TaxTMI 
TaxTMI 
2025 (12) TMI 1154
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....459); and thereby paid Basic Customs Duty (BCD) @ 2%, CVD @ 12%, E. Cess @ 3% and SAD @ 4% at the time of clearance of the goods. 3. Samples were drawn from the consignment imported under bill of entry No. 6876946 dated 25.09.2014. Based on the test report No. 45275 dated 17.10.2014 given by Central Institute of Plastic and Engineering (CIPET) that "the item is not in compound form and also not mixed with any other substances like Plasticizers", the Department proposed to re-classify the impugned goods under the CTH Sub-heading 390410- "Poly (Vinyl Chloride) not mixed with any other substances" and more specifically under CTH- 39041090-Other category. Consequently the impugned goods are not eligible for 2% BCD under notification No. 046/2011-Customs dated 01.06.2011 (Sl.No.459) and instead BCD @ 5% is leviable on the goods under Sl.No. 458 of the said notification. Accordingly, a show cause notice dated 26.12.2014 was issued to the appellant where it was proposed to: - i. re-classify the goods under CTH 39041090; ii. deny the benefit of concessional rate of duty @ 2% availed under Notification No. 046/2011 dated 01.06.2011 and charge BCD @ 5% under Sl. No. 458 ....
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....l goods by the same Adjudicating Authority violates the principles of legal certainty, uniformity, and equality. In this regard, she relied on the judgment in the case of Novozymes South Asia Pvt. Ltd. v. Joint Commissioner of State GST, (2024) 22 Centax 75 (Guj.)/2024 (89) G.S.T.L. 333 (Guj.) to submit that the Hon'ble Gujarat High Court struck down contradictory classification orders issued by the Appellate Authority in materially identical cases involving bio-fertilizer products by emphasizing that such inconsistency erodes the predictability and fairness of tax administration. To the same effect is the judgment of the Hon'ble High Court of Madras dated 01.04.2025 in C.M.A. No. 2268 of 2024 in the case of M/s. Viewsonic Technologies India Pvt. Ltd. v. The Customs Authority for Advance Rulings & Anr., wherein it is held that the same model of projector could not be classified differently in two rulings by the same authority, and such inconsistency, in the absence of any distinguishing feature, violated the rule of law and principles of uniform classification. Applying the same principle, in the light of a prior binding decision in favour of M/s. Lila Polymers involving the same g....
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....ch as binders for pigments. 5.7 The Ld. Advocate further submitted that CTH 3904 21 10 is the specific heading applicable to non-plasticised PVC resins, and CTH 3904 10 90 is a residuary heading. She referred to Rule 3(a) of the General Rules for the Interpretation of Import Tariff to submit that "the heading which provides the most specific description shall be preferred to headings providing a more general description" and therefore, classification under the residual heading CTH 3904 10 90 is legally impermissible when a specific heading CTH 3904 21 10 squarely covers the goods in question. Furthermore, the presence of CTH 3904 21 and CTH 3904 22 as distinct sub-headings under Heading 3904 reinforces the legislative intent that CTH 3904 10 does not cover either plasticised or non-plasticised PVC resins. Therefore, classification of the impugned goods under CTH 3904 10 90 is legally unsustainable. 5.8 The Ld. Advocate for the appellant prayed for setting aside the impugned Order-in-Appeal No. 862/2016 dated 14.09.2016. 6.1 Per contra, Ms. Anandalakshmi Ganeshram, the Ld. AR for the Revenue submitted that in the proceedings before the adjudicating authority and the lower a....
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.... in PVC resin is referred as per IS:4669. However, it is evidently proved that the resin is dissolved completely without any insoluble matter in the solvent Cyclohexanone which is correlated & confirmed by K-value test result obtained. In case if the material is added with any of the inorganic additive which will reflect in filler content as residue. But the test result is showing nil. Furthermore the submitted sample of PVC resin (SP660) is white in colour and free flowing powder in nature and hence the sample is confirmed as PVC resin without any additives including plasticizers." 6.3 The Ld. AR contended that it is very clear from the test report along with the clarification given by CIPET that the item imported (i) Is a PVC resin, a single thermoplastic prime material; (ii) Is not a compound since it is not mixed with any other substance; and (iii) Is a PVC resin without any additives including plasticizers. In view of the categorical report by CIPET the contention of the appellant that non-plasticizers have been added in the item imported is without any basis and cannot be accepted. 6.4 Referring to the Order-in-Appeal C. C....
