1. This is an appeal against the order dated 26-3-1993 passed by the Collector of Customs (Appeals), Cochin. Briefly stated the facts of the case are that the respondent filed a Bill of Entry for the clearance of an imported consignment of Rubber Reclaiming Agent, JACET-350.
Initially the product was classified under Heading 3403.19 of the Customs Tariff as a 'Lubricating Preparation'. Later, the Department issued a demand of differential duty of Rs. 35,208/- on the grounds that the item was classifiable under Heading 3812.30. The demand was confirmed by the Assistant Collector after ordering re-classification of the item under Heading 3812.20. On appeal, the Collector (Appeals) vide Order-in-Appeal No. 240/91-Cus., dated 21-6-1991 set aside the order of the Assistant Collector on the grounds that the classification up he d by the Assistant Collector was different from the one proposed in the show cause notice. On the direction of the Collector (Appeals) the matter was reopened after issuing a revised notice to the respondent and a fresh order was issued by the Assistant Collector confirming the demand on the grounds that the disputed product was classifiable under Heading 3812.20 of the Customs Tariff. Being aggrieved by the order passed by the Assistant Collector, the respondent preferred an appeal before the Collector (Appeals) who vide his impugned order allowed the appeal holding that the product in question was correctly classifiable under Heading 38.03 of the Customs Tariff since as c aimed by the manufacturers it was meant to be used in the process of reclamation of rubber through devulcanisation of scrap rubber.
2. On behalf of the Revenue, Shri Mewa Singh, SDR submitted that according to the manufacturers literature filed by the respondent the goods in question were pure aromatic de-sulphide oil. He added that according to the book "Rubber Technology and Manufacture" by C.H. Blow the main ingredient in "Pepton 22" marketed by M/s. Anchor Chemicals is also desulphide and is known as "Peptiser". He stated that commercially available peptisers contain chemically active petroleum sulphonate compounds and accordingly the disputed product namely, "Rubber Reclaiming Agents JACET 350" comprising of pure aromatic disulphide oil containing chemically active petroleum sulphonate compound could be considered as Plasticiser'. He contended that under these circumstances the product in question was correctly classifiable under Heading 3812.20 and pleaded that the impugned order may be set aside.
3. On behalf of the respondent, Shri A.S. Sunder Rajan, Advocate submitted that there was no infirmity in the finding of the Collector (Appeals) since, the product in question was only meant for use in rubber reclaiming process which involved reclaiming of rubber from rubber scrap. In this regard he referred to the manufacturers literature, at page 29 of the case records, according to which Rubber Reclaiming Agent JACET-350 when mixed with old rubber scrap results in a considerable reduction of energy consumption and uniform mutual penetration of their ingredients that makes up the batch of scraps to be reclaimed. He added that the Chemical Examiner's opinion given to the respondents vide Dept.'s letter dated 2-9-1992 confirmed the fact that the product in question was only a rubber reclaiming agent and was correctly classifiable as a lubricating agent for rubber processing.
4. We have examined the records of the case and considered the submissions made on behalf of both sides. It is seen that as observed by the Collector (Appeals) initially the item was classified under sub-heading 3403.19 on the basis of the Chemical Examiner's report and the declaration in the Bill of Entry. According to the report given by the Chemical Examiner the product consisted of mineral oil along with complex organic compounds. The mineral oil content was between 35% to 70%. The Department therefore held that on account of lubricating oil content the item had a devulcanising effect and accordingly it could act as a softener when used with rubber scrap. On these grounds it was treated as a 'Plasticiser' classifiable under Heading 3812.20.
5. From the manufacturers' literature it is evident that the product in question viz. "Rubber Reclaiming Agent JACET-350" is primarily used in rubber reclaiming process from old mixed rubber scrap and its use in such process results in a considerable reduction of energy consumption and uniform mutual penetration of oil ingredient to make up the batch of scrap to be reclaimed. According to the manufacturers this process is of the basic importance in reclamation of rubber since flawed and/or unequal distribution of various ingredients results in a serious lack of uniformity of the quality of the reclaim rubber whereby the basic technical characteristic such as tensile strength of the reclaim will show huge variations as to make it unfit for industrial use. The product in question was evidently not treatable as 'Plasticiser' since, according to the literature available at page 30 of the case records 'Plasticisers' are essential materials added to rubber compounds primarily to aid the processing operations of mixing, calendering, extruding and moulding. As pointed out by the Collector (Appeals) Heading 39.12 also indicates that plasticisers are used to provide a desired degree of flexibility to plastic or to increase the plasticity of rubber mix. In other words, plasticisers are used to increase the plasticity of rubber mix before the rubber mix is made into various products. According to the note under Heading 40.03 of the HSN reclaimed rubber is obtained by softening (de-vulcanising) the rubber and removing certain unwanted materials by various chemical or mechnical means.
6. In view of the above discussion, it is evident that the disputed product being meant for use as de-vulcanising agent in the process of reclamation of rubber from old mixed rubber scrap is different from 'Plasticisers' which are used for providing flexibility or plasticity to rubber mix before it is con-: verted into various rubber products.
For these reasons we do not find any merit in the Revenue's contention that the product in question has to be deemed as 'Plasticisers' classifiable under sub-heading 3812.20.
7. In view of the foregoing, the finding in the impugned order that the disputed 'Rubber Reclaiming Agent, JACET-350' was classifiable under Heading 3403.19 of the Customs Tariff as a 'Lubricating Preparation' is confirmed. The appeal by the Revenue is accordingly rejected.