TaxTMI 
TaxTMI 
2013 (8) TMI 688
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.... :- 3.1 M/s. Seaworld Shipping & Logistics Pvt. Ltd. Gandhidham (shipping agent) had filed a prior-entry Import General Manifest (IGM) No. F-35 dated 22-4-2004 for import of 5221 MTs cargo declared as 'Condensate crude petroleum oil' (CPO) with Customs House, Mundra. The final entry inwards was granted to the vessel on 26-4-2004. On scrutiny of the IGM, it was observed that the goods were loaded from Bandar Abbas, Iran and were consigned to M/s. Modern Chemicals, Paswara House, Baghpat Road, Meerut and M/s. Paswara Impex Ltd, Paswara House, Bhagpat Road, Meerut under 12 Bills of Lading Nos. 153/01 to 153/12, all dated 7-4-2004. 3.2 After unloading from the vessel, the goods were stored in tank No. 106 of liquid terminal at Gujarat Adani Port Ltd. (GAPL), Mundra. The custodian of tank No. 106 i.e. GAPL, reported that as against manifested quantity of 5221 MTs shown in IGM as well as Bills of Lading, only 4722.042 MT was received in the said tank and a protest to this effect was lodged by them with the master of the vessel. 3.3 The above goods were sold to the following buyers on high sea sale basis who sought clearance by claiming classification of imported goods under CTH ....
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....um oil. 2 Bharat Petroleum Corpn. Ltd., Sewree 15-5-2004 Product appears to be predominantly SKO mixed with higher distillates. The low flash point (<8) and IBP (56.5) suggests that there are traces of lighter fractions also. Therefore, the product as represented by the sample is not meeting the requirement of SKO as per IS : 1459 : 1974 w.r.t. colour, flash point, sulphur, distillation FBP (354.4), smoke point (17) and its IBP (56.5) is low as compared to normal SKO. 3 FSL Gandhinagar 10-6-2004 The sample was a mixture of low boiling points of petroleum hydrocarbons and hydrocarbons of kerosene and high speed diesel. The sample was defined as petroleum hydrocarbons solvents as they contained mixtures of various hydrocarbons, density at 15°C gm/ml: 0.7971; colour: light yellow; distillation IB °C: m54.0; FPB °C: 455.0, flash °C: fired at room temp. 4 Institute of Reservoir Studies, ONGC Ltd., Ahmedabad 2-6-2004 The sample was light yellow in colour; IBP °C: 58.0; distillation upto 225°C was 2782% w/w; The sample was mixture of hydrocarbons; the analysis do not conclude the samples to be pure condensate or a mixture....
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....o approximately C-20 hydrocarbons with no unsaturated hydrocarbons. According to the appellants, the imported goods merit classification under CTH 2709 00 00 as Crude Petroleum Oil. Appellants also relied upon the explanatory notes to HSN for sub-heading 2709.10 which states that these headings also cover Gas Condensate i.e. Crude Oils and that these goods are obtained by mainly cooling and depressurisation of the condensable hydrocarbons (C-4 to approx. C-20). The Harmonized System Committee of World Customs Organisation, in its 24th Session discussed the definition of Condensate while concluding, amongst others, that the same consists of C-4 to approx. C-20 hydrocarbons and classified the same under CTH 2709. (vi) That onus lies with the Department to classify the product for which reliance was placed on the following judgments : (a) Hindustan Ferodo Ltd. v. CCE, Bombay - 1997 (89) E.L.T. 16 (S.C.) (b) Madhu Wool Spinning Mills v. UOI - 1983 (14) E.L.T. 2200 (Bom.) (c) Arya Abhushan Bhandar v. UOI - 2002 (143) E.L.T. 25 (S.C.) (d) Oil India Ltd. v. CCE, Shillong - 2002 (148) E.L.T. 802 (Tri.) ....
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....processing from the natural gas. The issue before CESTAT and Apex Court was the classification of such gas condensate obtained by processing of natural gas. (v) That as per the statement of Shri Arvind Agarwal, Director of M/s. Paswara Impex, Shri Santosh Dharamdas, (Managing Director of M/s. Poly Petrochem Ltd), Shri Mahendra V. Shah (of M/s. Zaff Petrochemicals) etc., the case of the Revenue is established. (vi) that as per 24th Session of the Harmonized System Committee of World Customs Organisation, Brussels, the distinction between the condensates of CTH 2709 and other similar products of 2710 is difficult and overlapping. (vii) that the value of the imported goods is correctly enhanced on the basis of contemporary import. (viii) that confiscation of imported goods and imposition of penalties have been correctly made by the adjudicating authorities. (ix) that as per the Final Order No. A/951-957/WZB/AHD/2011, dated 28-1-2011/6-6-2011, in the case of M/s. Pushpal Exports Pvt. Ltd. & Others v. CC, Kandla, the orders of Commissioner are required to be upheld. 10. Similar appeals No. C/798 to 800/2006 were filed by M/s. Modern ....
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..... v. CCE, Shillong [2002 (148) E.L.T. 802], which was maintained by Hon'ble Supreme Court. It is observed from the facts available in Para 2 of the Oil India Ltd. case (supra) that the product 'Condensate' in that case was clearly obtained in a LPG plant for recovery of LPG from natural gas. During the process of separation of LPG, Lighter Fractions of Crude Oil (C5 and C6+) present in vapour form were condensed and were termed as 'Condensate'. It is that form of 'Condensate' obtained from natural gas which has been held to be classifiable under 2709 for which Tariff advice dated 17-11-1981 was also applicable. This fact is also clarified from the HSN explanatory notes under CTH 2709 relied upon by the ld. AR, which reads as follows : "27.09 Petroleum oils and oils obtained from Bituminous minerals, crude : This heading covers crude petroleum oils and crude oils obtained from bituminous minerals (e.g. from shale, calcareous rock, sand), i.e. natural products, whatever their composition, whether obtained from normal or condensation oil-deposits or by the destructive distillation of bituminous minerals. The crude oils thus obtained remain classified in this heading even when th....
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.... 60 19 19 80 12 31 100 14 45 120 9 54 140 9 63 160 7 70 180 5 75 200 5 80 220 4 84 240 4 88 260 3 91 280 2 93 300 3 96 340 2 98 340 + 2 100 Para 12 : Regarding the definition of description of natural gas condensates, the Secretariat feels that the Explanatory Note to the EC Combined Nomenclature can be used as a basis therefore. The Secretariat also feels that since this Note contains information only on the manufacturing process, it would be useful to add further information on the composition and characteristics of the products, so as to enable HS users to distinguish them from similar products of heading 27.10. The Chinese Administration has given technical information on the composition and characteristics of gas condensates. Based on the Note from the EC and the information from the Chinese Administration, the Secretariat wishes to put forward the following outline of the definition or description of natural gas condensates as a basis for discussion by the Sub-Committee. Natural Gas condensates - - are....
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....ry on the part of the appellants to establish that the gas condensates imported by them were obtained during the stabilization of wet natural gas immediately upon its extraction, because the appellants are claiming for a favourable classification under CTH 2709. In the absence of establishing the natural origin of the gas condensate, when competing CTH heads are existing, for goods of similar chemical composition, the classification of gas condensates imported by the appellants has to be decided as per Rule 3(c) of the General Rules for the Interpretation of Customs Tariff Act, 1975. The same is reproduced below. "3. When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows : (a) The heading which provides the most specific description shall be referred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods,....