Sanceler EM-2′, a rubber accelerator classifiable under HS Code 3812 1000: CAAR

JMF Performance Materials Private Limited (CAAR Mumbai)

JMF Performance Materials Private Limited sought an advance ruling from the Customs Authority for Advance Rulings (CAAR), Mumbai, on the classification of their product, ‘Sanceler EM-2’, a prepared rubber accelerator. The product, imported from Sanshin Chemical Industry Co. Ltd., Japan, contains a mixture of accelerators including MBTS, ZEPC, TMTD, CMBT, ZMBT, and polybutene, used to enhance the vulcanization of rubber. The applicant argued that ‘Sanceler EM-2’ should be classified under HS Code 3812 1000, which covers “Prepared Rubber Accelerators,” rather than the alternative HS Code 3808 9230, which pertains to thiram, a different chemical compound. CAAR Mumbai’s decision, following a personal hearing where no departmental representation was provided, supported the applicant’s classification, affirming that the product’s composition aligns with the specific description of prepared rubber accelerators in HS Code 3812. This ruling emphasizes the application of the General Rules of Interpretation (GRI) under the Customs Tariff Act, 1975, to ensure accurate classification based on the product’s specific use and components.

FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI

M/s. JMF Performance Materials Private Limited (having IBC No. 0505091658 and hereinafter referred to as ‘the applicant’, in short) filed an application (CAAR-1) for advance ruling before the Customs Authority for Advance Rulings, Mumbai (CAAR in short). The said application was received in the secretariat of the CAAR, Mumbai on 05.06.2024 along with enclosures in terms of Section 28H (1) of the Customs Act, 1962 (hereinafter referred to as the ‘Act’ also). The applicant is seeking advance ruling on ^–the issue of classification of “Sanceler EM-2” for imports through the port of Nhava Sheva.

2. Applicant has submitted as follows with the CAAR- I application:

2.1 Applicant intends to import `Sanceler EM-2′ (Prepared Rubber Accelerators) which is mixture, manufactured by trademark holder Sanshin Chemical Industry Co. Ltd., Japan. It has been described in the category “Vulcanization Accelerator for rubber (Blended Accelerator)” by the suppliers. The product is composed of the following ingredients and does not have any other components:

Accelerator converts sulphur into a compound that reacts more rapidly with rubber than does sulphur itself or the Accelerator reacts first with rubber changing it into a’ form that combines rapidly with sulphur.

2.2 The Customs tariff code 3812 1000 covers “Prepared Rubber Accelerators”. The products “Sanceler EM-2” manufactured by trademark holder Sanshin Chemical Industry Co. Ltd, Japan has been described in the category “Vulcanization Accelerator for rubber (Blended Accelerator)” by the suppliers..

The Brussels tariff nomenclature. define (A) prepared rubber accelerators.

A) Products which are added to rubber prior to vulcanization to give the vulcanized articles better physical properties and reduce the time and temperature required for the vulcanizing process. They sometimes also serve as plasticizers. This heading covers only such products which are mixtures.

B) These preparations are generally based on organic products (Thiuram Sulphides, Dithiocarbamates, Mercaptobenzothiazole etc.) combined with inorganic activator.

C) The accelerator converts the sulfur into a compound that reacts more rapidly with rubber than does sulfur itself, or that the accelerator reacts first with rubber changing it into a form. that combines rapidly with sulfur.

D) Sanceler EM-2^,is a mixture-(As mentioned in the literature)

i) MBTS — Dibenzothiazyl disulfide

ii) ZEPC- Zinc Ethylphenyldithiocarbonate

iii) TMTD- Tetramethylthiuram disulfide

iv) CMBT- Cyclohexylamine salt of 2 mercapto benzothiazole

v) ZMBT- Zinc Salt of 2- Mercaptobenzothiazole

vi) Polybutene.

MBTS, TMTD, CMBT and ZMBT have been specifically mentioned in the Explanatory Notes of Brussels tariff nomenclatures as forming the basis for preparation of rubber accelerators under 3812 1000.

