TaxTMI 
TaxTMI 
1993 (11) TMI 119
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....s a preparation based on Titanium Dioxide (pigment), and the second one was found to be a preparation based on other colouring matter. On 20-9-1991, the Assistant Collector issued a show cause notice to the appellants alleging that the imported goods were preparations based on organic/ inorganic/other colouring matter. The show cause notice referred to Note 3 to Chapter 32 and alleged that the crayons for which the goods had been imported were colouring preparations. The appellants were asked to show cause as to why the goods already ex-bonded and also the goods lying in the warehouse should not be assessed under Heading 3204.17 as a preparation based on colouring matter (pigment) and under Tariff Heading 3206.10 as a preparation based on Titanium Dioxide and why the appellants should not pay duty amounting to Rs. 4,86,371.85 instead of Rs. 2,08,882/- already paid. The appellants claimed that the goods were correctly classifiable under Heading 39.01. They contended that the goods were not based on colouring matter and they were not used as ingredients in the manufacture of colouring preparations. They also submitted that crayons could not be regarded as colouring preparations. T....
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....ed that according to the Concise Oxford Dictionary and Oxford Advanced Dictionary, "preparation" implies "specially prepared". He contended that 'Crayon' being an item which is specially prepared for imparting colour to paper it has to be deemed as a preparation. In this regard he referred to the Tribunal's decision in the case of Lotus Inks, Madras v. Collector of Customs, Madras reported in 1984 (18) E.L.T. 387 wherein while examining the distinction between "Dyeing" and "Colouring", the Tribunal had observed that "colouring" can be by coating, staining, covering, the purposes being protection, beautifying, giving a surface property not present in the coloured material, writing etc. 4. In his rejoinder, the learned Counsel submitted that the case law cited by the learned SDR was not relevant to the point at issue. He stated that the imported material was essentially a moulding powder which on moulding takes the shape of 'Crayons'. He contended that under these circumstances the material in question could not be deemed as a 'colouring preparation' or 'master batch' since such preparations are not used for moulding purposes. 5. We have examined the records of the case and con....
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....  -   - (c) -   -   -   -   - (d) -   -   -   -   - In addition to the exclusions mentioned in Note 2, the Chapter excludes (a) Concentrated dispersions of colouring matter in plastics having the character of products of Chapter 32; see, for example, the Explanatory Notes to Heading 32.04 [paragraph (1)(C) regarding concentrated dispersions of colouring matter in plastics, and paragraph (II)(2) concerning organic luminophores e.g. rhodamine B in plastics]. Heading 32.05 (seventh paragraph concerning concentrated dispersions of colour lakes in plastics) and Heading 3206 (Part A) sixth paragraph, sub-paragraph (1) concerning concentrated dispersions of other colouring matter in plastics). (b) Preparations of polymers of Heading 39.01 to 39.13 specially formulated for use as glues or adhesives and products of Headings 39.01 to 39.13 put up for retail sale as glues or adhesives, not exceeding a net weight of 1 kg. (Heading 35.06). (c) Plates and articles thereof (other than the goods of Heading 39.198 or 39.19) printed with motifs, characters or pictorial representations, wh....
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....TS OR AS LUMINOPHORES, WHETHER OR NOT CHEMICALLY DEFINED (+) Synthetic organic colouring matter and preparations based thereon as specified in Note 3 to this Chapter : 3204.11 Disperse dyes and preparations based thereon 3204.90 Other (I) SYNTHETIC ORGANIC COLOURING MATTER. WHETHER OR NOT CHEMICALLY DEFINED; PREPARATIONS BASED ON SYNTHETIC ORGANIC COLOURING MATTER AS SPECIFIED IN NOTE 3 TO THIS CHAPTER Synthetic organic colouring matter is generally obtained from oils or other products of the distillation of coal tar. This heading applies, inter alia, to: (A) ---- (B) ---- (C) Concentrated dispersions of synthetic organic colouring matter in plastics, natural rubber, synthetic rubbers, plasticisers or other media. These dispersions are usually in the form of small plates or lumps and are used as raw materials for colouring rubber, plastics, etc. in the mass. (D) ---- (E) Other preparations based on synthetic organic colouring matter of a kind used for colouring any material or used as ingredients in the manufacture of colouring preparations. However, the preparations referred to in the last sentence of Note 3 to this Chapter are excluded. 32.0....
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....se are used for colouring in the mass plastics, etc., or as ingredients in preparations for printing textiles. They are normally in the form of pastes. ... ... ... ... ..." 8. It is seen that the goods assessed under Heading 32.04.17 on test by the Chief Chemist were found to be in the form of coloured irregular chips composed of synthetic resin, wax, fillers and organic and inorganic colouring matters. As seen from the impugned order the major constituents were polyethylene (synthetic resin) 32.7 to 50% and colouring matter 11 to 18%. According to the Oxford Advanced Dictionary by A.S. Hornby, the expression "preparation" means : "kind of medicine, food, etc. specially prepared". The imported goods which have evidently been produced by mixing of polyethylene with other materials viz. organic and inorganic colouring matters, wax and fillers are undeniably 'preparations' which are excluded from the scope of Chapter 39 in terms of the 'General' notes under Heading 3901.10 of the HSN read with Note 3 of Chapter 32 of HSN in terms of which preparations used for colouring any material or used as ingredients in the manufacture of colouring preparations fall under Headings 32.03 to ....