TaxTMI 
TaxTMI 
2025 (12) TMI 1153
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.... dated 01.06.2011 (Sl.No.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. The Department noticed that the test report given by Central Institute of Plastic Engineering upon testing of samples drawn from the consignment of "Polyvinyl Chloride (PVC) Suspension Resin SP 660 Grade" imported by another importer shows that the said item is not in compound form and also not mixed with any other substances like Plasticizer / non plasticizers / any other substances. Department entertained the view that the imported grade of PVC Resin is not classifiable under the CTH 39042110/39042190 and it is rightly classifiable 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-classif....
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....he 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 goods, the rejection of the appellant's classificati....
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.... 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. 863/2016 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 adjudicating authority the appellant has contended t....
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....ccepted. 6.3 Referring to the Order-in-Appeal C. Cus II No. 3 & 4 of 2015 dated 19.01.2015 passed in the case of M/s. Lila Polymers Pvt. Ltd. which has been relied by the appellant, the Learned AR submitted that the same is not applicable to the present case as the CIPET test report in that case was different from the CIPET test report relied upon in the present case. 6.4 The Ld. AR has relied upon the Adjudicating Authority's finding on classification of the imported product as detailed in paras 15 and 16 which are extracted for ease of reference: - "15) The HSN Explanatory Notes to Chapter Sub heading 3904 reads as follows. 39.04-Polymers of vinyl chloride or of other halogenated olefins, in primary forms. 3904.10 - Poly(vinyl chloride), not mixed with any other substances - Other poly(vinyl chloride): 3904.21 -- Non-plasticised 3904.22 -- Plasticised 3904.30 - Vinyl chloride-vinyl acetate copolymers 3904 40 - Other vinyl chloride copolymers 3904.50 - Vinylidene chloride polymers - Fluoro-polymers: 3904.61 -- Polytetrafluoroethylene 3904.69 -- Other 3904.90 - Other Thi....
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....med by K-Value test result obtained and in case if the material is added with any of the inorganic additive which will reflect in filler content as residue. However in this case the test result is showing nil residue, other than standard residue which is permissible as per test standards Hence the imported item is unmixed PVC and therefore rightly classifiable under 390410 only." 6.5 Further, referring to the website (www.thaiplastic. co. th) of manufacturer of the impugned goods imported by the appellant, the Learned AR submitted that specific literature found upon browsing the said website revealed the following details: "Product description: Polyvinyl Chloride Homopolymer having medium molecular weight, is white and free-flowing resins produced by suspension polymerization process. The resin can easily blend with variety of additives to achieve desired qualities needed in many applications. Applications are ranging from general purpose to special products regarding customer's satisfactions. Typical application: Rigid pipe, Door and Window Frames, Edge Band, Conduit, Other Rigid Profiles Physical Properties: Property Test ....
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.... Vs. Commissioner of Customs (Final Order No. 40478/2025 dated 21.07.2025) where it was held that the imported goods are correctly classifiable under sub-heading 3904.21 (Tariff Item 3902 21 10). The relevant portions of the said decision in Final Order No. 49467/2025 dated 29.07.2025 in the case of M/s. Arun Polymers read as under: - "3.1 The Ld. Counsel for the appellant submitted that the test report dated 25.11.2014 given by CIPET was in favour of the appellant and it stated that the sample may be considered as 'Polyvinyl chloride (PVC) resin'. He stated that hence the said goods fall under the specific CTH 3904 2110 of the Customs Tariff. However since certain doubts were raised by revenue they had sought a clarification from CIPET, through the department, and who again vide their letter dated 25.02.2015 further reiterated their stand. In spite of both the reports being available with the Original Authority the impugned goods were reclassified under CTH 3904 1090 and the benefit contained under Notification No. 46/2011-Cus was denied. Further before the Ld. Commissioner (Appeals), it was submitted that the said authority in the case of M/s. Lila Polymers Pvt. Ltd. vid....
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.... in a heading and the Section and Chapter Notes do not exclude classification in that heading, the heading applies. 5.1 Hence a commodity cannot be classified in a residuary entry, in the presence of a specific entry, even if such specific entry requires the product to be understood in the technical sense [see Akbar Badrudin Vs Collector of Customs, 1990 (2) SCC 203 / 1990 (47) E.L.T. 161 (S.C.); Commissioner of Customs Vs G.C. Jain, 2011 (12) SCC 713 / 2011 (269) E.L.T. 307 (S.C.)]. 5.2 The relevant portion of the Schedule to the Customs Act 1975, useful for understanding the classification of the impugned goods is discussed in the judgment of the Commissioner Appeals Dated 19.01.2015, extracted at para 8 below and is hence not being reproduced separately. 5.3 With this understanding of the legal provisions, we can examine the issue at hand. 6. The impugned goods were tested by CIPET. The test report dated 25.11.2014 described the goods as under; "Comments:- Based on the above test results and the visual appearance, the submitted sample may be considered as Polyvinyl Chloride (PVC) resin which is single thermoplastic material in powder ....
