TMI Blog2009 (6) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... under Chapter 29 of the Customs Tariff Act 1962 and not under Chapter 27 of the Customs Tariff Act. Consequently all the benefits will be available to the assessees herein and the appeals are disposed of with these findings. In the end all the appeals filed by the assessees are allowed and the appeals filed by revenue are rejected. - C/228, 190-191/2005 and 58-71/2006 - 764-780/2009 - Dated:- 19-6-2009 - S/Shri T.K. Jayaraman, Member (T) and M.V. Ravindran, Member (J) Ms. Sudha Koka, SDR, for the Appellant. Shri G. Shivadas, Advocate, for the Respondent. [Order per: M.V. Ravindran, Member (J)]. - All these appeals are directed against OIO No. 1/2005, dated 25-2-2005. Since there are 17 appeals we would like to identify the appeals in a chart form which is as under:- Sl. No. Appeal No. Appellant Respondent 1. C/228/2005 Unimers India Ltd. CC, Mangalore 2. C/190/2005 Pure Chemicals Ltd. -do- 3. C/191/2005 Shasun Chemicals Drugs Ltd. -do- 4. C/58/2006 CC, Mangalore M/s. Pure Chemicals Co. 5. C/59/2006 -do- M/s. Shasun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Branch Office at Shop No. 3, Ground Floor, ABCO Trade Centre, Kottara Chowki, Mangalore-575006 and they are engaged in the import and trading of various chemicals and solvents. Mr. M. Ponnusami is the proprietor of M/s. Pure Chemicals Co., and his office is situated at No. 32, 'H' Block, 15 Main Road, Anna Nagar, Chennai-40. The Import-Export Code No. of M/s. Pure Chemicals Co. is 0495015890. 4. During the course of enquiry, M/s. Pure Chemicals Co., Mangalore vide letter dated 5-1-2004 furnished the following documents/records/files related to the imports of "Exxsol Hexane RD" (a) Copies of Bills of Entry, High Sea Sales Agreements, Bond-to-Bond Transfer Agreements, Bills of Lading, Commercial Invoices, Debit Notes etc. pertaining to imports per vessel MT CHEMSTAR EAGLE, MT JIPRO DREAM, MT SHINTOKU, MT BOTANY TRITON, MT BUNGA MELAWIS SATU; (b) Sales Specifications, Material Safety Data Sheet and Certificate of Quality of the product 'Exxsol Hexane RD'. 5. Scrutiny of these documents revealed that M/s. Pure Chemicals Co., Mangalore imported six consignments of Exxsol Hexane RD through New Mangalore Port during the period May 2002 to December 2003. All the six consignments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured by fractional distillation of naphtha fraction, which in turn is obtained by fractional distillation of crude oil, but the straight run fractions as such do not meet revised BIS specifications (IS: 3470). For meeting these specifications subsequent treatment like solvent extraction or hydrogenation is required. (d) Is there any process other than fractional distillation of petroleum/crude oil by which "Hexane" can be manufactured? "Hexane fraction" can also be manufactured from Natural Gas Condensate. However, this will also need the processing steps as mentioned above. (e) What is percentage of "Hexane" in these types of products? Whether it is pure hexane? Hexane fraction (63-70°C cut) is not pure hexane. However, this cut typically contains n-Hexane about 50-55%. The rest of the components are isomers of hexane, small quantities of C5-C.. saturates and benzene. (f) Is there any difference between "Hexana" and n-Hexane? Here "Hexane" means the "Hexane fraction". While n-Hexane is a pure component. As mentioned above 'n-Hexane' is predominant component in the "Hexane fraction". The above information provided by us is based on our knowledge/literatu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Chapter 27 instead of Chapter 29. The main contention of the assessee before the adjudicating authority was that the product imported by them was used by them as a solvent in vegetable oil extraction and in bulk drugs, polymers and plastics. It was also submission before the adjudicating authority that the said product is not used by them as light oil or a preparation or a motor spirit. The learned adjudicating authority after considering the submissions made by the assessees before him came to the conclusion that imported product would merit classification under Chapter 27101112 and finalized the provisional assessments and differential duty was demanded against the assessee and few proceedings were dropped. 3. As regards the demand of differential duty of CVD on the other assessees, learned counsel appearing on behalf of the appellant assessees in these cases submits that- (1) The main issue in this case for consideration is a whether the goods imported by the appellants were required to be imported with the licence or through a cannalising agency. It is his submission that if the product imported by them i.e. 'Exssol Hexane RD' is to be considered as a product falling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Spinners (I) Ltd. - 2007 (209) E.L.T. 43 (Tri.