TaxTMI 
TaxTMI 
2019 (1) TMI 82
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.... by the impugned order and offered to the appellant against the redemption fine of Rs. 43,41,821/-. In respect of goods held cleared by the appellant redemption fine of Rs. 38,40,076/- was imposed under section 125 of the Customs Act. A penalty of Rs. 35 lakhs was also imposed on the appellant under section 112(a) of the Customs Act. Demand of differential duty of Rs. 75,78,301/- was however dropped. 2.1. Ld. Counsel pointed out that heading 2710 19 90 and heading 2710 12 90 read as follows: Tariff Item Description of goods Unit Rate of duty Standard Preferential Areas 2710 PETROLEUM OILS AND OILS OBTAINED FROM BITUMINOUS MINERALS, OTHER THAN CRUDE ; PREPARATIONS NOT ELSEWHERE SPECIFIED OR INCLUDED, CONTAINING BY WEIGHT 70 % OR MORE OF PETROLEUM OILS OR OF OILS OBTAINED FROM BITUMINOUS MINERALS , THESE OILS BEING THE BASIC CONSTITUENTS OF THE PREPARATIONS ; WASTE OILS - Petroleum oils and oils obtained from bituminous minerals (other than crude ) and preparations not elsewhere specified or included , containing by weight 70 % or more of petroleum oils or of oils obtained from bit....
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....nsel also relied on IS specifications of solvents to assert that the product is in the nature of solvent and, therefore, the product should be classified along with the classification of „other solvents‟ i.e. 2710 19 90. Ld. Counsel also relied on the data sheet of Shell Chemicals dated 19.10.2007 which describes the specifications of this product namely „White Spirits‟. The said report describe the white spirits is a wide boiling range, medium evaporating solvent widely used in the paint, ink and dry-cleaning industries. Ld. Counsel also relied on the data sheet of Shell Chemicals issued in November, 2001 relating to Low Aromatic White Spirit. The said data sheet describe Low Aromatic White Spirit as a hydrodesulphurised straight-run hydrocarbon solvent with an aromatics content, depending on the crude oil from which it is refined, of approximately 18%. Ld. Counsel argued that the heading 2710 12 90 related to fuels whereas the heading 2710 19 90 related to solvents. Ld. Counsel argued that the product imported by them is used as solvent in the market. He pointed out that even as per the data sheet, it is clear that the product is a solvent and thus, it is ....
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....mpanies who have been granted rights for marketing of transportation fuels in terms of Ministry of P&NG‟s Resolution No. P=23015/1/2001-MKT dated 08.03.2002 including HPCL, BPCL & IBP who have been marketing transportation fuels before this date." Thus, if the imports are in violation of aforesaid condition, then the same would be liable to action under the Customs Act. 4.1 The said restriction is specifically applicable to CTH 2710 12 90, claimed by Revenue and not to 2710 19 90, claimed by the appellant. Consequently, depending on the correct classification of the product, the ITC restriction would apply to the imports. 4.2 The heading 2710 of the Customs Tariff Act reads as follows: "Petroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70% or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; waste oils ííí- -petroleum oils and oils obtained from bituminous minerals (other than crude) and preparations not elsewhere specified or included, containing by weight 70% or more....
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.... 23.1.4 I find that the importers vide their letter dated 26.03.2018 reiterated that their product is Low Aromatic White Spirit (LAWS for short) I Mineral Turpentine Oil as it follows the Indian Standards 1745-1978 (reaffirmed 2011. I find that vide letter dated 09.04.20 18 the import group sought further clarification from the CRCL, Kandla. The CRCL, Kandla vide their letter dated 13.04.2018, reported that (a) As per the literature available here it is stated that based on molecular compositional data on petroleum there has been five sets of fractions of petroleum. These fractions are defined by boiling points. 1. Gases (C1.-C4) 2. Naphtha (initial boiling point -210° 0) 3. Mid distillate (210° C to 345° C) 4. Vacuum gasoil(345°C-564°C) 5. Residuum The product u/r comes under the second fraction as per the reference "Kirk-Othmer Encyclopedia of Chemical Techno Zogyourth edition Volume - 4" (b) Petroleum Product Handbook, (in the appendix Standard Industrial Naptha and related materials) also describes the characteristics of Petroleum Spirits (Mineral Spirit). 1. Colour - Water white 2. Distilla....
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....eg;C and therefore it meets the requirement of Light Oil. 3. Parameters along with result obtained, if found Low Aromatic White Spirit As Such there is no standard for LAWS, however, the sample meets the requirement of one of the grades as per IS:1 745-1978 (reaffirmed 2011) - Specification for petroleum Hydrocarbon Solvents Parameter obtained in laboratory Standard parameters of solvent 145/205 low aromatic as per 1S1745:1978 i.density at 15 C,g/ml ii Flashpoint(Abel) iii. distillation range initial boiling point (IBP) 50% by volume recovered at 95% by volume recovered at Final Boiling Point (FBP) Iv Aromatic content 0.7810 45 Degree C 148 Degree C 170 Degree C 184 Degree C 184 Degree C 10% by volume To be reported 35 Degree C(min) 145 Degree. C To be reported To be reported 205 Degree C(max) 40% by volume(max) 4. Parameters along with result obtained and description, ffound other than Light Oil or Low Aromatic White Spirit. NO 5. Parameters to differentiate between Light Oil and Low Aromatic White Spirit." Any Solvent based on mineral hydrocarbon covered by any standard including IS: 1745-1978....
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....le. Solvents with flash point less than 24°C are classified as 271012 and those with higher flash point as LAWS (ANYSOL -5) are classified as HSN Code -271019. These have been regularly imported from various countries under the HS Code 271090. Typical import data sheet during the period 22 Nov. to 26 Nov. 2016 is given in Appendix -12. HSN codes for some petroleum products are given in Table -5 and relevant extracts from DGFT -ITC (HS) 2710 are given in (Appendix-13). Copies of the two invoice issued by BPCL No. 6000007724 dated 29-04-2017 (Appendix 14) and from HPCL invoice No. 11585 G. 117008209 dated 06-03-2018 (Appendix -15) are attached to show that MTO is being given HSN Code as 2710 1990. The above discussion concludes that high flash solvents, both low aromatic and high aromatic come under HSN classification 2710 1990, technically as well as in industry practice. We do not find any merit in the said opinion of Shri Dwivedi. His observations are totally at odds with the scheme of Customs Tariff and HSN, and, therefore, rejected. 4.5 The redemption fine has been imposed on the appellant. In the appeal memorandum, the appellant has argued that the confisc....