OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE, CHENNAI-II

473,MHU COMPLEX, NANDANAM, ANNA SALAI, CHENNAI-35.

TRADE NOTICE NO:03/20001 Dt.30.01.2001

Sub: C.Ex-Classification of Rubber Cement or Black Vulcanizing Cement Rubber

Solution etc. whether under 35.06 or 40.05 of the Schedule to CET.and

Communication of Notification No.1/2001- CE dt 22.01.2001-Reg.

A copy of Board’s Circular No.561/2000-CX issued in F.NO.99/3/98-CX.3 dt 07.12.2000 and Ministry’s Notification No.1/2001-CE issued in F.NO.354/13/2001-TRU dt 22.01.2001 are communicated herewith for informations and necessary action.

The contents of this Trade Notice may please be brought to the notice of all Constituents members of your association in general and manufacturers in particular.

(Issued in C.No.IV/16/09/2001 Tech.)

(G.V.KRISHNA RAO)

JOINT COMMISSIONER (TECH.)

As per mailing list

(Both Trade & Department)

Circular No. 561/57/2000-CX

7^thDecember, 2000

F. No.99/3/98-CX.3

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

Subject: Classification of Rubber Cement or Black Vulcanizing Cement rubber solution etc. whether under 35.06 or 40.05 of the Schedule to CET.

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 28^th June, 90, wherein it was clarified that vulcanization 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 vulcanizing 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 vulcanizing cement manufactured from vulcanized 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 28^th June, 90, are modified to the extent that products marketed under separate nomenclatures like vulcanizing solution/rubber solution/universal spray cement/ rubber cement/black vulcanizing cement essentially comprising rubber compound, certain vulcanizing 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.

(Mallika Mahajan)

Officer on Special Duty (CX-3)

Notification No. 1/2001-Central Excise

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Central Government being satisfied that it is necessary in the public interest so to do, hereby directs that each of the notifications of the Government of India in the Ministry of Finance (Department of Revenue), specified in column (2) of the Table hereto annexed, shall be further amended in the manner specified in the corresponding entry in column (3) of the said Table.

TABLE

S.No.	Notification No. and date	Amendment
(1)	(2)	(3)
1.	32/99-Central Excise, dated the 8^th July, 1999	In the said notification, in the first paragraph, for the words, figures and brackets "the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (1 of 1986)", the words, figures and brackets "the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (1 of 1986) other than cigarettes falling under Chapter 24 of the said First Schedule" shall be substituted.
2.	33/99-Central Excise, dated the 8^th July, 1999	In the said notification, in the first paragraph, in item (a), for the words "specified in the Schedule appended to this notification", the words, figures and brackets "specified in the Schedule appended to this notification other than cigarettes falling under Chapter 24 of the First Schedule to the Central Excise Tariff Act,1985 (1 of 1986)" shall be substituted.

(G. D. Lohani)

Under Secretary to the Government of India

F. No.354/13/2001-TRU

Note:- (1) The principal notification No. 32/99-Central Excise, dated the 8^th July, 1999 was published in the Gazette of India, Extraordinary vide G.S.R. 508(E), dated the 8^th July, 1999 and was last amended by notification No. 53/2000-Central Excise, dated the 9th November, 2000 [G.S.R. 855 (E), dated the 9th November, 2000].

(2) The principal notification No. 33/99-Central Excise, dated the 8^th July, 1999 was published in the Gazette of India, Extraordinary vide G.S.R. 509(E), dated the 8^th July, 1999 and was last amended by notification No. 3/2000-Central Excise, dated the 9th February, 2000[G.S.R. 100 (E), dated the 9th February, 2000].