1998 (5) TMI 99 - AT - Central Excise

Summary

Issues Involved:
1. Classification of Sulphonated Castor Oil.
2. Applicability of ISI Specification for classification.
3. Relevance of trade parlance and commercial understanding.
4. Evidentiary value of affidavits and technical literature.
5. Validity of Chief Chemist's report.

Issue-wise Detailed Analysis:

1. Classification of Sulphonated Castor Oil:
The appellants claimed that their product, described as Sulphonated Castor Oil, should be classified under Chapter sub-heading 3402.10. The Department argued that the product was a surface-active agent and should be classified under Chapter sub-heading 3402.90. The Assistant Collector and the Commissioner Appeals upheld the Department's classification.

2. Applicability of ISI Specification for Classification:
The appellant's counsel argued that the ISI Specification No. IS: 1044-1970, which the Chief Chemist used for classification, was withdrawn and thus should not be applicable. The Department countered that the ISI Specification, although recommended for withdrawal, was a reliable scientific standard for determining the nature of the product. The Tribunal noted that ISI Specifications are meant for quality control and may not always be relevant for classification, especially when withdrawn.

3. Relevance of Trade Parlance and Commercial Understanding:
The appellants contended that their product was known and traded in the market as Sulphonated Castor Oil. The Tribunal considered previous rulings, including the Apex Court's decision in CCE, Kanpur v. Krishna Carbon Paper Company, which emphasized the importance of trade meaning in the absence of statutory definitions. The Tribunal found that despite the withdrawal of the ISI Specification, trade parlance and commercial understanding should guide classification.

4. Evidentiary Value of Affidavits and Technical Literature:
An affidavit from a partner of a firm manufacturing Sulphonated Castor Oil was submitted to support the appellant's claim. The Department argued that the affidavit lacked evidentiary value. The Tribunal noted that affidavits alone are insufficient for classification without corroborative evidence. The technical literature reviewed did not provide clear guidance on the water content issue, which was crucial for classification.

5. Validity of Chief Chemist's Report:
The Chief Chemist's report, which found the product to contain 53% water and not conforming to ISI standards, was a significant factor in the Department's classification. The Tribunal noted that the report was not challenged adequately by the appellants, who did not request cross-examination of the Chief Chemist. The Tribunal emphasized the importance of scientific analysis in determining the nature of chemical products.

Separate Judgments:
Majority Opinion:
The majority held that the product should be classified under sub-heading 3402.10, aligning with the trade parlance and commercial understanding. The ISI Specification's withdrawal and the product's market recognition as Sulphonated Castor Oil were key factors.

Dissenting Opinion:
One member disagreed, emphasizing the Chief Chemist's report and the ISI Specification as critical for classification. The dissenting view supported the Department's classification under sub-heading 3402.90.

Final Decision:
The majority view prevailed, and the appeals were allowed, setting aside the impugned orders. The product was classified under sub-heading 3402.10 of the Central Excise Tariff.