Judgment:
1. Being aggrieved with the order of the Collector of Central Excise (Appeals) Bombay, allowing the respondent's appeal the Revenue has filed this appeal. Respondents vide their letter dated 79-5-1996 has sought disposed of the department's appeal on merits. Accordingly we heard the learned SDR Shri A.K. Madan for the appellant Collector.
2. The issue involved in the said appeal is the classification of 'polystyrene co-polymer Beads' manufactured by the respondent. The manufacturer has claimed the classification of the said product as under sub-heading 3903.10 read with exemption Notification No.133/86-C.E., dated 1-3-1986 whereas the Revenue's contention is that the goods are correctly classifiable under the residuary sub-heading 3903.90 and eligible for concessional rate of duty in terms of Notification No. 132/86-C.E., dated 1-3-1986. On the above basis, the respondent was served with a show cause notice dated 14-12-1987 raising a demand of duty of Rs. 1,00,126.60 for the period September 1987 to November 1987. The said show cause notice culminated into order passed by the Assistant Collector holding the product falling under sub-heading 3903.90 and also confirming demand of duty on appeal against the above order. Collector (Appeals) set aside the order of the Assistant Collector and held that the polystyrene co-polymer beads were classifiable under sub-heading 3903.10 in view of Chapter note 4 of Chapter 39. It is this order, which is impugned before us by the Revenue.
3. We have heard the learned SDR Shri A.K. Madan. Shri Madan drew our attention to Chapter note 4 of Chapter 39 and contended that the said chapter note is relevant for the purposes of arriving at the correct heading on pre-dominance basis and not for deciding the sub-heading within the heading. He submitted that there is no dispute that the blend of monomers namely styrene and DVB in which styrene predominates by weight would be covered under Heading 39.03. It was his submission that such blended product cannot be classified under sub-heading 3903.10, which is a specific and exclusive sub-heading for polystyrene.
According to him, sub-heading 3903.10 covers only poly condensation of styrene, while sub-heading 3903.20 and 3903.30 covers specific comonomers i.e. copolymers and terpolymers. Shri A.K. Madan emphasised that polystyrene polymer is entirely different than copolymers having predominance of styrene monomers. In view of his above said submissions, he prayed for setting aside of the impugned order.
4. We have given our careful consideration to the submissions made by the learned SDR and the reasoning adopted by the Collector (Appeals).
For the proper appreciation of the rival contentions Heading 39.03 is reproduced below: 3903.10 Polystyrene 60% 3903.20 Styrene Acrylonitrile-acrylonitrile (SAN) 60% COPOLYMERS 3903.30 Acrylonitrile-butadiene-styrene (ABS) terpolymers. 60% 39.90 Other.
60%" "For the purposes of this Chapter, except where the context otherwise required, copolymers (including co-polycondensates, co-polyaddition products, block copolymers and graft copolymers) and polymer blends are to be classified in the heading covering polymers of that comonomer which predominates by weight over every other single comonomer, comonomers whose polymers fall in the same heading being regarded as constituting a single comonomer.
If no single comonomer predominates, copolymers or polymer blends, as the case may be, are to be classified in the heading which occurs last in the numerical order among those which equally merit consideration.
The expression "copolymers" covers all polymers in which no single monomer contributes 90 percent or more by weight to the total polymer content." "I have carefully gone through the appeal petition and the impugned order and considered the written submissions. In his impugned order the Assistant Collector has admitted that as per chapter Note 4 of the co-polymer will be classified with the comonomer which predominates over others. In the instant product styrene Monomer predominates by weight over other comonomer. The chapter Note 4 further prescribes that such blending has to be regarded as constituting a single comonomer. That is in the instant case poly-styrene and such copolymer has to be considered for classification as polymer of single comonomer. Polymers of styrene in primary forms are classified under heading 30.03 and polystyrene is classified, under sub-heading 3903.10. In the instant case styrene predominates by weight over other comonomer i.e. DVB and as such the product is correctly classifiable under chapter sub-heading 3903.10. Heading 3903.90 covers all other polymers which are not covered under sub-heading 3903.10 to 3903.20. It is a residuary heading, and therefore also the product cannot be classified under Heading 3903.90." 5. On going through the impugned order and the order passed by the original authority we find that there is an acceptance on part of the Assistant Collector that co-polymer will be classified with the comonomer which predominates over others. The appellate authority has gone by the factual position that in the product in question styrene monomer predominates by weight over other comonomers. We also find that as per the chapter Note 4 comonomers whose polymers fall in the same heading being regarded as constituting a single comonomer. Department has not produced any technical data on record to rebutt the above factual position or to throw any light on the chemical composition of the product in question. We also take note of the fact that sub-heading 3903.90 is residuary in character and has to be taken aid of only in those cases where the product is not classifiable under any of the preceding sub-headings. Accordingly, in the facts and circumstances of the case we hold that the 'polystyrene copolymers beads' are classifiable as polystyrene under sub-heading 3903.10. The impugned order is upheld and the appeal of the department is rejected.