1997 (4) TMI 169 - AT - Central Excise

Classification of Petroleum Product Tanks: Tribunal rules tanks fall under 3926.90, not 3925.10 for exemption.

The Tribunal ruled that tanks for storing petroleum products should be classified under Chapter sub-heading 3926.90 instead of 3925.10 for exemption ... Classification Issues: Classification of product under specific tariff sub-heading 3925.10 or broad heading 3926.90Detailed Analysis:The case involved the classification of a product described as 'tanks for storing petroleum products' under either Chapter sub-heading 3925.10 or 3926.90 for exemption purposes. The Department argued that the product should be classified under 3925.10 as tanks are specific items used for storage, while the appellants claimed classification under 3926.90 based on previous Tribunal decisions. The respondent contended that the end use should not determine classification and specific descriptions should prevail over generic ones.The consultant for the appellants cited previous Tribunal decisions to support their claim, emphasizing that the product should be classified under 3926.90 as it falls under the broad category of articles of plastic. The respondent argued that the specific description of the product as a tank should lead to classification under 3925.10, regardless of its end use for storing petroleum products.Upon reviewing the submissions, the Tribunal analyzed the relevant tariff headings. It noted that Chapter 39 provided specific broad headings for classification, with a focus on builders-ware of plastic under sub-heading 3925.10. The Tribunal considered whether a tank for storing petroleum products could be considered builders-ware and concluded that it did not align with the common understanding of the term.The Tribunal further examined the nature of the product as an article of plastic and found that it did not fit into any other specific headings, leading to classification under the residuary entry of sub-heading 3926.90. Referring to previous cases involving tanks used in chemical plants, the Tribunal agreed that tanks for storing petroleum products did not qualify as builders-ware and should be classified under 3926.90.Ultimately, the Tribunal allowed the appeal, ruling that tanks manufactured for storing petroleum products should be classified under Chapter sub-heading 3926.90. The decision was based on the understanding that such tanks did not meet the criteria to be considered builders-ware under the relevant tariff headings.Consequently, the appellants were granted relief in accordance with the law following the Tribunal's classification decision.