2003 (4) TMI 137 - AT - Central Excise

Tribunal Rules on Classification of Products under Central Excise Tariff

The Tribunal ruled in favor of the appellants in a case concerning the classification of 'First Cut' and 'Second Cut' products under sub-heading 2710.13 ... Naphtha Issues involved: Classification of 'First Cut' and 'Second Cut' manufactured from naphtha under sub-heading 2710.13 of the Central Excise Tariff, duty demand confirmation, penalty imposition, and confiscation of goods.Summary:The appellants contested the classification of the products under sub-heading 2710.13, arguing that the goods must meet criteria for flash point and suitability for use as fuel in spark ignition engines, citing relevant case law. The Department supported the impugned order based on Chapter Note 2 of Chapter 27. The Tribunal found a flaw in the Adjudicating Commissioner's decision, noting that both flash point and suitability for use as fuel must be considered for classification under sub-heading 2710.13. As the Commissioner did not assess the suitability for use as fuel, the confirmation of demand and penalties were deemed unjustified. The Tribunal set aside the order-in-original at the stay stage, ruling in favor of the appellants. The appeal was allowed, and the stay application was disposed of without delving into other issues raised by the appellants.