Excisability and classification of processed abrasive grains turned on market identity, processing, and Chapter 25 exclusion.

Abrasive grains obtained from crushed and graded grinding wheel scrap were treated as excisable goods because they had a definite market identity, name, character and use, and were sold in graded forms for specific applications. The claim that they were mere non-excisable scrap was rejected since the record showed processing, grading and commercial marketing rather than worthless refuse. Classification under Chapter 25 was denied because Note (2) applies only to products merely washed, crushed, ground or similarly processed without the relevant changes, while these goods involved added binding material and firing. They were held classifiable under sub-heading 3801.90.

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Issues: Whether abrasive grains obtained by crushing and grading process scrap of grinding wheels were non-excisable scrap or excisable goods, and whether they were classifiable under sub-heading 2505.00 or under sub-heading 3801.90.

Analysis: The goods were found to have a definite market identity, name, character and use, and were sold in graded forms for specific applications. The claim that they were mere scrap was rejected because the product was not shown to be worthless refuse and the factual record showed processing, grading and marketing under different commercial descriptions. Chapter 25 was held inapplicable because Note (2) covers only products washed, crushed, ground or similarly processed without the prohibited changes, whereas the present goods had binding material added and were fired. Heading 38.01 was held to be wide enough to include miscellaneous products consisting of mixtures of natural products, and the inclusive wording was read as enlarging rather than restricting its scope.

Conclusion: The goods were held to be excisable and correctly classifiable under sub-heading 3801.90, and the assessee's challenge failed.

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