TaxTMI 
TaxTMI 
1995 (1) TMI 213
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.... aluminium oxide synthetics as one of the raw-materials. They contend that the product manufactured by them with this imported item is also an abrasive product as shown in the literature relied on by them. They contend that the term "abrasive" is something that is used for wearing down or smoothening a surface. They contend that the cutting and polishing efficiency combined together with hardness in the imported item, makes the polishing bar more effective and suitable for surface smoothening cutting and polishing the metals. They further contend that they convert the imported item into cake form by adding some binders for the convenience of their consumers, as the item cannot be used directly in powder form on the polishing wheel for effective cutting and polishing results. They rely on the manufacturer's literature which states that 40% of aluminium oxide synthetic and 30% of binders will convert into effective substance polishing media. The definition of aluminium oxide as per their manufacturer is : "Calcined aluminas are increasingly used as a basic material for polishing media and abrasives for the surface treatment of ferrous and non-ferrous metals, plastics, marble, gran....
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....positions and abrasive products are synonymous terms. The literature produced by the importer during the Personal Hearing shows various products being manufactured by them, the one whether Aluminium Oxide is being used by the importer are Canby C 101 and Canby C 102. In these compositions Aluminium Oxide is mixed with the other substances to make polishing compositions. In the handbook on electroplating referred to by the importers the two compositions are separate shown in the chapter of polishing methods one for abrasives composition and other for polishing. On page 37 the abrasive compositions are stated as under : "Abrasive compositions differ from polishing composition in that they contain abrasive grit and their action is primarily cutting rather than polishing. They have three main applications (i) Final abrasive finishing (ii) Satin finishing and (iii) De-burring". All the 3 aforesaid functions have been discussed in detail which are sequence of operations prior to the polishing of a metal. In the heading of polishing the purpose of polishing is stated as under : "The main function of a polishing process is the production a smooth reflective surface with only the mini....
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....ded under Notification 37/89-Cus. as "abrasive product". The Collector (Appeals) examined the material on record and also the reference made by the appellant to the relevant pages from the Book Metal Finishing Guide Book Directory 1985, under a title "Compositions in Bar form", but has not been convinced with the same and gave the finding in the following words : "I find from the photo copies of the catalogue/literature furnished by the appellants as Annexure `A' that there are several categories of polishing materials, such as Tripoli polishing compositions, Lime finishing compositions, Greaseless compositions, compositions for stainless steel (which also includes Hyfin and Canning Carbrax composition), Compositions for Chrome finishing, Compositions for Steel and Iron, Compositions for Silver, Gold and Platinum and Compositions for plastics and other non-metallic substances. These literatures pertain to the products of M/s. W. Ganning and Co. Ltd. of England. The appellants have claimed that they are manufacturing the items similar to the Hyfin bar, Stainless Steel white bar and canning carbrax compositions and market the same as Cambay C 101 and Cambay C 102. According to the....
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....m oxide, falling within Chapter 28 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India for manufacture of grinding wheels and other abrasive products, from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule, as is in excess of 40% ad valorem." The emphasis in this notification is on "abrasive products", one example of which is a "grinding wheel". Therefore, the intention of this notification is to provide concessional duty to such products manufactured from the aforesaid raw materials which are meant for "abrasion" and not for "polishing" in which abrasion is only incidental to the process of the polishing (as in the case of the appellants). The appellants have a licence for manufacture of "polishing compositions" and the goods in question are accepted by the appellants are being "polishing compositions". Therefore, the benefit of exemption contained in Notification 37/89-Cus., dated 1-3-1989 would not apply in this case." In view of the foregoing position I reject the appeal." 7. The appellants have assailed these findings. Shri Shankar D. Nankani, advocate arguing for....
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....ng wheels & other abrasive products". The product, which the importer manufactures is traded by them in the "Cambay" Buffing Compositions. The importer's literature states :- "Cambay polishing compositions are based on Yellow Ochre and Aluminium Oxide to give fast cut and high colouring of Metals. While Tripoli based compositions are considered responsible for respiratory diseases to the workers. Aluminium Oxide and Yellow Ochre based Compositions are considered safer from such problems. Cambay Stainless Steel, Compositions have been used with outstanding results in the buffing of all types of Stainless Steels, particularly where considerable cut may be required with the use of Cloth/Sisels Buffs/Fibre Wheels. They do the buffing, and also add admirable colour to the article. Produced from fused Alumina Oxide, they do a through job. Where cold rolled steel is being worked on, there is a rugged Cambay Composition that will meet the most demanding requirements. Excellent "Cambay" Composition can be used with Sisal Mops/Tempico Fibre Wheels for the removal of rough abrasive marks and scratches." and on "Fibre Polishing Wheels" the importers' literature states :- "Cambay" bran....