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....9042110. Whereas the department has changed the classification to CTH 39041090 in the reassessment. Sample was drawn from the consignment and sent to CIPET for test. The Test report has stated as follows: Based on the above test results and visual appearance, the submitted samples may be considered as Poly Vinyl Chloride (PVC) which is single thermoplastic material in powder form. The submitted sample may be considered as prime material, and it is not containing any other substances like plasticizer. From the above it can be seen that the test report states that the sample does not contain any other substance like plasticizer. It does not state that the sample does not contain any other substance altogether. This shows that the sample is PVC not containing only plasticizers. The test result does not rule out the presence of substances other than plasticizers along with the PVC. The relevant entries are reproduced below : 3904 00 - Poly (vinyl chloride) not mixed with any other substances 3904 1010 --- Binders for pigments 3904 10 90 --- Other - Other poly (vinly chloride) 3904 21 -- Non-plasticized 3904 21 10 --- Po....
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.... Notwithstanding the above, on a comparison with eight digit and triple dash level between CTH 39041090 and CPH 39042110 shows that CTH 39042110 is the most appropriate for the impugned goods namely PVC resins without plasticizers. 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. Further, there are two separate headings succeeding CTH 3904 00 to cover separately Non plasticized PVC Resins (CTH 390421) and plasticized PVC Resin (CTH 3904 22). The very fact that there are separate sub headings to specifically cover plasticized PVC resin (3904 22) and non-plasticized PVC resin (390421) implies that CTH 390400 would not cover non plasticized PVC resin. Further, the appellants have s....
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....drawn from consignments covered by one of the bills of entry referred in the impugned order in original and sent to CIPET for testing. The Test report in the column "Comments has stated as follows:: "the sample may be considered as polyvinyl chloride (pvc) resin, which is a single thermoplastic material in powder form, it may be considered as prime material and it may not be considered as compound since it is not mixed with any other substances"." It could be seen that the test report has stated that the sample may be considered as a prime material and cannot be considered as a compound as it is not mixed with any other substance. The testing Lab has given clarification which is as follows :: "With reference to your above cited letter we have thoroughly verified the supplied sample of PVC resin SP 660 bearing B.E No. 6884672 dated 25.9,2014 and confirmed that the sample is PVC resin and not a compound. Though the sample is containing volatile matter, in the range of 0.23% to 0.24% it may not be considered as compound because of the additive added therein. The volatile loss permissible in PVC resin is referred as per IS: 4669." In the clarificatio....
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....d. Commissioner Appeals in M/s Lila Polymers (supra), had classified the goods under CTH 39042110 on two grounds; (i) The test report states that the submitted sample may be considered as prime material, and it is not containing any other substances like plasticizer. (ii) Notwithstanding the above position, he went on to hold that, on a comparison with eight digit and triple dash level between CTH 39041090 and CPH 39042110 shows that CTH 39042110 is the most appropriate for the impugned goods namely PVC resins without plasticizers. 10.1 We find that in the case of the appellant's case too no plasticizer was found, as per the test report. It stated that the submitted sample may be considered as prime material and it may not be considered as compound, since it is not mixed with any other substance. It appears that the phrase "it may not be considered as compound" as in test report of the appellants goods, instead of "and it is not containing any other substances like plasticizer" in M/s Lila Polymers, appears to have made him change his opinion. In fact in M/s Lila Polymers he reasoned that the report does not state that the sample does not contain any othe....
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....ortified in our views by the order of a coordinate Bench of this Tribunal at Kolkata in the case of M/s Surabhi Enterprises (supra) cited by revenue. In that case the only dispute as stated by revenue was that the imported goods being 'uncompounded or pure PVC Resin' are classifiable under Tariff Item 3904 10 90 within sub-Heading 3904.00, which covers 'Poly (vinyl chloride), not mixed with any other substances', whereas, the Appellants have classified the goods under Tariff Item 3904 21 10 which covers 'Poly (vinyl chloride) resins', within sub-heading 3904.21 which covers 'other poly (vinyl chloride) non-plasticised'. However, this change in CTH pertained to the period after 31.03.2017 when 'Poly (vinyl chloride) resin' falling under the heading 3904 2110 was deleted and shifted to 3904 10, as per the Finance Act, 2017. The period in this case is prior to the change made in the heading when 'Poly (Viny Chloride) resin' was covered under a specific tariff heading. The Tribunal at para 5.3 held; 5.3. From the Heading 39.04, it is evident that during the period in dispute, Tariff Item 3904 21 10 was specific entry for 'Poly (vinyl chloride) resin'. It is settled law....