E) Chapter 3808 9230 covers thiram (TETRA METHYL THIURAM DISULPHIDE), is an oxidized dinier of Dimethyl Dithicarbonate and Thiuram Disulphide, used to prevent fungal disease in seed and crops, C6HI2N254.

F) Both Sanceler EM2 and Thiram are thiuram disulphide based compounds, however the end products are entirely different and one cannot be substituted for the other, thus, both require to be classified separately as per their utility to the industries they cater to. However, Customs often classify thethe goods under 3808 9230 leading to wrong classification.

G) As per the general rule of interpretation 3 (a) “The heading which provides the most specific description shall be preferred to headings providing^.a more general description”

Since Prepared Rubber Accelerators have been specifically listed under Chapter 3812 1000 and gives them their essential charactei’, it needs to be classified as such. For ease of reference, the relevant portions of CTH 3812 1000^. and 3812 3920 were reproduced by the applicant with the CAAR-1 application.

3. A personal ‘hearing in the matter was conducted on 29.07.2024 in the office of CAAR, Mumbai. During the personal hearing the authorised representatives of M/s JMF Performance Materials Private Limited, Shri. Rajesh Gosalia and Shri. Anil Bhuwalka reiterated the submissions made in the application and contended that the subject goods `Sanceler EM-2’ is prepared rubber accelerators used in the rubber industry as vulcanisation etc. and merit classification under CTI-3812 1000. The subject goods dominantly is a mixture of MBTS, ZEPC, TMTD, CMBT, ZMBT, and Polybutene. They submitted that the department’s contention is that due to the presence of TM’FD it should fall under CTI-I 3808. They submitted that as per literature provided by the supplier the HSN Ekplanatory note (A) to the chapter heading 3812 prepared rubber accelerators may clearly fall under CTH 3812 more particularly under CT1 3812 1000. Nobody appeared for personal hearing from the department side.

4. In terms of provisions of the Section 28-1 (1) of the Customs Act, 1962 read with Sub-Regulation no. (7) of the Regulation no. 8 of the Customs Authority for Advance -Rulings Regulations, 2021, on the receipt of the said application, office of the CAAR, Mumbai forwarded copy of the said application/submissions to the concerned Jurisdictional Customs Commissionerate i.e. Nhava Sheva-I stated by the applicant at Sr. No. 13 of the CAAR-I form (Application form for advance rulings) calling upon them to furnish the relevant records with comments, if any, in respect of said application, however, office of the CHAR. Mumbai has not received any. comments/records from there till date.

5. I have taken into consideration all the materials placed on record in respect of the subject goods including the submissions made by the applicant during the course of personal hearing. I therefore proceed to decide the present applications regarding classification of the subject goods i.e. “Sanceler EM-2” on the basis of the information on record as well as the existing legal framework having bearing on the classification of the product in question under the first schedule of the Customs Tariff Act, 1975.

6. From the submissions of the application it is observed that the goods in question is a mixture of the six components in the proportion as described in the table in para 2.1 (supra). Out of these six components, only one component constitutes 5% of the final mixture and rest all the five components constitute each 19% of the mixture. From this submission; it can be seen that no component dominates over other components in quantity.

7. The classification of the goods under the Customs Tariff is governed by the principles as enumerated in the General Rules of Interpretation (`GRI’) set out in the First Schedule to the Customs Tariff Act, 1975 (`Tariff). Relevant portion of the GRI is reproduced as under with emphasis for ready reference:

Rule 2 (b) of the GRI:

“Any reference in a heading to a material or substance shall be taken to inclUde a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of,such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3″.

Rule 3 of the GRI:

3. When by application of rule 2(b) or for any other reason, goods are, prima facie., classifiable under two or more headings, classification shall be effected as follows:

(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.

(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable.

(c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.

7.1 From the above, it is amply clear that the Rule 2(b) of the GIR directs that the classification of goods consisting of more than one material or substance shall be according to the principles of rule 3. Here, in the case at hand, the product in question is a mixture of the six components, so, as per Rule 2(b) of the GIR, classification of the product in question shall be according to the principles of Rule 3 of the GIR.

