Classification of solvent naphtha under Heading 27.10 failed at prima facie stage, securing waiver of pre-deposit and stay of recovery.

Naphtha distillates and petroleum ether used as solvents were held, at the prima facie stage, not to be shown as cleared for use as fuel in spark ignition engines, which was necessary for classification under Heading 27.10. The fact that the flash point was below 25 C and reliance on the motor spirit definition in the control order were found insufficient to displace the applicants' case at that stage. In light of earlier Tribunal decisions on similar classification issues, a strong prima facie case was made out for unconditional waiver of pre-deposit of duty and penalty, and recovery was stayed pending appeal.

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Issues: Whether the applicants had made out a strong prima facie case for unconditional waiver of pre-deposit of duty and penalty and stay of recovery pending appeal.

Analysis: The disputed products were naphtha distillates and pet ether used as solvents in pharmaceuticals, paints and rubber industries. Though the flash point was below 25 C, the material on record did not, at the prima facie stage, establish that the goods were cleared as fuel for use in spark ignition engines, which was necessary for classification under Heading 27.10. The reliance on the definition of motor spirit under the control order was held insufficient to conclude otherwise at this stage. In view of the Tribunal's earlier decisions on similar classification issues, the applicants were found to have a strong prima facie case.

Conclusion: Unconditional waiver of pre-deposit of duty and penalty was granted and recovery was stayed pending the appeals.

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