Tariff classification of carbon black feed stock as low sulphur fuel oil controlled excise duty despite non-fuel use.

Carbon black feed stock with 0.5% sulphur was treated as low sulphur fuel oil for excise purposes because tariff classification under Item 10 of the Central Excise Tariff, covering furnace oil and fuel oil, controlled the assessment. The assessee failed to show any alternative tariff description that would displace that classification. Its actual use as a feed stock, rather than as fuel, did not change the product's character for tariff and notification purposes, where the governing test was the prescribed specifications and classification criteria. On that basis, the product attracted duty at the higher rate.

---

---

Issues: Whether carbon black feed stock with sulphur content of 0.5% was correctly treated as low sulphur fuel oil and subjected to duty at the higher rate under the relevant excise notification, notwithstanding the contention that it was used as a feed stock and not as fuel.

Analysis: The decisive consideration was that the goods were assessable under Item 10 of the Central Excise Tariff, which covered furnace oil, a fuel oil. The assessee had sought the benefit of preferential assessment as something other than low sulphur fuel oil, but did not establish what other tariff description would apply. The sulphur content of 0.5% was found to be low in absolute terms and also when compared with the sulphur specifications for fuel oils referred to in the record. The fact that the product was not actually used as fuel did not displace its character for tariff and notification purposes, because the assessment turned on the prescribed specifications and tariff classification.

Conclusion: The product was rightly treated as low sulphur fuel oil and was liable to duty at the higher rate. The assessee's challenge failed.

---