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....es, bristles and latex coatings and in the manufacture of pipes for chemical processing equipment. Polytetrafluoroethylene (PTFE), one of the most important fluoro-polymers, has very wide-ranging applications in the electrical, chemical and engineering industries. Because of its high working temperature it is an excellent insulating material and due to its resistance to chemicals it is almost indestructible. Other fluoro-polymers include polymers of chlorotrifluoroethylene, poly (vinylidene fluoride), etc. 16) As per the Explanatory Notes above PVC is a rigid colourless material and it is often necessary to add stabilizers, plasticisers, extenders, fillers etc to make it useful plastics. The additives are added according to the requirement and use of the resin for different purposes Test Report vide no. 24936 dated 25/11/2014 given by CIPET in the case of M/s Ramnath & Co Pvt Ltd in respect of identical goods imported from the same producer and supplier as mentioned above states that the sample resin is dissolved completely without any insoluble matter in the solvent Cyclohexanone which is correlated & confirmed by K-Value test result obtained and in case....
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.... i. Whether the item imported by the Appellants, viz. "PVC Resin SP660 Suspension Grade", is classifiable under CTH 39042110 as "Other Poly (Vinyl Chloride): Non-Plasticised" or under the CTH Sub-heading 390410- "Poly (Vinyl Chloride) not mixed with any other substances" and more specifically under CTH- 39041090-Other category; and ii. Consequently, whether BCD is chargeable @ 2% on the impugned goods by granting exemption under Notification No. 046/2011-Customs dated 01.06.2011 (Sl.No.459) or chargeable @ 5% BCD under Sl. No. 458 of the said notification. 9. In this case, Revenue has classified the goods under CTH 39041090 by placing reliance on the test report and clarification dated 25.02.2015 given by CIPET in respect of goods imported by another importer, viz. Ramnath & Co. from the same producer as the test report No. No. 24936 dated 25.11.2014 given by CIPET in respect of impugned goods imported by the appellant is identical to the test report No. 45275 dated 17.10.2014 given in respect of goods imported by M/s. Ramnath & Co. Pvt. Ltd., on which the above clarification dated 25.02.2015 was given by CIPET. Identical issue came up for consideration before this Tr....
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....sting parties. We note that this issue was previously addressed by this Bench in Ramnath & Co. (supra), the company whose test report was also made applicable to the present case. The CIPET clarification dated 25.02.2015, relied on in Ramnath & Co., is the same one relied upon here. The relevant portion of the order is as follows:- "4. We have heard the contesting parties and have carefully gone through the appeals and submissions made. The dispute pertains to the classification of 'PVC Resin SP 660 Suspension Grade', under CTH 3904 2110 - Poly (vinyl Chloride) resins, [appellant] or CTH 3904 1090 - Poly (vinyl Chloride), not mixed with any other substances: Other [revenue]. 5. Under the Customs Tariff Act, 1975, imported goods are classified based on tariff headings/ sub-headings, section and chapter notes, and the General Rules for the Interpretation of the First Schedule to the Customs Tariff Act, 1975 (GRI). Rule 1 of the GRI provides that the classification of goods shall be determined according to the terms of the headings of the tariff and any relative Section notes or Chapter notes. If the goods cannot be classified solely on the basis of GRI 1, Rules 2 to....
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....ined. In case if the material is added with any of the inorganic additive which will reflect in filler content test as residue. But the test result is showing nil. Furthermore the submitted sample of PVC resin (SP660) is white in colour and free flowing powder in nature and hence the sample is confirmed as PVC resin without any additives including plasticizers. Hence we state that there is no change in our Test Report No. 45601 dated 25.11.2014." (emphasis added) 7. The Ld. Original Authority after examining both the reports came to a conclusion which he summarised at para 29 of the impugned order, as below; "Thus combined reading of manufacturer's product literature, clarification given by the manufacturer and the two reports given by CIPET, it is very clear that the PVC resin grade SP660 is a single thermoplastic material and it is not a compound since it is not mixed with any other substance like plasticizer or non-plasticizer and is rightly classifiable under sub-heading 390410 only. In view of the above discussion and findings, I pass the following order." 8. When the matter was taken up before the Ld. Commissioner Appeals,....
