Composite product classification applied to two-component aluminium paint cleared for immediate combined use under tariff heading

Goods cleared in two containers intended for immediate combined use as aluminium paint were not classifiable as ready mixed paints under Heading 14-I(3)(iii). Applying the principle that two components supplied together for direct use may be treated as a single composite product, the product was held assessable under Heading 14-I(5). The lower appellate authority's classification was modified, and the Revenue's classification under Heading 14-I(5) prevailed.

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Issues: Whether the goods cleared in dual containers containing aluminium paste and medium for aluminium paint were classifiable as ready mixed paints under Heading 14-I(3)(iii) of the Central Excise Tariff or as a composite product under Heading 14-I(5).

Analysis: The product was cleared in two containers meant to be used together as aluminium paint. While the goods were not ready mixed paints within Heading 14-I(3)(iii), the arrangement was a composite product similar to a two pack system. The earlier Tribunal ruling on a comparable product had held that where two components are cleared together for immediate combined use, the unit has to be assessed as one composite product under Heading 14-I(5).

Conclusion: The goods were not classifiable as ready mixed paints under Heading 14-I(3)(iii) and were correctly assessable as a composite product under Heading 14-I(5), in favour of the Revenue.

Final Conclusion: The classification adopted by the lower appellate authority was modified and the Revenue's classification claim under Heading 14-I(5) succeeded.

Ratio Decidendi: Where two components are cleared together in a form intended for immediate combined use, they constitute a composite product assessable as one product under the appropriate tariff entry rather than as a separate ready-mixed item.

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