TMI Blog2016 (9) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... d submissions of both the sides, we find that the item is being used as a fuel but its mere use as fuel, when the parameters of the definition given in supplementary Note (g) to Chapter 27 are not fulfilled, cannot support the stand of the Revenue. Therefore, we are of the considered view that item cannot be held to be classified under Chapter sub-heading 27101950 of the Central Excise Tariff. Further, when the subject item is not fuel oil as per the definition given in note (g) to Chapter 27 and when it is neither Base oil/ nor jute batching oil and textile oil, nor lubricating oil, it may be in the other category, for which detailed classification is 27101990 or it may be further in the category of waste oil. However, from the facts on record, we refuse to confirm its classification under the category 27101990 or as waste oil also unless there is sufficient material and further both the sides are given opportunity to give their submissions on the said classifications. In the case record, there is no reference to any other classification, other than Chapter Heading 27101950 and 2709 0000. Revenue has failed to substantiate its stand for classification of the subject item in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty since no manufacturing process took place. (ii) By distillation of commingled oil they obtain various products such as (i) Organic Composite Ligorin (ii) Residual Crude Petroleum Oil/ Residue of Waste Oil. (iii) By distillation the top lighter fraction i.e. Lingorin was removed, such removing of top lighter fraction from crude by undertaking only condensation does not bring any change of chemical composition in crude oil. It remains as such. Heating and condensating is only a physical process. Since after removal of Lingorin, the Crude Oil has remained as such and therefore, it cannot be said that the manufacturing took place. (iv) The contention of the Revenue that the residual Crude Oil is classifiable under Chapter Heading 27.10 as Topped crude i.e. fuel oil is wrong. (v) As per the definition of Petroleum crude oil in Standard Technical Hand Books i.e. Mc.Graw Hills Technical Encyclopedia, Hawley s Condensed Chemical Dictionary, the residual oil has all the characteristics of Crude Oil. The report of chemical examiner is only on two parameters out of 18 -20 parameters of Crude Oil. Even the parameters of Chemical Examiner are so close that the Residual oi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic oils, used as transformer oils, etc. are classified as waste oils. * Buyers of the subject item are using it as fuel oil in the boilers, furnace of ceramic industries and is also used in hot mix plant. 4. In case of these three appellants in addition to the issue of classification, we find that there have been some shortage/ excess of goods namely ligroin and RCPO/ RWO in case of M/s Shrirang Petro Industries; the items namely Parson and Parsol 20 in case of M/s Parth Rasayan Pvt. Ltd.; the items namely Rudosol -1 and mixed fuel oil in case of M/s Rudraksha Petrochem Pvt. Limited. In case of M/s Parth Rasayan Pvt. Limited unaccounted goods valued at ₹ 70,801/- were confiscated and option given to redeem on payment of fine of ₹ 10,000/-. In the case of M/s Rudraksha Petrochem Pvt. Limited on the shortage found, duty of ₹ 5630/- alongwith interest was confirmed and in case of M/s Shrirang Petrochem Industries duty of ₹ 37,659/- alongwith interest on the shortage was confirmed. 5. The main issue here is classification of the goods namely RCPO/ RCBO / RWO. Supplementary Note (g) to the Tariff Heading 27 of Central Excise Tariff defines and gives mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity to give their submissions on the said classifications. In the case record, there is no reference to any other classification, other than Chapter Heading 27101950 and 2709 0000. 5.3 Consequently, Revenue has failed to substantiate its stand for classification of the subject item in Chapter heading 27101950 as fuel oil especially in the face of the definition and meaning given for the item fuel oil in the supplementary note (g) to Chapter 27 as discussed above. In the result, all the demands classifying the item as fuel oil 27101950 are hereby dropped. When the original demands are dropped on this account, the penalties imposed under Section 11AC of Central Excise Act, 1944 and Rule 25 of Central Excise Rules, 2002 are also hereby set-aside. 6. Further, there have not been any substantial pleadings by the three appellants in respect of shortages/ excesses / unaccounted goods. 6.1 In case of M/s Parth Rasayan where unaccounted goods Parsol and Parsol 20 valued at ₹ 70,801/- (value wrongly mentioned in Order-in-Original, when correct value is ₹ 71,801/-) were confiscated under Rule 25 of Central Excise Rules, 2002 with an option to redeem the same on fine of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X
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