Tariff classification of natural gas liquid failed under Heading 27.10 because crude petroleum products were excluded.

Natural Gas Liquid was held not classifiable under Heading 27.10 of the Central Excise Tariff because that heading does not cover crude petroleum products; the product was treated as falling within the petroleum oils/crude headings instead. Once the main heading excluded crude oil, no further enquiry into flash point or suitability for use as fuel in spark ignition engines was necessary. The duty demand based on Heading 27.10 classification therefore could not be sustained, and the classification challenge succeeded with consequential relief.

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Issues: Whether Natural Gas Liquid was classifiable under Heading 27.10 of the Central Excise Tariff or under Heading 27.09/27.11, and whether the demand could be sustained on that basis.

Analysis: The impugned product was considered in the light of an earlier decision on condensate and the Board's Tariff Advice that condensate is a petroleum in a natural state and crude oil. On that reasoning, crude mineral oil falls under Heading 27.09 as petroleum oils and oils obtained from bituminous materials, crude, and Heading 27.10 does not cover crude. Once the main heading itself excludes crude, a further enquiry into flash point or suitability for use as fuel in spark ignition engines was unnecessary for bringing the product under Heading 27.10.

Conclusion: Natural Gas Liquid was not classifiable under Heading 27.10, and the duty demand based on that classification could not be sustained.

Final Conclusion: The appeals succeeded on the classification issue, and the consequential duty demand failed.

Ratio Decidendi: Where a tariff heading expressly excludes crude petroleum product, the product cannot be brought within that heading by testing its suitability for use as fuel under an exclusion clause.

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