Chemical storage tanks with temperature control were classified under Heading 84.19, allowing Cenvat credit and cancelling penalty.

Chemical storage tanks fitted with a temperature-control facility were held to fall under Heading 84.19 on examination of Chapter Notes 73 and 84 of the Central Excise Tariff Act, 1985. On that classification, the duty paid on the tanks qualified for Cenvat credit, since the assessee's assertion that the tanks had the facility was accepted from the existing record. As credit was admissible, the associated penalty could not survive and was set aside in favour of the assessee.

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Issues: Whether chemical storage tanks with temperature-control facility were classifiable under Heading 84.19 so as to qualify for Cenvat credit, and whether the resulting penalty could survive.

Analysis: The dispute turned on classification. On examination of Chapter Notes 73 and 84 of the Central Excise Tariff Act, 1985, the tank having a temperature-controller facility was held to fall under Heading 84.19. The assessee's assertion that the storage tanks had such a facility was accepted in view of the earlier record. Once the tanks were classifiable under Heading 84.19, the duty paid on them was eligible for Cenvat credit. The penalty followed the same result and could not stand once credit was held admissible.

Conclusion: The tanks were correctly classifiable under Heading 84.19, Cenvat credit on the duty paid was allowable, and the penalty was set aside in favour of the assessee.

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