TaxTMI 
TaxTMI 
1999 (9) TMI 239
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....m under Heading 28.23 of C.T.A. The Assistant Collector classified the product under sub-heading 3403.19 of C.T.A. and Confirmed the demand for Customs Duty, holding that the impugned product was primarily a product containing petroleum oil or oils obtained from Bituminous material and their product has the basic characteristics of a lubricating oil; that according to test report, the product was mainly consisting of Hydrocarbon oil and other Carbonaceous matter wherein the Hydrocarbon oil is less than 70% by weight and it had a flash point of above 94°C. The Assistant Collector also held that countervailing duty was leviable on the impugned product and he relied on the decision in the case of Collector of Customs v. Indian Metal Industries 1993 (66) E.L.T. 134 (T). On appeal, the Collector (Appeals) upheld the classification under sub-heading 3403.19, holding that the predominant constituent was mineral oil with flash point of 94° C; that after purification by removal of extraneous matters from the "Waste Oil", the product obtained is sold as lube oil or lube stock to established manufacturers of lubricating oils/preparations. He relied upon the decision in the case of Gan....
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....tics of lubricating oil. He, further submitted that the impugned product is not a residual product of chemical or allied industries; that it appears from the Explanatory Notes of H.S.N. that items mentioned in these notes do not have any similarity with the waste oil and as such the question of classification of waste lubricating oil under Heading 38.23 does not arise; that it has been admitted by the importers that the impugned product was obtained as waste oil from automobile industry which is neither chemical industry nor allied industries. He also mentioned that as per Explanatory Notes of H.S.N. Headings 34.03 includes lubricating preparations designed to reduce friction and the impugned products do have such characteristics. Finally the ld. D.R. submitted that the value of the imported goods was Rs. 16.49 lakhs and the penalty imposed is Rs. 25,000/- which is very less considering the fact that they had imported the material with the knowledge that it was lubricating oil. 5. Shri V. Lakshmikumaran, ld. Advocate, appearing on behalf of the importers, submitted that the presence of water, dirt, and Carbionaceous matter by themselves implies that they imported waste oil ....
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....orks Ltd. v. C.C.E., 1994 (69) E.L.T. 674 wherein the Tribunal held that "Rule 2(a) does not permit us to conclude that when an article squarely falls under a particular tariff heading, it can be made to fall under another heading by invoking the concept of essential character". The ld. Counsel further, submitted that countervailing duty is not chargeable as waste oil is not chargeable as waste oil is not manufactured in India and relied upon the decision in the case of Collector of Customs v. Im Kemex India Ltd. 1996 (86) E.L.T. 95 (T) wherein the Tribunal held that as waste scrap were merely collection of used, worn out obsolete and scrap items, these cannot be held as goods since they were not manufactured as a result of transformation and it was not a resultant product emergent from the raw material into an intermediate or finished product. The Tribunal held that "the scope of entry would be limited to such waste or scrap which arises out of part of manufacture of prime product". 7. Regarding penalty, the ld. Counsel mentioned that the importer was under the bona fide impression that they were entitled to import raw materials required for the manufacture of goods as act....
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....s minerals. The issue regarding classification of waste oils came up for consideration of the Appellate Tribunal in the case of Gujarat Oil Industries v. C.C., 1994 (69) E.L.T. 490 (T) and the Tribunal going by the Test Report which showed that mineral oil content was in excess of 70% by weight and its flash point was 94° C classified the waste oil under sub-heading 2710.60 of Central Excise Tariff treating imported goods as lubricating oils. This decision of the Tribunal was followed in the case of Paramount Petrochemicals v. C.C. 1994 (71) E.L.T. 1041 (T). The Tribunal in both the cases has decided the matter on the basis of contents of mineral oil and flash point of the imported wasted oils. In the present case also it has not been disputed by the Importers that the weight of the mineral oils is less than 70% by weight and its flash point is above 94°C and accordingly following the decision of the Tribunal the waste oils imported in the present matter is classifiable under Heading 34.03. M/s. Gujarat Oil Industries have claimed in their cross-objection that the product imported by them should fall under sub-heading 2710.00 for Customs purposes and sub-heading 27.90 for e....