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2019 (1) TMI 82

heading 2710 19 90 or under heading 2710 12 90? - Held that:- The goods falling under Chapter Heading 2710 12 90 are restricted as per Import Policy and allowed to be imported through State Trading Enterprises (STE) only, as per policy condition-5 of the Chapter 27 of ITC (HS) Schedule-1 - Thus, if the imports are in violation of aforesaid condition, then the same would be liable to action under the Customs Act - The said restriction is specifically applicable to CTH 2710 12 90, claimed by Revenue and not to 2710 19 90, claimed by the appellant. Consequently, depending on the correct classification of the product, the ITC restriction would apply to the imports. Thus, the product imported by the appellant answers to specifications prescribed under sub heading note 4 and therefore, would fall under the description ‘light oils and preparations’ of sub heading 2710.12. Imposition of redemption fine - penalty - Held that:- The section is triggered when the prohibited or restricted goods are imported without due authorization. The bonafide or malafide intention of the importer is of no relevance so far as confiscation under section 111(d) of the Customs Act is concerned - Sec .....

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US MINERALS, OTHER THAN CRUDE ; PREPARATIONS NOT ELSEWHERE SPECIFIED OR INCLUDED, CONTAINING BY WEIGHT 70 % OR MORE OF PETROLEUM OILS OR OF OILS OBTAINED FROM BITUMINOUS MINERALS , THESE OILS BEING THE BASIC CONSTITUENTS OF THE PREPARATIONS ; WASTE OILS - Petroleum oils and oils obtained from bituminous minerals (other than crude ) and preparations not elsewhere specified or included , containing by weight 70 % or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, other than those containing biodiesel and other than waste oils. 271012 - Light oils and preparations : - Motor Spirit : 27101211 - Special boiling point spirits (other than benzene, toluol) with nominal boiling point range 55 - 115°C kg . 10% - 27101212 - Special boiling point spirits (other than benzene, benzol, toluene and toluol ) with nominal boiling point range 63 - 700C kg . 10% - 27101213 - Other Special boiling point spirits (other than benzene, benzol toluene and toluol) kg . 10% - 27101219 - Other kg . 10% - 27101220 - Natural gasoline liquid (NGL) kg . 10% - 27101290 - Other kg . 10% - 271019 - Other : 27101910 - Superior kerosi .....

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tion, Ld. Counsel relies on the IS standards of Petroleum Industries and terminology. The said publication describes middle distillate and White spirits as follows: 1.20.040 middle distillate Kerosene and gas oils boiling between approximately 150oC and 400oC as normal atmospheric pressure and having a closed-cup flash point above 38oC. 1.20.170 white spirit Solvent of mineral origin, usually distilling between 130oC and 220oC. 2.3 Ld. Counsel also relied on the opinion of professor M.C Dwiwedi (ex- Dept. of Chemical Engineering, I.I.T. Bombay) dated 27.07.2018. Ld. Counsel pointed out that impugned order holds that the importer could not produce any technical literature to show that LAWS can never be light oil as defined in sub heading note 4 of Chapter 27. He argued that such a negative evidence can never be established. 2.4 Ld. Counsel further pointed out that there is no case for imposition of penalty and for redemption fine as the Revenue itself was not sure of the classification claimed as it had to seek clarification from chemical examiner on various issues. In these circumstances, imposition of redemption fine and penalty is not justified. 3. Ld. AR relies on the impugned o .....

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heading note 4 to the Chapter 27 reads as follows: 4. For the purposes of sub-heading 2710 12, "light oils and preparations" are those of which 90 % or more by volume (including losses) distil at 210 °C according to the ISO 3405 method (equivalent to the ASTM D 86 method). The history of reports produced from CRCL has been reproduced in para 23.1.1-23.1.6 and reads as follows of the impugned order: 23.1.1 The CRCL, Kandla vide Test Report No. 4294 reported on 15.03.2018, had reported that the sample is light oil/SBPS. The test result furnished by the CRCL, Kandla is reproduced below :- The sample is in the form of clear colourless liquid. It is composed of mixture of mineral hydrocarbons having following constants Initial boiling point = 152 degree Celsius Final boiling point - 186 degree Celsius Density at 15 degrees Celsius = 0.7834 gm/ml Difference of temperature between 5 ml and 90 ml distillation = 15 degree Celsius. It is light oil/SBPS. Sealed remnant returned herewith . 23.1.2 The importer vide their letter dated.16.03.2018 requested for retesting of the sample by contending that some parameters were not taken into consideration by the Lab Authorities while te .....

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dated 25.05.20 18, for retesting the sample with request to clarify :- (i) Whether the sample confirms the parameters of Light Oil or Low Aromatic White Spirit (ii) Parameters along with result obtained, if found Light Oil (iii) Parameters along with result obtained, if found Low Aromatic White Spirit (iv) Parameters along with result obtained and description, if found other than Light Oil or Low Aromatic White Spirit. (v) Parameters to djfferentiate between Light Oil and Low Aromatic White Spirit. 23.1.6 I find that the CRCL, New Delhi, has sent their report vide letter F. No. 27-CTJS/C-03/2018-19 dated 18.06.2018, the same is reproduced below :- Report The sample is in the form of colourless liquid. it is mainly composed of mineral hydrocarbon oil. Mineral hydrocarbon oil content is more than 70% by wt., having following constituents: 1. Density at 15° C, g/ml - 0.7810 2. Flash Point (Abel) - 45° C 3. Distillation range Initial Boiling Point (IBP) - 148° C 5% by volume - 160° C 90% by volume - 1800 C Final Boiling Point (FBP) - 184° C Difference between temperature of 5% and 90% distillation is less than 60° C actual being 200 C) The Sample is Light Oil an .....

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2710.12. 4.3 Ld. Counsel has placed reliance on the reports of the supplier, IS specifications, etc. to assert that the said imported goods comes under the nature of solvent and therefore they are not classifiable under heading 2710 12 90 but are rightly classifiable under head 2710 19 90. We are unable to find any such distinction in the Customs Tariff on the basis of use of the goods. The Customs Tariff classifies the goods solely on the physical specifications mentioned under the Customs Tariff. In respect of Light Oil and preparations sub heading note 4 clearly prescribes the specifications. The product imported by the appellant answers to those specifications and thus there is no reason not to classify the said goods in the sub heading 2710 12 90. Ld. Counsel has relied on the opinion of the expert namely, Prof. M.C. Dwivedi (ex. Dept. of Chemical Engineering I.I.T. Bombay). In para 3 of the report, Shri Dwivedi as observed: (c) WTO - HSN NOMENCLATURE I For the purpose of international trade and movement the World Customs Organization (WTO) has classified goods under the Harmonized System Nomenclature (HSN). Each material is assigned a unique eight digit code number1 reflectin .....

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ttempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force; It is apparent that confiscation in such cases is not based on any intention of the appellant or any malafied acts of the appellant. The section is triggered when the prohibited or restricted goods are imported without due authorization. The bonafide or malafide intention of the importer is of no relevance so far as confiscation under section 111(d) of the Customs Act is concerned. The appellant has also relied on the decision of the Hon ble Apex Court in the case of Northern Plastics 1990 (101) ELT (549). In the said case facts were significantly different. In the said case, section 111(m) was invoked. Section 111 (m) relates to the description made by the importer at the time of import and, therefore, the bonafide or malafide of importer is of relevance. In case Section 111(d), the belief of importer is not relevant. 4.6 Ld. Counsel also argued that no penalty can be imposed as this is merely a dispute relating to classification. Section 112 (a) reads as follows: Section 11 .....

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