Tariff classification of ethyl alcohol under Heading 2204.00 sustained, preserving exemption without proof of actual fuel use.

Ethyl alcohol found suitable for use in spark ignition engines remained classifiable under Heading 2204.00, and the exemption under Notification No. 20/89 applied because the notification did not require actual use as fuel. The asserted deletion of Heading 2204.00 was not accepted for the relevant period, so the earlier classification list continued to govern that period. Heading 3823.00 was held inapplicable because Chapter 38 excludes separate chemically defined compounds already specifically provided for, and ethyl alcohol was not shown to fall within that residuary heading. The classification and consequential exemption were therefore upheld.

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Issues: Whether ethyl alcohol manufactured by the assessee was classifiable under Heading 2204.00 and entitled to exemption under Notification No. 20/89, or whether it fell under Heading 3823.00 for the relevant period.

Analysis: The product had already been found suitable for use as fuel in spark ignition engines, and that finding was not challenged. Heading 2204.00 covered ethyl alcohol suitable for such use, and the exemption notification applied to power alcohol without imposing any further condition that the alcohol must actually be used as fuel. The contention that Heading 2204.00 stood deleted from the tariff was not accepted for the period in question, and the earlier classification list therefore continued to govern that period. Heading 3823.00 was also held inapplicable because Note 1A to Chapter 38 excluded separate chemically defined compounds otherwise specifically provided for, and ethyl alcohol was not shown to fall within that chapter.

Conclusion: The classification under Heading 2204.00 and the consequential exemption were upheld, and the appeal was rejected.

Final Conclusion: The assessee retained the benefit of the earlier classification and exemption for the period covered, and the departmental challenge failed.

Ratio Decidendi: Where goods are specifically covered by a tariff heading and an exemption notification applies without any additional condition, they cannot be shifted to a residuary heading merely because of an asserted deletion or by invoking a chapter note that excludes specifically covered goods.

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