7.2 Sub-rule (a) of the Rule 3 directs that the heading which provides the most specific description shall be preferred to headings providing a more general description. In this regard, on going through the first schedule of the Customs Tariff Act, 1975, it is observed that a specific entry i.e. 3 812 10 00 is provided in the said schedule for the classification of the product in question. CTI 3 812 10 00 specifically cover “Prepared Rubber Accelerators”.

8. Relevant portion of the heading 3 812 is reproduced as under for ready reference:

Heading 3 812 covers “PREPARED RUBBER ACCELERATORS; COMPOUND PLASTICISERS FOR RUBBER OR PLASTICS, NOT ELSEWHERE SPECIFIED OR INCLUDED; ANTI- OXIDISING PREPARATIONS AND OTHER COMPOUND STABILISERS FOR RUBBER OR PLASTICS”. Further, under this heading, CTI 3 812 1000 specifically covers “Prepared Rubber Accelerators”.

9. The Customs^. Tariff is aligned, up to the 6-digit level, with the Harmonized System of Nomenclature (`HSN’) issued by the World Customs Organization (`WC0′). The HSN Explanatory Notes released by the ‘WCO aid in the interpretation of the Headings of the Tariff and may be used as a safe guide for the same. It has been held so by the Supreme Court in the case of Collector of Customs, Bombay v. Business Forms Ltd. Thr. 0.L., 2002 (142) E.L.T. 18 (S.C.).

Explanatory notes to heading 3812 explains that the “Prepared Rubber accelerators cover products which are added to rubber prior to vulcanisation to give the vulcanised articles better physical properties and reduce the time and temperature required for the vulcanising process. They sometimes also serve as Plasticisers. This heading covers only such products which are mixtures.

These preparations are generally based on organic products (diphenylg^–uanidine, dithiocarbamates, thiuram sulphides, hexamethylenetetramine, mercaptobenzothiazole, etc.) often combined with inorganic activators (zinc oxide, magnesium oxide, lead oxide, etc.)”

This explanatory note also explains that “for the purpose of this heading, the terms “compound”, “prepared” and “preparation” include deliberate mixtures and blends”.

10. On going through the submissions of the applicant, it is observed that the supplier of the said product M/s. Sanshin Chemical Industry Co., LTD. has specified the product category as “Vulcanization accelerators for rubber (Blended accelerators)” in the certificate of the chemical composition of the said product.

Further, from the literature available on open sources, it is observed that in the rubber vulcanization process, accelerators can work both individually and in combination, depending on the desired properties and performance requirements of the final rubber product. Some rubber formulations use a single type of accelerator to achieve the desired vulcanization characteristics.

Combining accelerators such as MBTS (Benzothiazyl Disulfide), ZEPC (Zinc Ethylene Phenyl Dithiocarbamate), TMTD (Tetramethylthiuram Disulfide), CMBT (Carbamoyl-Mercaptobenzothiazole), ZMBT (Zinc Mercaptobenzothiazole), and additives like polybutene can be used to tailor the vulcanization process and the properties of the final rubber product. MBTS is a secondary accelerator with moderate curing speed and good scorch safety. It is often used to complement primary accelerators and improve the overall efficiency of the vulcanization process and provides balanced acceleration and improves the stability of the rubber compound during processing. ZEPC is a dithiocarbamate accelerator known for its fast vulcanization properties. It is often used as a primary accelerator or in combination with other accelerators to achieve a quick cure. It enhances the cure rate and can help in achieving desired properties faster. It is also used to improve the processability of the rubber. TMTD is an ultra-accelerator that provides very fast curing. It is typically used in conjunction with primary accelerators to speed up the vulcanization process. It reduces the overall curing time significantly and helps achieve high-performance properties in the final rubber product. CMBT is a specialized accelerator that combines features of mercaptobenzothiazole with a carbamoyl group. It is used to enhance the performance of other accelerators and provide specific curing characteristics. It provides additional cross-linking and can improve the stability and mechanical properties of the rubber. ZMBT is a zinc salt of mercaptobenzothiazole and acts as a secondary accelerator. It is used to improve the efficiency of vulcanization and enhance the properties of the rubber. It works well with other accelerators to improve the overall cure rate and rubber quality. Polybutene is a polymer used as a processing aid and plasticizer in rubber formulations. It can improve the workability and processability of the rubber compound. It acts as a plasticizer to enhance flexibility and processability. It can also influence the final properties of the rubber by modifying its viscosity and flow characteristics during processing. Polybutene functions as a binder that hold together the ingredients.

