Order

In all these Appeals the questions which arise for consideration are : (1) whether the intermediate product manufactured by Camlin Limited is marketable and (2) if it is marketable then whether the product is to be classified under Chapter Heading 32.04 or 96.09.

2. As regards marketability, the Depart­ment has led evidence to show that one of the competitors of the Appellants i.e. Luxor Pen Co. was purchasing and importing into India a product, which according to the Department, is an identical product to the intermediate product manu­factured by Camlin Limited. If the product which was so purchased and imported by Luxor Pen Co. is an identical product then the Department would have succeeded in showing marketability of this product. There­fore, the main thrust of the argument, on behalf of Camlin Ltd., has been that the product imported by Luxor is not the same product but a completely different product.

3. At this stage it, therefore, becomes necessary to see what is the product of Camlin Ltd. and what was the product imported by Luxor. It is an admitted position that the intermediate product is manufactured by Camlin Ltd. by thoroughly mixing in a jacket of vessel plastic powder, paraffiin wax hard oil, colour pigments and dispersing agents and plasticisers. These are mixed by heating the same and the mixture is then cooled and cut into small irregular shapes. The product of the Respondent which comes into existence is called as “crayplas compound”.

4. What was imported by Luxor Pen Co. is set out in the case of Luxor Pen Company v. Collector of Customs, Calcutta reported in 1994 (70) E.L.T. 294 (Tribunal). It appears that Luxor had imported what they termed as “LDPE Powder”. They tried to clear the same by classifying the powder under Chapter 39. Therefore, chemical tests were carried out on the product imported by Luxor. It was found that what had been imported was a compound consisting of synthetic resin, was, colouring matters and inorganic fillers. The percentage of synthetic resin in Luxor Pen Co.’s case varied from 32.7 to 50%. In Camlin’s case, the percentage of synthetic resin varies from 40 to 45% but on a chemical analysis of the two products, it is to be seen that the products are identical.

5. We are unable to accept the submission of learned Senior Counsel Mr. Dave on behalf of Camlin Ltd. that what Luxor had imported was only LDPE Powder whereas Camlin’s product contained not just plastic resins but also wax colouring material fillers etc. and therefore it was a different product. What had been imported by Luxor Pen Co. was clearly not just synthetic resin but a compound which was identical to that being manufactured by Camlin Ltd. As one of the major manufactur­ers of crayon in this country was importing this material, the Depart­ment had clearly established the marketability of this material. It is settled law that for a good to be marketable it is not necessary that there must be actual instances of sale by the assessee. Marketability is essentially a question of fact to be decided on facts of each case and once it is shown that a product has actually been bought, marketability gets established.

6. The second question is regarding classification. The Department claims that the product has to be classified under Chapter Heading 32.04 which reads as follows :

Heading Sub-heading Description of goods Rate of duty No. No.

32.04 Synthetic organic colouring matter, whether or not chemical­ly defined; preparations based on synthetic organic colouring matter as specified in Note 2 to this Chapter; synthetic organic products of a kind used as fluorescent brightening agents or as luminophores, whether or not chemically defined.

– Pigments and preparations based thereon:

3204.11 – In unformulated or unstandardised or