Tribunal Upholds 'Low Aromatic White Spirit' Classification, Rejects Revenue's Reclassification

The Tribunal upheld the classification of 'Low Aromatic White Spirit' under CTH 27101990, rejecting the Revenue's reclassification under CTH 27101920 due to discrepancies in testing standards. Confiscation and penalties were modified, allowing redemption of goods for home consumption with reduced fines. The Tribunal found the goods to be Mineral Turpentine Oil, supporting the original classification. The violation against the PESO Licence was deemed inapplicable due to approved enhanced quantity. The impugned order was upheld, dismissing the Department's appeal and confirming the correct classification under CTH 27101990.

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Issues Involved:
1. Classification of imported goods.
2. Confiscation and penalties imposed.
3. Violation against PESO Licence.

Summary:

1. Classification of Imported Goods:
The primary issue to be decided is the classification of the goods 'Low Aromatic White Spirit' imported by the Respondent. The Respondent classified the goods under CTH 27101990, while the Revenue reclassified them under CTH 27101920 based on the CRCL, Kolkata Test Report. The Tribunal observed that the Test Report did not meet the specifications required for categorizing the goods as 'Solvent 125/240' as per IS 1745:2018. The IBP and FBP of the goods were 148°C and 218°C respectively, which did not align with the IS standard of 125°C (IBP) and 240°C (FBP). Therefore, the Tribunal held that the goods could not be classified under CTH 27101920.

2. Confiscation and Penalties Imposed:
The adjudicating authority initially confiscated the goods imported under Bill of Entry No. 9391372 dated 31.10.2020, allowing re-export on payment of a redemption fine of Rs 2,00,000 and imposed a penalty of Rs 3,00,000. For past imports, a redemption fine of Rs 2,00,000 and a penalty of Rs 5,00,000 were imposed. The Commissioner (Appeals) modified this order, setting aside the confiscation and penalties for past imports and allowing the goods imported under Bill of Entry No. 9391372 to be redeemed for home consumption on payment of a redemption fine of Rs 2,00,000. The penalty of Rs 3,00,000 was upheld. The Tribunal found merit in the Respondent's argument that the goods were Mineral Turpentine Oil and not 'Solvent 125/240', thus supporting the classification under CTH 27101990.

3. Violation Against PESO Licence:
The Respondent's PESO Licence allowed the import of 84,000 liters of Class B Petroleum Product, while the impugned import constituted 97,280 Kgs (1,19,611 Litres). The Respondent submitted that they had applied for and received approval for the enhanced quantity. Therefore, Section 111(d) of the Customs Act, 1962, was deemed not applicable, and confiscation was not warranted on this count.

Conclusion:
The Tribunal upheld the impugned order, rejecting the appeal filed by the Department and confirming that the goods imported by the Respondent were correctly classified under CTH 27101990. The stay application was also disposed of.

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