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....(vinyl chloride) resins 3904 21 90 --- Other 3904 22 -- Plasticized 3904 22 10 --- Poly (viny chloride) (PVC) resins 390422 90 --- (emulsion grade) Other Thus on a combined reading of eight digit triple dash heading 39042110 (Poly vinyl Chloride resins) with its immediately preceding six digit double dash heading 3904 21 (Non- plasticised) show that impugned goods (Poly Vinyl Chloride Resins without being plasticized) would fall under only CTH 39042110. Whereas the entry against CTH 39041090 which is a triple dash heading reads as "other". The other triple dash heading above viz. 39041010 reads as "Binders for pigments". The parent single dash six-digit level heading viz. 3904 00 reads as "Poly (vinyl chloride), not mixed with any other substance". A combined reading of triple dash eight-digit level heading along with Its immediately preceding single dash six-digit level heading indicates that CTH 39041090 covers Poly (vinyl chloride), not mixed with any other substance, that are other than binders for pigments. The test report has stated that the PVC does not contain any other substance like plasticizers which means that the presence of an....
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.... a delay in the reassessment of the goods resulting in unnecessary expenditure to the appellants towards detention / demurrage charges. Also, no speaking order was issued to the appellants in terms of Section 17 (5) of the Customs Act, 1962. In view of the above discussions, it is held that CTH 39042110 would be the appropriate heading for the impugned goods. Accordingly, the assessment is set aside." (emphasis added ) 8.1 However the Ld. Commissioner Appeals in the impugned order differentiated his earlier order dated 19.01.2015, in the following manner; The appellant has drawn reference to the Order No. C Cus. 3 & 4/2015 dated 19.1.2015 passed by this authority in the appeals filed by M/s. Lila Polymers P Limited holding that the goods viz. PVC resin Suspension Grade are to be classified under CTH 39042110. Such a decision was taken based on the test report which certified that the sample does not contain substance like plasticizer and that it did not state that the sample does not contain any other substance altogether. whereas in the present case, the Test Report and the clarification have stated that the sample may be considered as a prime m....
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....e plea of the appellants that PVC resin means only pure resin whereas PVC would denote PVC having other additives like plasticizers, stabilizers, lubricant, pigment, etc. The appellant has not substantiated his plea with any technical / expert evidence. The Tariff entries are totally opposite to what the appellant has pleaded. The entry against CTH 390410 reads as Poly (Vinyl Chloride), "not mixed with any other substances". The succeeding single dash reads "other poly (Vinyl Chloride) which means that it covers PVC other than not mixed with any other substance. Thus, it emerges that only those PVC mixed with any other substance can fall under the scope of CTH 390421. Whereas the impugned PVC is not mixed with any other substance, therefore, they cannot fall under the heading 390421. (emphasis added) 9. We find that as per the HSN when the imported goods are falling under a specific heading of the Customs Tariff, the goods must be classified under that heading only. This first principle of classification as also stated by the Hon'ble Supreme Court in several judgments, some referred to above, has also been stated by the Commissioner Appeals himself in his order da....
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....ds at times makes it necessary as discussed above, to understand the legislative intent in issuing these notifications by looking at the subject of legislation and object of the law, when an ambiguity exists." 10.3 We find that the Ld. Commissioner Appeals had in his alternate finding freed himself from the restricting boundaries of the test report in the classification of similar goods in M/s Lila Polymers (supra). He opined that when an entry at eight-digit level covers the goods specifically then it should be taken as the most appropriate heading. Further the CTH chosen by the department i.e. CTH 39041090 is a residual entry. Whereas the CTH 39042110 is specific. Rule 3 (a) of the General Rules for the Interpretation of Import Tariff has laid down that "the heading which provides the most specific description shall be preferred to headings providing a more general description". Therefore, CTH 39041090 being a residual entry at eight-digit level gets ruled out. 11. Based on the discussions we feel that the Ld. Commissioner Appeals had correctly interpreted the test reports and the law in M/s Lila Polymers (supra) and should not have allowed a change in semantics....