F. No. 128/7/87-CX.3 Dated 23-6-1987

Classification of Sodium Rosinate/Aluminium Rosinate - Regarding.- A doubt has been raised as to whether Sodium Rosinate/Aluminium Rosinate arising at an intermediate stage in the course of manufacture of paper and paper board should be classifiable as derivatives of Rosin under Chapter 38 or not.

2. The issue was discussed in the North Zone Tariff-cum-General Conference of Collectors of Central Excise held at New Delhi on the 27th and 28th May, 1987. The problem relates to the period of one year from 28-2-1986 to 28-2-1987 i.e. prior to the extension of the MODVAT Scheme to paper and paper board. The Conference observed that both Sodium Rosinate and Aluminium Rosinate are specifically mentioned as derivatives of rosin in the HSN Explanatory Notes below HSN heading No. 38.86 (page 524). Therefore, it was viewed that Sodium Rosinate/Aluminium Rosinate should appropriately be classifiable as derivative of Rosin. Accordingly, the Conference was of the view that the classification of such products under sub-heading No. 3801.19 of the CET, as it existed prior to 10-2-1987, would seem to be appropriate. From 10-2-1987, the Classification of the said product would be under sub-heading No. 3806.90. The Conference further noted that, in terms of Notification No. 225/86-C.E., dated 3-4-1986, there is a set-off of duty paid on rosin used as an input in the manufacture of paper or paper board for payment of duty on paper and paper board. The Deputy Chief Chemist, who was present at the Conference, pointed out that this set-off would be rendered meaningless if resinates at the intermediate stage in the manufacture of paper or paper board are subjected to excise duty. However, he observed that the expression ‘rosin’ may not cover derivatives thereof. The Conference, therefore, felt that since the problem had already been solved w.e.f. 1-3-1987, the past cases may be decided on merits.

3. The Board has accepted the above views of the Conference. Accordingly, it is hereby clarified that sodium rosinate/aluminium rosinate would be appropriately classifiable under sub-heading No. 3801.19 of the Schedule to the CET, Act, 1985 during the period prior to 10-2-1987 and under sub-heading No. 3806.90 of the Schedule to the said Act, 1985 with effect from 10-2-1987.

4. The above position may be brought to the notice of lower field formations and the trade interest may also be suitable informed.

5. All pending assessments may be finalised on the basis of the guidelines given above.