Tariff classification of synthesis gas under Heading 27.05 confirmed; exemption notifications cannot control the classification exercise.

Synthesis gas was classified under Heading 27.05 rather than Heading 2804.90, because tariff classification had to be determined from the tariff entries, section notes, chapter notes and legal principles, not from an exemption notification that merely indicated Chapter 28 coverage. Heading 2804 was inapplicable since it covers hydrogen, rare gases and other non-metals, while synthesis gas is a mixture of gases. The term "similar" in Heading 27.05 was given its ordinary meaning of resemblance, and the product's composition, mode of production and use showed sufficient likeness to coal gas, water gas and producer gas. The HSN-based approach and technical report supported the Heading 27.05 classification.

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Issues: Whether synthesis gas is classifiable under Heading 27.05 of the Central Excise Tariff as similar gas, or under Heading 2804.90 as claimed by the department; and whether exemption notifications referring to Chapter 28 control the tariff classification.

Analysis: The exemption notification was held to be only an indicator and not a determinant of classification. Classification had to be resolved by the tariff entries, section notes, chapter notes, and relevant legal principles. Heading 2804 was found inapplicable because it covers hydrogen, rare gases, and other non-metals, whereas the product is a mixture of gases and not an individual chemical element. The expression "similar" in Heading 27.05 was applied in its ordinary legal sense of resemblance and not identity. On the composition, mode of production, and use, synthesis gas was found to bear sufficient likeness to coal gas, water gas, and producer gas. The technical report and the HSN-based approach supported classification under Heading 27.05.

Conclusion: Synthesis gas was held classifiable under Heading 27.05 and not under Heading 2804.90, and the departmental challenge to that classification failed.

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