-Bang.). (3) It is also his submission that imported Hexane is classifiable under Chapter 29 based upon the nature of the bonding of the product. It is his submission that hexane is a fully saturated hydro carbon consisting of separately chemically defined compounds as per the chart below: Composition in Exxsol Hexane RD Description Wt% Isopentane 0.01 n-pentane 0.02 2, 2 di-Me-butane 0.30. Cyclopentane 0.52 2, 3, di-Me-butane 3.69 2-Me-pentane 25.94 3-Me-pentane 20.11 n-hexane 38.63 Me-cyclo-pentane 7.89 2, 4, di-Me-pentane 0.25 2, 2, 3-tri-Me-butane 0.01 Cyclohexane 2.63 He would also draw our attention to the report of the Chennai Petroleum Corporation Ltd., (CRCL) which is as under: Composition in Exxsol Hexane RD Description Wt% 2, 2-Dimethylbutane 0.372 2-Methylpentane 25.31 3-Methylpentane 20.312 2, 2-Dimethylpentane 0.092 2, 4-Dimethylpentan 0.133 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. She would exhort us to go through the contents of the test reports as given by CRCL and Indian Institute of Petroleum, in view of these submissions, the impugned order is correct and the order to the extent it classifies the product under chapter heading 211112 is liable to be set aside and the classification has to be made under Chapter heading 2710112. 5. We have considered the submissions made at length by both sides and perused the records. 6. The issue involved in this case is regarding the classification of the product 'Exxsol Hexane RD'. It is the contention of the revenue that the said product will merit classification under Chapter 27 of the CETA while the assessees contend that the said product will merit classification under Chapter 29 of ITC-HS classification of Export Import items 2002-2007. The learned adjudicating authority has relied upon the various test reports given by CRCL and Indian Institute of Petroleum to come to the conclusion that the product imported has a Special Boiling Point Spirits with nominal boiling point range of 63-70°C. It is his finding that the such a boiling point of the product will be of the product which will fall under Chapter 27 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Products Ltd, Cochin 4. Plant Lipids, Cochin 5. Sami Labs Ltd., Bangalore 6. Ranbaxy Laboratories Ltd., Haryana 7. Herdillia Unimers Ltd., Mumbai Etc., and all of them are manufacturers and Exporters of bulk and basic drug [generally classified active Pharmaceutical Ingradients. - API] Our members to our notice that they face hardships while importing Hexane due to certain ambiguity in classification. Hexane has specific heading in Chapter 29.01.10.00 [as per HSN]. The import policy for this heading is free and can be imported as OGL, under this heading and ports like Haldia, Mangalore, Chennai had been following this clearing the goods under OGL. There is also another practice followed by other port like Kandla where Hexane is classified under a vague heading as light oils under Chapter 27.10 but still under OGL, but special Excise duty levied which is claimed by our members as Cenvat credit. Though classifying under 27.10 is not acceptable to the imports are happening at Kandla with pending disputes. But now few of our members in certain ports have started facing problems as it is interpreted that Hexane is not covered under OGL, but it is a canalized item throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... G BHAVAN, NEW DELHI- 110011 POLICY CIRCULAR No. 40 (RE-2003)/2002-2007 New Delhi, Dated: 14-7-2004 To All Licensing Authorities All Commissioners of Customs, Subject: Clarifications regarding import of Hexane covered under Chapter 29 of ITC (HS) Classifications of Export and Import Items, 2002-2007. Representations have been received regarding clarification for classification of Hexane in the ITC(HS) Classification of Export and Import Items, 2002-07. The issue has been examined in consultation with the Department of Chemicals and Petrochemicals, Ministry of Chemicals and Fertilizers. It is hereby clarified that the import of Hexane is covered in Chapter 29 of ITC(HS) Classifications of Export and Import Items, 2002-07. This issues with approval of Director General of Foreign Trade. (Pratima Dikshit) Joint Director General of Foreign Trade [Issued from file no. M-5995 5996/AM04/PC-IA] 9. It can be seen from the above reproduced Policy Circular of the DGFT that DGFT has clearly held that the product is covered under Chapter 29 and that also after consultation with department of Chemicals Fertilizers, Ministry of Chemical and Fertilizers. Such a policy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or doubt arises in respect of interpretation of any provisions or regarding classification of any item that doubt shall be referred to DGFT and his decision therein shall be final and binding. We have already reproduced the decision of the DGFT on a representation made by the Chemical Industries Association herein above. This would indicate clearly that the product imported by assessee i.e. "Exxsol Hexane RD" would fall under Chapter 29. 12. As regards the authority of the DGFT to interpret the policy of the binding nature of the same, the Hon'ble Supreme Court in the recent case of Atul Commodities v. CCE, Cochin as reported at [2009 (235) E.L.T. 385 (S.C.)] at paragraph 17 has settled the law. We may read the said portion of paragraph Para 17: "In para 2.3 of the FTP, DGFT is empowered to interpret the policy if any doubt or question arises in respect of interpretation of any provision in FTP or in the matter of classification of any item in the ITC(HS) or in the hand book, such question or doubt shall be referred to the DGFT whose decision therein shall be final and binding". 13. The above ratio of the Hon'ble Supreme Court will fortify our view that once DGFT gives cla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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