Copolymers classified by predominant comonomer weight under Chapter Note 4; sub-heading notes cannot change the heading.

Copolymer impact modifiers are to be classified under the Customs Tariff by applying Chapter Note 4 to Chapter 39, which requires the heading to be chosen by reference to the comonomer unit predominating by weight. On the facts recorded, butadiene predominated over methyl methacrylate, so the goods fell under Heading 3902 and Heading 3906 could not be sustained. The Tribunal also clarified that Chapter Note 4 governs heading selection first, while sub-heading notes operate only after the correct heading is identified; sub-heading notes cannot be used to shift a copolymer from one heading to another. The impugned order was set aside and classification under Heading 3902 was maintained.

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Issues: (i) Whether the imported product, a copolymer impact modifier, was classifiable under Customs Tariff Heading 3902 or 3906; (ii) whether Chapter Note 4 governed the heading-level classification and displaced reliance on sub-heading notes for changing the classification.

Issue (i): Whether the imported product, a copolymer impact modifier, was classifiable under Customs Tariff Heading 3902 or 3906.

Analysis: The product composition showed Butadiene as the predominant monomer unit at about 50%, while Methyl Methacrylate formed only 15-20%. Chapter Note 4 to Chapter 39 requires copolymers to be classified according to the heading covering the comonomer unit that predominates by weight over every other single comonomer unit. On that basis, the goods were required to be classified with the heading relevant to Butadiene. Once classification at the heading level fell under 3902, the competing heading 3906 could not be sustained on the facts recorded.

Conclusion: The product was held classifiable under Heading 3902 and not under Heading 3906, in favour of the assessee.

Issue (ii): Whether Chapter Note 4 governed the heading-level classification and displaced reliance on sub-heading notes for changing the classification.

Analysis: Sub-heading notes operate within a heading, whereas Chapter Note 4 governs selection of the correct heading for copolymers across the chapter. The Tribunal held that heading determination must first be made under Chapter Note 4 and only thereafter can sub-heading notes be applied within the selected heading. Since the goods were first required to fall under Heading 3902, a shift to Heading 3906 on the strength of sub-heading notes was impermissible.

Conclusion: Chapter Note 4 was held to be the controlling provision for heading selection, and sub-heading notes could not be used to alter the heading classification.

Final Conclusion: The impugned order was set aside and the appeal succeeded, with the goods continuing to be classified under Heading 3902 for the purposes considered in the dispute.

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