Home Case Index All Cases Customs Customs + AT Customs - 2013 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (3) TMI 240 - AT - CustomsClassification - Exxsol Hexane RD and Hydrosol n-hexane - classification under Chapter 29 or classification under Chapter 27 - held that:- According to general explanatory notes in the rules for interpretation of the schedule, when the description of an article or group of articles is preceded by or , the said article are group of articles shall be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has or . In this case in Chapter 27, the heading motor spirit is preceded by _ _ _ the special boiling sprits under three sub-heading are preceded by . This would clearly show that the special boiling spirits cannot be considered as part of the main heading motor spirit but they have to be grouped under light oils and preparations which is preceded by . Since special boiling spirits are not sub-headings of the heading motor spirit in the present tariff, the claim of the appellant is that Revenue has to establish that the product is suitable for use in spark ignition engine in admixture with other products cannot be sustained and the decisions cited by the learned counsel also are of no help to the appellants. However, we cannot straightway classify the product as a special boiling spirit without rejecting or considering the competing heading under Chapter 29. The very fact that no purity has been prescribed for n-Hexane or Hexane and the definition of impurities given in the HSN and the fact that there can be two terms namely pure and commercially pure would, in our opinion, support the appellants case. The technical expert has also stated that improving the purity by decreasing the range of boiling points would involve abnormal conversion cost and render the product commercially unviable. This has not been challenged or proved otherwise. Therefore the submission of the appellants on the basis of suppliers letters and technical expert opinion and the terminology used for pure and commercially pure to say that the product imported by them even if it contains only 40% or more of Hexane would still be classifiable as Hexane since the impurities or other products found in the product are covered by the definition of impurities, would come under Chapter 29 appear sustainable. As already stated, the mixtures are not ruled out from Note 1(a). Even the Central Board of Excise and Customs as submitted by the appellants had clarified that while classifying a product under Chapter 29, Rule 3(b) of Interpretation Rules has to be applied. The product is called Hexane. Further 88.7% of the total content consists of n-Hexane and its isomers. There is no evidence to show that the product is not a mixture of different components. In this case from the evidences on records and reports available and the opinion of technical expert and literature, it emerges that the essential character of the product is derived from Hexane. In the explanatory notes to Chapter 29.01 of HSN, at (A) it is specifically stated that saturated acyclic hydrocarbons of the heading include Hexanes, with six atoms of carbon. The use of word Hexanes and not Hexane supports the case of appellants and if we take the heading as hexanes, hexanes percentage in the product is more than 88%. This would satisfy the predominance test also. - Decided in favor of assessee. Regarding penalty - held that:- it would not be appropriate to sustain imposition of penalty since the issue is one of interpretation of different tariff headings, the application of Interpretative Rules, technical literature, etc., and two views are possible. In such a situation, imposition of penalty on the appellants is not correct. - appeal allowed with consequential relief to the appellants.
|