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Central Excise - Classification of 'tar' produced during the course of manufacture of Phenol/Acetone or Beta Napthol - Central Excise - 1/90-CX.3Extract Central Excise - Classification of 'tar' produced during the course of manufacture of Phenol/Acetone or Beta Napthol Circular No. 1/90-CX.3 Dated 11-1-1990 Government of India Central Board of Excise Customs New Delhi Subject : Central Excise - Classification of 'tar' produced during the course of manufacture of Phenol/Acetone or Beta Napthol. 1. A doubt has been expressed as to whether 'tar' produced during the course of manufacture of Phenol/ Acetone is classifiable under Chapter 27 (Heading Nos. 27.06, 27.14 or 27.15) or Chapter 29 (Heading No.29.42) or Chapter 38 (Heading No.38.23) of the Schedule to the Central Excise Tariff Act, 1985. 2. The matter was discussed in the South Zone Tariff Conference of Collectors of Customs Central Excise held at Bangalore on 23rd and 24th May, 1988. It was explained that a unit is manufacturing Phenol (sub-heading No. 2907.10) using Cumene (Isopropyle benzene-sub-heading No. 2902.00) by process of chemical synthesis. Cumene itself is manufactured in the unit using benzene (sub-heading No. 2902.00). During the course of manufacture of Phenol/Acetone (sub-heading No. 2914.10) gets produced as a byproduct after production of phenol/Acetone a residual product termed by the manufacturer as 'tar' is also obtained. The conference was informed that the' tar' so produced is a mixture of hydrocarbons and its components and certain unknown compounds. It cannot be used for any purpose other than fuel. The Conference favoured classification of the subject goods under Heading No. 27.12 of CET but observed that the issue be further examined by the Board, especially if benzene could be called a bituminous mineral. 3. Accordingly, the matter had been got examined in consultation with the Dy. Chief Chemist, CRCL, New Delhi. He expressed the view that the residual product obtained during the course of manufacture of chemicals like Phenol/Acetone from an organic chemicals, cumene, is obviously not obtained during distillation of coal, mineral oils or mineral fuels or lignite covered under Heading No. 27.06. It is also not bitumen or asphalt, natural or bituminous mixtures based on natural asphalt etc. of heading No. 27.14 or 27.15. Further, a residual product of this kind resulting from a chemicals process for the manufacture of phenol/Acetone, though termed as 'tar' seems classifiable only under Heading No. 38.23 CET. 4. However, a similar issue was again discussed in the West Zone Tariff Conference of Collectors of Customs Central Excise held at Nagpur on 16th and 17th November, 1989. It was explained that Betanapthalene Tar is obtained as chemical process residue in the manufacture of betanaphthol from Napthalone which itself is obtained from coal. The Conference was informed that for classification under Heading No. 27.06 the Tar should be distillate from coal but in the instant cases, it was obtained as a chemical process residue and ws also not obtained from coal directly but from Cumene/Napthalone. The Conference agreed that classification of the subject goods i.e. Tar obtained as a chemical process residue, under Heading No. 3823.90 as suggested by Deputy Chief Chemist CRCL, New Delhi appears to be most appropriate. 5. The Board concurs with the above decision of the West Zone Tariff Conference. 6. The above guidelines may be brought to the notice of lower field formations and the trade interestd may also be suitably advised. 7. All pending assessments may be finalised on the above lines.
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