WHETHER PRODUCT COVER UNDER MRP

[SHIVKUMAR SHARMA]

Dear Experts

Please note that we are manufactring adhesives of acrylic co polymers packed in 30 ML & 80 ML for use in textile

Persently we are preparing invoice of transaction value not on MRP Based valuation.on bottle of 30 mL MRP mention ₹ 18/- & on 80 ML Mrp mention ₹ 38/-

We are giving the example of Invoicing as under :

100 Kg ( 3125 bottle of 30 ML).Acrylic co polymer @ 300 = 300000

Excise duty 12 5% = 3750

Chapter No.39069030

Now Our Excise Officer Is telling that your Product is falling Under chapter heading 35061000 and you have to pay duty on MRP base Value after taking abatement of 35% and prepared invoice as under:

100 Kg ( 3125 bottle of 30 ML).Acrylic co polymer:

3125Bottle *18 = 56250

Less : Abatement 35% 19688

Taxable value 36562

He telling that we have to pay excise duty on differential amount of 36562-30000 = 6562 *12,5 =820

Please give your expert legal opinion at the earliest possible.

Thanks with regards

SHIVKUMAR Sharma

[KASTURI SETHI]

Sh.Shiv Kumar Sharma,

Has the department given in writing ? Inputs/ingredients of both products are entirely different. I am of the view that you have correctly classified your product under Chapter/Heading/Sub-heading no.3906 90 30. If ingredients of the product falling under Chapter/Heading/Sub-heading No.3506 10 00 are different from the product falling under 3906 90 30, then the function/usage of both the product would also be entirely different. Do you not find any difference between the two regarding usage/function of both? Both the products have different ingredients and hence different usage/purpose/function and you have correctly classified your product and you r paying CE duty correctly on your product. If the officers of the department insist you to change your classification, get in writing. Now a days the department is very strict regarding the issuance of SCN. So no chance of issuance of lame SCN. You can take decision keeping in view of the usage and function of the product.

These are my views. I also expect views from other experts also.

[Suryanarayana Sathineni]

Dear Friend,

I have one question to you that How strong you are on the classification under which you are clearing your product presently. If you are strong , you may certainly prove using all the technical information considered by you that your classification is right and the classification suggested by the Department is wrong , your case would be strong.

Pl. work on the above and challenge the department if you are confident.

Regards

Surya

[KASTURI SETHI]

I strongly support the views of Sh. Surya Narayana, Sir.

[MUKUND THAKKAR]

Please note that we are manufactring adhesives of acrylic co polymers packed in 30 ML & 80 ML for use in textile.

kindly confirm your product are you selling in general market ? or industries specific,

if your product is industries specific, and not sales in open market, need not apply MRP based valuation.

please clearly putting stamp or label " For Industrial Use Only " in each pack. Dept never raise any query regarding MRP valuation.

[SHIVKUMAR SHARMA]

Shri Sethi Sir

In the central excise tariff 350691 is also mentioned as under. Please confirm whether our product is covered under MRP Valuation as our product is falling under tariff 39069030

350691 -- Adhesives based on polymers of headings 3901 to3913 or on rubber: 350691

--

 

[MADAN RAHEJA]

Sir,Heading 3906 of Central Excise Tariff covers Acrylic Polymers in Primary Form. Any classification under further sub-heading/tariff item has to confirm this main heading. Thus if your product is acrylic polymer in primary form then sub-classification done by you is correct. However, if it is prepared glue or adhesive of this polymer,then classification would shift to Heading 3506 of CETA. As rightly said by experts, you have to see how strong you are on classification based on technical parameters of your product.

[KASTURI SETHI]

Sh.Shiv Kumar Sharma Ji,

You have not replied to my questions asked in my reply dated 18.3.2016. I have already perused both Chapters and sub-heading no. I have already opined. You must also reply to Sh. Mukund Thakkar, an expert's reply. There is substance in his cross question. If you want more guidance, you please reply to the questions asked.

AI Summary

Classification of adhesive products determines whether MRP-based excise valuation applies after abatement or transaction value. Classification determines whether the product is an acrylic polymer in primary form (supporting the manufacturer's tariff heading and invoicing on transaction value) or a prepared adhesive (shifting classification to the adhesive heading and attracting MRP-based excise valuation with an abatement). Technical composition, function/use and market channeling are the operative criteria; preserve technical evidence, seek any departmental change in writing, and consider labelling for industrial use as a factual indicator when defending the chosen classification.