Rubber Processing Oil correctly classified under CTH 27101990 with 35% aromatic content, value enhancement set aside

CESTAT Ahmedabad allowed the appeal regarding classification of imported Rubber Processing Oil (RPO). The tribunal held that RPO was correctly classified under CTH 27101990 rather than CTH 2707 99 00, as aromatic content was 35% based on accredited laboratory reports and supplier certificates, not 50% as claimed by customs laboratory whose testing method was unspecified. The country of origin dispute between Singapore, UAE, and Malaysia had no revenue implications since no preferential duty was claimed. The tribunal set aside the value enhancement from USD 531 to USD 585 PMT as it lacked basis, noting freight was pre-paid. Consequently, all penalties were set aside and appeals allowed.

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Issues:
1. Classification of Rubber Processing Oil (RPO)
2. Dispute about country of origin
3. Enhancement of declared value twice

Classification of Rubber Processing Oil (RPO):
The appellant classified the goods under CTH 27101990, while the department ordered final assessment under CTH 2707 99 00 due to a test report showing aromatic content above 50%. The appellant argued that the test report did not mention the testing method, and presented evidence showing lower aromatic content. The Tribunal found in favor of the appellant, classifying the RPO under CTH 27101990 based on the supplier's quality certificate and an accredited laboratory report.

Country of Origin Dispute:
The appellant ordered goods from a supplier in Singapore, but the invoice showed the country of origin as UAE, later determined to be Malaysia. As the appellant did not claim any duty concession based on the country of origin, the issue was deemed to have no revenue implication. Citing a previous Tribunal decision, the penalty for misdeclaration of country of origin was set aside.

Enhancement of Declared Value:
The value of the goods was enhanced twice, first to USD 531.500 PMT and then to USD 585 based on an invoice from the shipping agent. The Tribunal noted that the freight was prepaid and included in the price, making the additional freight charge unjustified. As there was no evidence of extra payment by the appellant, and no contemporaneous import at the enhanced value, the Tribunal found the second value enhancement to be without basis and unsustainable.

The Tribunal set aside the impugned order against the appellant, including penalties imposed, and allowed the appeals with consequential relief.

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