Decided on October 21,1991



S.L. Peeran, Member (J) - (1.) IN this appeal, the appellant is aggrieved with the order of the Collector (Appeals) No. 123/87 dt. 31 -7 -1987 by which he has rejected the appellant's plea that their product varnish and Gloss -o -Gloss are not classifiable under Chapter Heading 3208.90 of Central Excise Tariff, 1985.
(2.) THE question that arises for our reconsideration in this appeal is the correct classification for the products picture varnish and Gloss -o -Gloss manufactured by the appellant's Tansi Polish Units at Madras. They filed a classification list No. 83/86 in respect of Gasket shellac and Anti -corrosive Black paints, picture varnish and gloss -o -gloss manufactured by them under Chapter Heading 32, 27 and 38 of CET Act, 1985. The department did not accept the classification sought by them in respect of picture varnishes and gloss -o -gloss under Heading 3208.90 attracting duty at the rate of 20% ad valorem. Therefore, the department issued a show cause notice dt. 23 -1 -1987 asking them to explain as to why this two product should not be classified under Chapter No. 3210.90 of Central Excise Tariff Act, 1985. It was stated in the show cause notice that note 3 to chapter 32 indicates that, heading in 32.08 includes solution (other than collodions) consisting of any products specified in Heading Nos. 39.01 to 39.13 in volatile organic solvent exceeds 50 per cent of the weight of the solution. It was stated in the show cause notice that the assessee had indicated in the classification list that the solid content of their two products is 50% and therefore had exceeded the specified 50% under Note 2 to Chapter 32; therefore, the product was classifiable under 3210.90.
(3.) THE assessee filed their reply on 5 -2 -1987 contending that the two products manufactured by them are used in the printing industries as a over coat varnish on the paper after the printing to give a gloss -o -gloss to the printed matters; and gloss -o -gloss varnish is also used for coating over playing cards; and therefore these two items cannot be used for painting and varnishing on any other surface. They contended that the products are in the form of solution in a non -aqueous medium (spirit); and it is sold in the form of a non -aqueous and the weight of solution is only 42% confirming to the description under Note 3 to Chapter 32. The assessee had further stated that under Rule 3A, where the goods produced by them confirms to a particular specific description under tariff item, that tariff item alone is to be preferred to any other tariff item and hence they pleaded for classifying the two products under TI 3208.90 and not under Tariff Item 3210.90 of CET Act, 1985. The Assistant Collector upheld the contention of the assessee and held that the two products to be classified under Tariff Item 3208.90 of Central Excise Tariff Act, 1985, on the following forms as (a) to (d) in the order -in -original : (a) It is seen from the chemical report that the composition of picture varnish is based on Maleic Resin, which is nothing but a chemically modified natural polymer dispersed or dissolved in a non -aqueous medium; (b) Varnishes are liquid preparations used for protecting or decorating surfaces. They form a dry, water insoluble, relatively hard, more or less transparent or translucent smooth, continuous film which may be glossy, matt or satiny. It is seen that Printing Varnish and Gloss -o -gloss, manufactured by the assessee are used in the printing industries as a over -coat varnish on the paper after the printing to give a gloss to the printed matter. The gloss -o -gloss varnish is also used for coating over playing cards, so as to add gloss and enhance the longevity of the same. (c) Varnishes of the description in which the secondary ingredients are in the form of solution the weight of the solvent or the percentage of the solvent content thereon is not the criterion. (d) Since, Printing varnish and Gloss -o -gloss are based on chemically modified natural polymers and is capable of being dispersed or dissolved in an non -aqueous medium, the question of classifying it as 'solutions' as defined in Note 3 to Chapter 32, again for a second time does not arise. ;

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