In Re : Anabond Ltd.
GST
2018 (9) TMI 691 – AUTHORITY FOR ADVANCE RULINGS, TAMIL NADU – 2018 (16) G. S. T. L. 614 (A. A. R. – GST), [2019] 61 G S.T.R. 58 (AAR)
AUTHORITY FOR ADVANCE RULINGS, TAMIL NADU – AAR
Dated:- 27-6-2018
ORDER NO. 1/ AAR/ 2018
GST
MS. MANASA GANGOTRI, MEMBER AND MR. THIRU S. VIJAYAKUMAR, MEMBER
RULING
1. M/s. Anabond Ltd., Chennai (hereinafter called the applicant or the company) has preferred an application for Advance Rulingon what is the appropriate classification of 'Polysulphide sealants' manufactured by them, under GST.
2. The Applicant is engaged in the manufacturing of engineering adhesives and sealants, paints & other chemical formulations which are used in various industries such as automobile, aerospace, energy, construction, marine, railway etc. Applicant manufactures, among other products, polysulphide sealants and market it under the trade name 'Anabond Tuffseald '.Polysulphide sealants are commonly used for sealing expansion
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sealants. There are five competing headings in which the said product can be covered. They are: Heading 3214; Heading 2830; Heading 3911; Heading 4002; Heading 3506.
3. The applicant has further stated that
* Customs Tariff Heading (hereinafter referred to as CTH) 3214 covers various types of mastics viz., “glaziers' putty, grafting putty, resin cements, caulking compounds and other mastics; painters' fillings; non-refractory surfacing preparations for facades, indoor walls, floors, ceilings or the like. Sealants are also known in the trade by their generic name “mastics”. The product in question is a mastic based on rubber which after the addition of hardener is used as mastics. HSN Explanatory Notes provides that “mastics based on rubber” are covered under CTH 3214.Further, in view of Note 3 to Section VI (under which the heading 3214 falls) the fact that the product in question has two components and these two components have to be mixed before use to prepare the sealant is no b
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duct, Viz., the polysulphide is an organic compound. Though there are some exceptions for organic compounds to be covered under Chapter 28 (for instance, organic or inorganic compounds of precious metals of rare-earth metals, or radio-active elements or of isotopes), the polysulphide rubber compound is not covered by such exceptions. From the HSN Explanatory Notes, it is clear that the type of Polysulphides covered under the heading 2830 are mixtures of inorganic polysulphides of the same metal. The polysulphide in question is an organic compound and is a synthetic rubber. Though there are some exceptions for organic compounds to be covered under Chapter 28, the Polysulphide rubber compound is not covered by such exceptions. Therefore, classification of the product in question under Chapter 28 itself could be ruled out.
* Polysulphide polymers are of two types. The one containing Carbon-Sulphur-Carbon linkage is covered under CTH 3911 while the other containing Sulphur-Sulphur linkag
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is not polysulphide rubber alone but also contains the hardener and is presented together as a set. While the General Rules of Interpretation (GRI) provide means for classification of products presented as sets under Rule 3(b) in terms of GRI I, the application of the Rules could be resorted to only when the Section or Chapter Notes are not of help in classifying the product. Therefore, it would be necessary to look at the relevant Section and Chapter Notes before resorting to the GRIs. In the present case, as discussed above, classification of the product can be done based on the Section, Chapter Notes and Headings and therefore classification under CTH 4002 can be ruled out.
* As the product has bonding property, it is relevant to analyse the appropriateness or otherwise of classification of the product under Heading 3506 which deals with adhesives and glues. Heading 3506 covers, “prepared glues and other prepared adhesives, not elsewhere specified or included; products suitable fo
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Polysulphide Sealant; Technical data sheet; and photographs of the product (in both open and closed state). The details and documents furnished were examined.
5. The product in question, 'Anabond Tuffseald, Polysuphide Sealant'contains two components, viz., polysulphide polymer (resin/rubber) and hardener (acts as the curing agent). Liquid polysulfide polymers form the basic ingredient of the sealant formulation and Manganese dioxide is the curing agent. Both resin and hardener are packed separately within the same container.
Properties of the uncured material are as follows':
Resin
Chemical type
Polysulphide
Appearance
Smooth paste
Colour
Off-white
Hardener
Chemical type
Manganese dioxidebase
Appearance
Smooth paste
Colour
Brown
Mixed adhesive
Mixing ratio
92:08
Colour
Grey
The resin here is a polysuphide where each sulphur atom is bound on both sides by carbon atoms.The synthesis of polysulphide rubber is nNa2S2 +nCl-R-Cl->2nNaCl+- [R-S-S]. After opening the
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First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to their interpretation.
CTH 3214 10 00 covers “glaziers' putty, grafting putty, resin cements, caulking ' compounds and other mastics; painters' fillings”.
As per Explanatory Notes to HSN for CTH 3214, “77k products of this heading are preparations of widely differing composition which are essentially characterised by the uses to which they are put. These preparations are usually put up in a more or less pasty form and in general they harden or cure after application….
The products of this leading are usually applied with a caulking gun, a spatula, a trowel, a plasterer's float or similar tools…..
These preparations are mainly used to stop, seal or caulk cracks and in certain cases to bond or firmly join components together. They are distinguished from other glues and other adliesives by the fa
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presented together; and,
iii. identifiable, whether by their nature or by the relative proportions in which they are present, as being complementary one to another.”
As per Harmonised System of Nomenclature, the general explanation of the above Note 3 is as follows:
“Note 3:
This Note deals with the classification of goods put up in sets consisting of two or more separate constituents, some of which fall in section VI. The Note is, however, limited to sets of which the constituents are intended to be mixed together to obtain a product of Section VI or VII. Such sets are to be classified in the leading appropriate to that product provided that the constituents meet conditions (a) to (c) of the Note”
Applying the above, to the case at hand, it is evident that the base and the curing agent are presented in a single pack and are intended to be used together and complimentary to one another. Thereby, the conditions of the section Note 3 is satisfied. When the conditions are sat
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es products having the character of mastics, fillings, etc., of heading 3214. Therefore the product under consideration is not classifiable under this heading.
c. Chapter 3911 covers polysulphides. As per explanatory notes to HSN, Polysulphides are polymers characterised by the presence of monosulphide linkages in the polymer chain…In polysulphides each sulphur atom is bound on both sides by carbon atoms, as opposed to the thioplasts of Chapter 40, which contain Sulphur-sulphur linkages. In the case at hand, Sulphur-Sulphur linkages are present and therefore they are thioplasts. Hence, the product is not classifiable under this heading.
d. Chapter 4002 covers “synthetic rubber and factice derived from oils, in primary forms or in plates, sheets or strip; mixtures of any product of heading 4001 with any product of this heading, in primary forms or in plates, sheets or strip”. The product in question contains polysulphide rubber/resin which is a synthetic rubber. Therefore, the pol
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