices in respect of both the products as Synthetic (Nitrile) Rubber. The Certificate dated 31-12-1986 issued by the Indian Rubber Manufacturers Research Association (affiliated to the Ministry of Industry, Government of India) states that Rubber Sample marked as "CHEMIGUM N 328 B" received from M/S Inarco Ltd. is a Nitrile Rubber which is a Synthetic Raw Rubber and satisfies the definition and guidelines prescribed in Note 4(a) to Chapter 40 of C.T.A 1975 in respect of Vulcanisation, Reversibility and Elasticity and is free from added ingredients. The letter dated 31-12-1986 issued by them gives the compounding formulation "Chemigum N 328 B : 100 Zinc oxide : 5.0; Stearic acid : 1.0, Sulphur : 1.5, CBS 1.5 compound was cured at 150c for 25 minutes.
Physical Properties (i) Recovery (%) 98 passes the test(ii) Elongation at break (%) 650 passes the test(iii) Polymer Identification Acrylonitrile-butadiene rubber(iv) Ash Content (% by weight) 0.5" In respect of Chemigum N 628 B the certificate is dated 14-4-1988, while the import is of the period June, 1986 and Oct., 1986. However, it states that Chemigum N 628 B satisfies the definition and guidelines prescribed in Note 4(a) to Chapter 40 C.T.A 75 in respect of Vulcanisation, Reversibility and Elasticity and it is free from added ingredients. The report is also furnished by them in respect of this product as: "Compounding formulation:(iii) Ash content % ...
0.45(iv) Polymer type ...
"Acrylonitrile Butadiene Rubber".
The Technical literature in respect of Chemigum of the Supplier M/S Good Year Chemicals states that "Chemigum N 328 B is a high acrylonitrile, 80 mooney polymer with excellent mixing, extruding and calendering properties. It is a fast curing rubber with a high degree of scorch resistance etc.". The table to the literature shows the properties of Chemigum N 328 B Rubber as "Acrylonitrile content high.Sp. gravity : 1.00Mooney Viscosity ML-4' @ 212 F 70-80Solubility in MEK, % : 98.0 minAsh content % : 1.0 maxStabilizer : Non-stainingColor : Light TanOdour : Mild pleasantStorage stability : Excellent" The details regarding Chemigum N 628 B is given as "Chemigum N 628 B is a cold polymerized, non-staining, butadiene acrylonitrile copolymer of medium acrylonitrile content".
11. The other details pertaining to polymer properties and vulcanizate proper-tics are also shown in the literature.
12. The Department had not sent the samples for chemical test. The Assistant Collector had passed the order only after the appellants had filed on 16-12-1986 application for reassessment and refund of duty.
The Assistant Collector in the order in original does not dispute the product as Acrylonitrile Butadiene Rubber but has only stated that the items as per Harmonised Commodity and Coding System are classifiable under Chapler 39 and hence he rejected the application as untenable.
13. Chapler 39 covers plastics and articles thereof. Note 2 (g) to Chapter 39 excludes Synthetic rubber as defined for the purposes of Chapter 40, Or articles thereof.
14. Admittedly, the imported articles are Acrylonitrile Butadiene Rubber. This has a specific entry in Chapter 40. Chapter 40.02 reads as "Synthetic Rubber, and factice derived from Oils, in primary forms or in plates, sheets or strip; mixtures of any product of Heading No.40.01 with any product of this heading, in primary forms or in plates, sheets or strip. One of the sub-classifications under this heading is "Acrylonitrile Butadiene Rubber (NBR). Under this there are two sub-headings :- As has been noted by us Acrylonitrile butadiene rubber (NBR) is a synthetic rubber.
This fact is not disputed. The evidence produced by the appellant is not controverted by the Department. The imported product is a branded item supplied by M/s. Good Year International Corporation. The literature gives details of the product being a synthetic rubber which fact is corroborated by the certificates issued by the Indian Rubber Manufacturers Research Association after carrying out sample test of the product. The Tariff Heading 39.03 reads as polymers of styrene, in primary forms. The supplier's literature and documents disclose clearly that the product is Synthetic Rubber having brand name Chemigum (Synthetic Rubber Crude nitrile) as described in bill of entry. Hence it is classifiable under Heading 4002.59. The appellants are therefore entitled to succeed in this appeal and the same is allowed with consequential relief.
I agree that in the state of the evidence on record, the goods are more appropriately classifiable as Synthetic Rubber under Heading No.4002.59. In the result, I also agree that the appeal be allowed with consequential relief to the Appellants.