IMPORTANT POINT
Butyl Acrylate Monomer is an adhesive.

JUDGMENT

Dr. Mukundakam Sharma, J. —

1. These appeals are directed against the judgment and order dated 17.02.2002 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, Eastern Bench, Kolkata in appeal Nos. CRV-75 and 74 of 1999, whereby the Tribunal had allowed the appeal of the Respondents and set aside the order passed by the Commissioner of Customs on the ground that the Butyl Acrylate Monomer i.e. the chemical imported by the Respondents can safely be held to be an adhesive and was covered by the advance licences produces by the Respondents.

2. As per the facts on record the Respondents, M/s. Sanghvi Overseas imported 14 consignments of Butyl Acrylate Monomer (hereinafter referred to as ‘BAM’) between April and December, 1997 and cleared the same against advanced licenses by availing the benefit of customs Notification Nos. 203/92 and 79/95, without payment of duty. Another consignment of BAM was cleared by the Respondents under bill of entry dated 06.03.1998 and thereafter one more consignment was imported. The last two consignments were warehoused and not cleared by the authorities.

3. In all these consignments of BAM, the Respondents declared the product as Butyl Acrylate Monomer and claimed the classification under heading 2916.12. The assessments were sought by the Respondents as adhesives under the DEEC license.

4. Enquiries were initiated by the Revenue against the Respondents on the belief that the product imported by the Respondents was defined organic chemical and was not an adhesive. The Revenue/appellant took a stand that the advanced licences covering imports of adhesives submitted by the Respondents for clearance of the consignments under DEEC scheme, availing the benefit of customs notification were not applicable in the matter of clearance of the goods in question inasmuch as the said licences were for import of adhesives and the product imported was not adhesive. Accordingly, searches were conducted in the offices of the Respondents and their statements were recorded. The customs clearing agent was also interrogated and efforts were made to find out as to whether the product in question was used as a bonding agent or not. Shri R.K. Jain, in his statement, recorded during such investigations, deposed that the product was used as a bonding agent and on polymerisation the same become an adhesive.

5. The Revenue also drew the samples and sent it for testing. The Revenue also sought the opinion of the various experts as also the persons of the trade dealing in identical items. On the basis of the material collected during the investigation the Revenue formed an opinion that the BAM was not adhesive but was one of the raw materials for adhesive formations. As such Revenue was of the opinion that the exemption had been wrongly claimed by the Respondents. In addition, the Revenue also disputed the value of the goods in question.

6. Accordingly, on the above basis the Respondents were served with a show cause notice proposing confirmation of demand of duty, as also confiscation of the imported product and imposition of personal penalties upon the various persons.

7. During the adjudication proceedings the Respondents took a specific stand that the BAM in question is a liquid which becomes adhesive on polymerisation upon coming into contact with light and heat. It was argued on behalf of the Respondents that to prevent spontaneous polymerisation BAM is normally stabilised by some inhibitor and that since BAM polymerises readily without much requirement of processing and as after polymerisation the same shows adhesive properties it should be treated as adhesive only. They also placed reliance on the manufacturer’s printed literature and contended that it is clear that BAM is used as an adhesive. The Respondents clarified that BAM does not possess any adhesive properties in the Monomer form, but the same is an adhesive in the polymer form, which process is undertaken naturally when the Monomer form