Tribunal affirms reclassification of "Mixed xylene" under Central Excise Tariff Act

The Tribunal affirmed the reclassification of imported "Mixed xylene (solvent grade)" under SH 2707.30 of the Central Excise Tariff Act Schedule, rejecting the appellant's argument that the goods should be classified under SH 2902.44. The decision was based on the finding that the goods did not meet the criteria of being "the same organic compound" as required by the HSN Note on "AROMATIC HYDROCARBONS." The appeal was dismissed, upholding the Asst. Commissioner's reclassification and demand for differential duty.

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Issues: Classification of imported goods under the Central Excise Tariff Act Schedule

Detailed Analysis:

1. Classification Dispute:
The case involves a dispute regarding the classification of "Mixed xylene (solvent grade)" imported by the appellants in October 1995. The goods were initially cleared under SH. 2902.44 of the CTA Schedule based on provisional assessments pending analysis reports. However, subsequent analysis revealed that the goods were a mixture of "Xylene isomers" along with Ethyl benzene. The Asst. Commissioner reclassified the goods under SH 2707.30 and demanded differential duty, a decision upheld by the Commissioner (Appeals), leading to the appeal before the Tribunal.

2. Arguments and References:
The counsel for the assessee argued that the mixture of three xylene isomers and Ethyl benzene should be considered "the same organic compound" under Note 1 (b) to Chapter 29, making it classifiable under SH 2902.44. Reference was made to a previous Tribunal order and a specific goods description in a notification to support this argument.

3. Counter-Submission and Precedent:
The SDR contended that since the goods contained less than 95% xylene isomers by weight, they should be classified under SH 2707.30. The SDR also cited a precedent where a similar classification claim was rejected, supporting the reclassification under Chapter 27.

4. HSN Note Consideration:
The Tribunal carefully considered the submissions and highlighted the importance of the HSN Note on "AROMATIC HYDROCARBONS." The note emphasized the requirement for xylene to contain 95% or more by weight of xylene isomers to fall under a specific heading.

5. Classification Decision:
After thorough analysis, the Tribunal concluded that the subject goods, being a mixture of dimethyl benzene and ethyl benzene, did not meet the criteria of being "the same organic compound." The goods containing less than 95% xylene isomers were appropriately classified under SH 2707.30-Xylole, as per the HSN Note, leading to the affirmation of the reclassification decision and the dismissal of the appeal.

6. Final Verdict:
Based on the above reasoning, the Tribunal affirmed the classification of the goods under SH 2707.30 of the CTA Schedule, ultimately dismissing the appeal. The operative part of the order was pronounced in open court on 19-12-05.

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