AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (8) TMI 550
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....sting and they have also sought the confirmation of opinion by the Department. CRCL, Chennai has informed vide letter dated 28.11.2007 that they had no facilities to test the product "Commingled Crude oil". The appellants vide their letter dated 18.10.2007 have informed the Department that they are closing down the production of petroleum oil by Dehydration and are manufacturing new product falling under CTH 27101990 in the newly erected distillation plant. The Superintendent of Central Excise vide letter dated 14.03.2008 has informed the appellants that they have not paid the duty of Rs. 1,92,80,517/- because of the change in classification they have done. The appellants vide letter dated 08.02.2008 in reply to the above letter submitted that initially, they have classified the goods wrongly under 27101950 and paid duty but when they came to know that correct classification was under CTH 27090000 due to the nature of process undertaken and no duty is liable to be paid. They also submitted that their accounts were audited by the departmental officers who have given them a clean chit. Meanwhile, a SCN dated 04.04.2008 has been issued to the appellants and the Commissioner has confir....
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....r has not visited the factory premises nor has obtained any report on the process. In view of the following cases, such a conclusion is bad in law: (i) CCEx. Vs. Shanmugananda Soapnut Works, 2009 (231) ELT 25 (SC). (ii) CCE Mumbai Vs. Rajpurohit GMP India Ltd. 2009 (231) ELT 577 (SC). 2.4 He also submitted that the Department has sent the samples for tests to CRCL who stated that they have no facility for testing the samples. Later, the samples were sent to Institute of Petroleum who held that sample was not sufficient. Such being the case in the absence of any test report for whatsoever reasons, the Department cannot classify the goods on the basis of presumptions. It was on the Department to get the samples test and to arrive at classifications. Having failed in the same, they should have accept the classification arrived by the appellants which was based on the process involved, the tariff notes and the HSN. 3. The learned counsel for the appellants further submitted that the classification cannot be based on the end-use as held by the Hon"ble Supreme Court in the case of CCEx Vs. Carrier Aircon Ltd., 2006 (199) ELT 577 (SC). The learned counsel also submitted that followi....
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.... their letter dated 02.03.2007 have intimated to the Department that they were intending to procure Commingled Crude Oil and after exposing the same to certain process such as Dehydration, they would clear the same to their customers; in this process there was no change in the characteristics of the raw materials and our product i.e., Commingled Crude Oil and Petroleum oil respectively. They have also enclosed test reports in support of the same. Further, vide their letter dated 30.03.2007, they have intimated the Superintendent that they processed Dehydrating Plant Flow Diagram, Plant Operating procedures and copy of invoice. It has been submitted by them that the Crude oil received from the Tank Lorries were allowed to settle down and then unloaded to Crude oil tanks. Then it is heated up to temperature of 150◦C to vaporize the water in the Crude oil; the water vapours evaporated from the Re-boilers are separated from the top. The separated water vapours are circulated through condenser. From the above said, it appears that the process undertaken is only Dehydration and not akin to Distillation. We find that in the above process, only water is removed from the Crude oil and....
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....bilization in order to normalize the vapour pressure. (v) Elimination of very light fractions with a view to returning them to the oil-deposits in order to improve the drainage and maintain the pressure. (vi) The addition of only those hydrocarbons previously recovered by physical methods during the course of the above mentioned processes. (vii) Any other minor process provided it does not change the essential character of the product. 5.5. It is also seen that HSN 27.10 categorically states that the products covered by this heading are those who have undergone any process other than those specified in the Explanatory Note to Heading 27.09. In view of the above, it is clear that for the products to fall under 27.10 they have to undergo the processes which are other than those listed under 27.09. We find that in the instant case, the processes undertaken by appellants are not those beyond the cases listed therein. Therefore, we have no hesitation in holding that the impugned product is rightly classifiable under CTH 27090000. We also find that the case law submitted by the learned counsel for the appellants in this regard is squarely applicable. 5.6. It has been contended by....