Tariff classification of N-Propyl Alcohol: unpotable chemical held outside potable spirits entry, defeating the demand.

N-Propyl Alcohol was treated as an unpotable organic solvent and denaturing agent used as a chemical, so it fell under Item 28 and not Item 22(4)(a) of the Indian Tariff Act, 1934. Item 22(4)(a) was confined to potable spirits in the context of food preparing industries, beverages, alcoholic liquors and vinegars, and the authorities erred in assuming that rejection of exemption automatically placed the goods within that entry. The department bore the burden of justifying its classification, and the petitioner was not barred from relying on Item 28 despite seeking exemption. The demand notice and consequential orders therefore could not stand.

---

---

Issues: Whether N-Propyl Alcohol was classifiable under Item 22(4)(a) of the Indian Tariff Act, 1934 or under Item 28, and whether the demand notice and consequent orders could be sustained.

Analysis: Item 22(4)(a) had to be read in the setting of the heading dealing with food preparing industries, beverages, alcoholic liquors and vinegars, and the spirits described therein were held to be potable spirits. N-Propyl Alcohol was an un-potable organic solvent and denaturing agent used as a chemical, and the material on record, including the import policy classification and technical literature, supported its treatment as a chemical. The authorities erred in proceeding on the assumption that rejection of the exemption notification automatically brought the goods within Item 22(4)(a), without examining whether Item 28 applied. In taxation matters, the burden lay on the department to justify the classification adopted, and the petitioner was not precluded by his request for exemption from contending that Item 28 was the correct entry.

Conclusion: N-Propyl Alcohol was held to fall under Item 28 and not under Item 22(4)(a), so the demand and the impugned orders could not stand.

---