1990 (1) TMI 174 - AT - Customs

Tribunal rules in favor of appellants in DESMODUR T-80 classification dispute

POLY FOAM INDUSTRIES Versus COLLECTOR OF CUSTOMS

POLY FOAM INDUSTRIES Versus COLLECTOR OF CUSTOMS - 1990 (47) E.L.T. 427 (Tribunal) Issues:Classification of imported goods under heading 3909.50 or 2929.10 of CTA 1975.Detailed Analysis:1. The primary issue in this case was the classification of the imported goods, 'DESMODUR T-80 (ISOCYNATES),' under heading 3909.50 of CTA 1975 or 2929.10. The department classified it under heading 3909.50, while the appellants sought classification under 2929.10. The appellants argued that the goods should be classified under Chapter 29, Heading 2929.10, as an organic chemical isocyanate. They contended that Section Note 3 of Section VI of CTA 1975 had not been considered by the authorities before rejecting their claim.2. During the hearing, the appellants requested the case to be decided based on a Trade Notice issued by the Central Board of Excise & Customs, Circular No. 2/89-CX.3. The Trade Notice clarified the assessment of Polyols and Isocyanates individually on merits, even if imported together.3. The Tribunal, after examining the grounds of appeal and the Trade Notice, allowed the appeal. They noted that the Trade Notice referred to by the appellant covered the issue at hand, supporting the appellants' classification argument under Heading 2929.10.4. The Central Board of Excise & Customs had previously addressed the assessment of Polyols and Isocyanates when supplied together for the production of Polyurethane Foam. The Board concluded that these goods should be assessed individually on merits, even when presented together at the time of sale, rather than as polyurethane foam.5. The Assistant Collector of Customs had initially classified the imported goods under 3909.50 based on the classification of the end product. However, the Tribunal's decision aligned with the Trade Notice and clarified that goods like Polyols and Isocyanates should be assessed individually, not as a set for the end product.6. The appellants argued that the imported goods did not meet the conditions to be considered a set under Section Note 3 to Section IV of CTA 1975. They contended that each item should be classified on its own merits, as clarified in the Trade Notice.7. Ultimately, the Tribunal upheld the appellants' contention, allowing the appeal and confirming that the imported goods should be assessed individually on merits under Heading 2929.10, rather than being classified under Section Note 3 to Section VI as previously held by the authorities.8. In conclusion, the appeal was allowed in favor of the appellants, emphasizing the need for individual assessment of Polyols and Isocyanates based on their merits, as per the Trade Notice and the classification under Heading 2929.10 of CTA 1975.