Combining accelerators like TMTD (for fast curing) with MBTS and ZEPC can achieve a very rapid vulcanization process. This allows for faster production cycles and improved processing efficiency. MBTS and CMBT provide good scorch safety, helping to prevent premature curing during processing. This is crucial for maintaining control over the vulcanization process and preventing defects. The combination of different accelerators allows for precise control over the rubber’s final properties, such as tensile strength, elasticity, and heat resistance. Each accelerator contributes unique characteristics to the cure profile. Polybutene improves the flow and workability of the rubber compound, making it easier to process and mold. This can be particularly beneficial in applications requiring intricate shapes or high precision. The interaction between different accelerators can produce synergistic effects, enhancing the overall performance of the rubber. For example, using ZEPC and ZMBT together can improve both the cure rate and the properties of the final product. The exact proportions and combinations of these accelerators and additives need to be carefully balanced to achieve the desired vulcanization characteristics and rubber properties. This often involves experimentation and optimization based on specific requirements. Some accelerators may interact in ways that affect the stability or effectiveness of the formulation.

The applicant has during the course of Personal Hearing contended that the department’s contention is that, due to presence of TMTD in it, the subject product as a whole should fall under CTH 3808 (INSECTICIDES, RODENTICIDES, FUNGICIDES, HERBICIDES, ANTI-SPROUTING PRODUCTS AND PLANT-GROWTH REGULATORS, DISINFECTANTS AND SIMILAR PRODUCTS, PUT UP IN FORMS OR PACKINGS FOR RETAIL SALE OR AS PREPARATIONS OR ARTICLES).

It is observed from the literature available in open sources that the TMTD can also be used as the super/ultra-vulcanisation accelerator either alone or with other accelerators. Here I further observe that, it is not the case that the subject product contains only TMTD, rather, it contains total six ingredients in a specific proportion and TMTD constitutes only 19%, whereas, the proportion of MBTS, ZEPC, CMBT, ZMBT is 19% each and the Polybutene which is used as a binder constitutes 5% in the subject product.

I find that MBTS, ZEPC, TMTD, CMBT, ZMBT themselves are vulcanisation accelerators in nature individually and also putting together these can be highly effective in customizing the vulcanization process and the properties of the rubber. Each component contributes unique benefits, and their interactions can lead to optimized performance in the final rubber product.

11. The Hon’ble Supreme Court in the case of Collector of Customs Vs. Kumudam Publications [1997 (96) ELT 226 (SC)] has held that “it is not entirely correct to say that the end use or function of the goods is irrelevant to decide the question of classification”. A three Judge Bench of the Hon’ble Supreme Court had also relied upon the function and end use in determining the classification in Indian Tool Manufactures Vs. Asst. Collector of Central Excise, Nasik & Others reported in 1994 (74) ELT 12 (SC).

The Hon’ble Supreme Court in the case of Commissioner of Central Excise Vs. Wockhardt Life Sciences Ltd reported in 2012 (277) ELT 299 (SC) had held that the functional utility and predominant usage of the commodity must be -taken into account apart from the understanding in common parlance to determine the correct classification of the product. –

12. On the basis of foregoing discussions and findings, I am of the view that the subject goods i.e. “Sanceler EM-2 (a mixture of the components as described in para 2.1 supra)” merit classification under Custom Tariff Heading 3812, more specifically under CTI 3812 1000 as “Prepared Rubber Accelerators” of Chapter 38 of the First Schedule to the Customs Tariff Act, 1975.

13. I rule accordingly.