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.... page-49 and 50 is extracted below :- "Polishing compositions are available in two forms bar and liquid. Whilst bar compositions are still used for manual polishing operations, for automatic polishing it is now usual to employ liquid compositions applied by high velocity spray, or less frequently low pressure or airless spray systems. Bar Type Polishing Compositions A polishing composition consists of an abrasive such as Tripoli, calcined alumina, rough or lime together with a grease bond. The grease content of the composition serves a number of purposes. It holds the abrasive particies together in the composition block, it helps the abrasive to be retained on the mop face and acts as a lubricant during the polishing operation. Polishing compositions are generally prepared in bar form so that they can be easily applied to the polishing mop. To be both effective and economical in use, the composition must soften under the influence of frictional heat from the mop just sufficiently to enable an abrasive to be taken off by the mop and to give a clean cut on the surface being polished. It must not, however, when unduly in use, otherwise there would be wastage of composition....
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.... functioning and polish functioning only go to indicate that in the abrasive products the functioning is that of cutting rather than polishing of the surface. The notification refers to grinding wheels. The grinding wheels are in the nature of abrasive product carrying out abrasive function which are in the nature of cutting the surface rather than polishing of surface. As the literature indicates the grinding wheels perform the function of cutting surface and it makes the product fit for polishing to bring a smooth surface. The polishing composition also contained the imported item aluminium oxide synthetic as has been noted. The polishing activity is to bring in refinement and smoothness to the surface and therefore it could be brought within the broad category of "other abrasive products". The literature referred to by the appellants clearly indicate that the abrasive composition and polishing both come within the same chapter of polishing methods, therefore, the appellants' contention of that the product which they have been manufacturing and traded as fibre polish wheels could be brought within the category "other than abrasive product". Although abrasive finishing operation a....
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....ted in the same literature that `Cambay' Compositions can be used with sisal-mops for the removal of rough abrasive marks and scratches. Therefore, according to the appellants' literature on their products, it is seen that these are buffing compositions. In the literature on `Metal Finishing', which is available on record, buffing is described as the operation following polishing, and it can be divided into four operations, each of which can be an end in itself depending upon the finish required. These are Satin Finishing for producing satin, brushed or butler finishes; Cutdown Buffing for producing a preliminary smoothness; Cut and Colour buffing for producing an intermediate lustre; and Colour buffing for the production of a high gloss or mirror finish. Therefore, the products are used for buffing which is a stage beyond polishing. Further, in the Handbook on Electroplating twentieth edition by M/s. Canning available on records distinguishes abrasive compositions and also describes polishing. According to this literature, abrasive compositions differ from polishing composition in that they contain abrasive grit and their action is primarily cutting rather than polishing. They hav....
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....r has been referred to me by the Hon'ble President on account of difference of opinion between two learned Members on the following points. "Whether the synthetic aluminium oxide imported by the appellants and used in the manufacture of polishing compositions will be eligible for exemption under Notification Cus. 37/89, dated 1-3-1989 as being used in `other abrasive products' covered by the Notification." 18. The Learned Counsel basically reiterated by the submissions made before the Regional Bench and pleaded for acceptance of the view of the Hon'ble Member (J). 19. Learned D.R. mainly reiterated department's view as expressed in Order-in-Original and Order-in-Appeal and the views as expressed by the Hon'ble Member (T) and pleaded for their acceptance on the grounds mentioned therein. 20. I have gone through the orders of both the Learned Colleagues and considered the above submissions as also the technical and commercial material on record. However, I have not considered the material sought to be filed by the department during this stage of the proceedings as the same was not before the original Bench. Initially when the Learned D.R. wanted to file tes....
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....and emphasised that such compositions are not abrasive products. 26. The basic question which therefore arises before us is two fold : (i) Whether technically and commercially there is any distinction between `abrasive compositions' and `polishing compositions'; (ii) Whether such polishing compositions could be considered as other `abrasive products' in the context in which the phrase has been used in the Notification. 27. In this connection I find that extracts from the "Hand book of ELECTROPLATING" by W. Canning (12th edition) produced by the appellants indicates as follows; `ABRASIVE COMPOSITIONS' "Abrasive compositions differ from polishing compositions in that they contain abrasive grit and their action is primarily cutting rather than polishing. They have three main applications :- Final abrasive finishing. Satin finishing De-burring." FINAL ABRASIVE FINISHING "For the final abrasive finishing of ordinary mild steel and stainless steels two types of abrasive compositions are available based on emery and fused aluminium oxide, i.e. Brushing Emery Composition and Carbrax composition." (page 37) As regards Polishing it mentions ....