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Classification of Rubber Cement or Black Vulcanising Cement rubber
solution etc. whether under 35.06 or 40.05 of the Schedule to CET
Circular
No. 561 dated 7th December 2000
1.
I am directed to invite your attention to Board�s Circular No. 30/88-
CX- 3 dated 7.12.88 and 32/90 �CX-3 dated 28th June, 90, wherein it
was clarified that vulcanisation solution or rubber solution was classifiable
under Heading No. 40.05 of the Central Excise Tariff.
2.
The review of the above mentioned circulars has been necessitated in view
of the number of CEGAT and Court judgements classifying the goods in question
under Heading No. 35.06 of the Central Excise Tariff, as well as the decision
taken in the tariff cum general conference of the Chief Commissioners held at
Mumbai on 29.8.2000.
3.
The Tribunal has held that rubber cement or black vulcanising cement used
as adhesive in retreading of tyres was classifiable under heading No. 35.06 of
the CET in the case of Elgi Polytex Ltd, Coimbatore Vs. CCE, Coimbatore 1988
(34) E.L.T 404 (Tribunal). The appeal filed by the department against this
judgement in Supreme Court was dismissed by the Apex Court on 6.4.98 In this
judgement the CEGAT had held that as the subject product contains, apart from
rubber compound and solvent, sulphur, carbon black, Stearic acid, zinc oxide,
fillers and accessories, the product answers to the description of rubber based
adhesives. The correct classification of the product, therefore, would be as a
prepared adhesive in Chapter 35 of the Central Excise Tariff Schedule."
4.
On a similar issue of classification of universal spray compound, relying
on its earlier decision in the case of Elgi Polytex Ltd., CEGAT had held it to
be classifiable under Chapter Heading 35.06 in the case of M/s. Indag Rubber
Ltd. Vs. CCE. Jaipur (1997) (96) E.L.T. (559) The Supreme Court upheld this
judgement and dismissed Department�s appeal in April 1998.
5.
In fact in a reasoned order, Hon�ble Apex court in the case of CCE,
Madras Vs. MRF Ltd. upheld the CEGAT order that rubber cement or black
vulcanising cement manufactured from vulcanised rubber was classifiable under
Heading 35.06 after 10.2.87 and not under 40.05 as claimed by Revenue [1998 (97)
E.L.T. 23 (SC) ].
6.
The matter was also discussed in the tariff cum general conference of the
Chief Commissioners held at Mumbai on 29.8.2000, where it was decided that
taking into account various CEGAT judgements, which were appealed against but
were all dismissed by the Supreme Court, it would be appropriate to revise the
classification of the goods in question from Chapter Heading 40.05 to 35.06.
7.
The Board is in agreement with the above reasoning. Accordingly, it is
ordered that the Board�s earlier Circular No. 30/88 - CX- 3 dated 7.12.88 and
32/90 �CX-3 dated 28th June, 90, are modified to the extent that
products marketed under separate nomenclatures like vulcanising solution/rubber
solution/universal spray cement/ rubber cement/black vulcanising cement
essentially comprising rubber compound, certain vulcanising agents and certain
other adhesives and solvents, which are used for these adhesive properties in
retreading of tyres etc. are classifiable under Heading 35.06 of the Central
Excise Tariff, instead of Heading 40.05.
8.
The above clarification may be brought to the notice of the lower field
formations and the Trade interests may also be suitably
advised.
9.
All pending assessment/disputes may be finalised accordingly.
10.
Hindi Version will follow.
11.
Receipt of the letter may please be acknowledged.
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