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2016 (9) TMI 132 - CESTAT NEW DELHI

2016 (9) TMI 132 - CESTAT NEW DELHI - 2016 (342) E.L.T. 393 (Tri. - Del.) - Classification - Residual Crude Petroleum Oil (RCPO)/ Residual Fuel Oil (RFO) / Residual Bottom Oil (RBO) - Whether it is to be classified as RCPO/ RFO / and RCBO under chapter heading 27101950 as per Revenue or as Petroleum Crude Oil under 27090000 as per appellant - Held that:- Revenue has completely failed to satisfy the definition and meaning given in supplementary note (g) to Chapter 27. The argument of the Revenue .....

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ed order in favour of subject item. After having gone through the facts on record and 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 .....

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e 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 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 deman .....

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f the goods namely, Parsol, Parsol-20 and not the excess, is factually correct. In the SCN, the duty for said goods has also been mentioned as ₹ 11,833/-We find that the order-in-original has treated these goods as excess, which is factually wrong. Consequently, the impugned order in this regard is not sustainable. - Appeals disposed of - Excise Appeal No. 541 of 2009, Excise Appeal No. 82 of 2009, Excise Appeal No. 222 of 2009 - Final Order No. 53092-53094/2016 - Dated:- 19-8-2016 - Dr. S .....

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ndore. 2. The matter here concerns mainly with the classification of the item namely Residual Crude Petroleum Oil (RCPO)/ Residual Fuel Oil (RFO) / Residual Bottom Oil (RBO). The Commissioner through his respective impugned orders-in-original held the classification of the item commonly called RCPO/ RFO / and RCBO under chapter heading 27101950 of the First Schedule to the Central Excise Tariff Act, 1985. Ld. Advocates submitted that the right classification for this item is 27090000 as Petroleu .....

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om 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 .....

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product but a residuary material which is a residue and crude. Such a residuary material cannot be considered as Petroleum Oils other than crude. Hence, its use a fuel cannot be a clinching factory to conclude its classification under the Heading 27.10. Reliance is placed in this context on the judgment of the Hon ble Supreme Court in case of Hindustan Petroleum Corporation Ltd. vs. UOI 1999 (112) ELT 8 (SC.) (vii) In para 7.9 of the notice, it has been stated that as per the test report of Chie .....

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acteristics of residual crude petroleum oil. Besides, the Supplementary Note (g) under Chapter 27 denotes that: Fuel oil means any hydrocarbon oil conforming to the Indian Standards specification of Bureau of Indian Standards IS: 1593: 1982 (Reaffirmed in the year 1997) . 2.1 Further, the ld. Advocates of the appellants submitted as follows: (i) Samples have not been drawn as per Indian Standard, and test report based on those samples cannot be looked at. (ii) Use of the product is not the test .....

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classified under 27101950. * The residual crude petroleum oil/ residual waste oil cannot be classified as Waste oil under heading 27.10, because the oils as defined in HSCN which are used as lubricating oils, used as hydraulic 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 class .....

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f 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 meaning of fuel oil as follows: CHAPTER 27 Mineral Fuels, Mineral Oils and Products of t .....

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s classified the items under chapter heading 27101950 as Fuel Oil; however, Revenue has completely failed to satisfy the definition and meaning given in supplementary note (g) to Chapter 27 reproduced above. The argument of the Revenue that goods are being used as fuel cannot satisfy the standard meaning given to the item in supplementary note (g) above. All the pleadings of the department that literature of the assessee indicates the item as fuel; and use of the item by the buyer is as fuel can .....

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o 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 .....

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assification 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-asi .....

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