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2023 (10) TMI 801 - CESTAT AHMEDABADClassification of goods - ARH-C Crude Oil (Residue Oil obtained from distillation of Water in the Raw material Comingled Crude Oil purchased by the Appellant) - to be classified under heading CETH 27090000 or under CETH 27101990? - HELD THAT:- The product ARH C Oil obtained from similar processing (Decantation & Dehydration/Distillation) by the Appellant from the bottom residue of 3 to 5% of their raw material comingled or condensate crude oil is not any new product identically, but crude oil only which merits classification under CETA Ch 27090000. At this stage the Test reports and the Explanatory notes (HSN) to CETA 27 are noted. It is found that the 1st test report issued by the Regional Laboratory of Central Excise & Customs, Vadodara dated 3-10-2006 as issued by Chemical Examiner Mr G P Sharma reports that “the sample is in the form of free flowing liquid. It is a mixture of mineral hydrocarbon oil, having flash point below 25 Degree Centigrade. It is obtained from bitumen mineral crude.” Thereafter the test report obtained by the DGCEI on their simultaneous investigation dated 28-9-2007 issued by the same laboratory but through its Senior Chemical Examiner (Grade I) Dr T A Sreenivasa Rao states that “the sample is in the form of dark coloured free flowing liquid. It is composed of crude mineral hydrocarbon oil.” - both the test reports obtained by the DGCEI as compared by them categorized the product ARH C Oil in the category of crude oil. We therefore find that the DGCEI in their file noting found the product to be composed of crude mineral hydrocarbon oil. Accordingly all the above 3 test reports i.e. 2 from the Central Excise Laboratory Vadodara and 1 from Caleb Brett found the samples to be clearly of Crude oil and not other petroleum product. On detailed analysis, it is found that not only the explanatory note to Ch 2709 covers the appellant’s residue bottom oil to be same as crude oil but the Note to Ch 2710 only covers within its ambit products and preparations which by weight have more than 70 % of petroleum oil or oils from bituminous minerals. And in fact there is a clear exclusion to products below 70% of such weight content. The product ARH C Oil (Residue bottom Oil) obtained by such processing of the comingled/condensate crude oil is nothing but Crude oil itself and not any new product which accordingly merits classification under Chapter 27090000 as classified by the Appellant and not under Chapter 27101990 as done by the Revenue. The impugned order set aside - Appeal allowed.
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