2019 (2) TMI 1236

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.... The dispute relates to the products namely "12 Hydroxy Stearic Acid" which the appellants were classifying under Chapter heading 2915 as saturated acyclic monocarboxylic acids. The second product is "Ricinoleic Acid" which the appellant is classifying under Chapter heading 29.16 as unsaturated acyclic monocarboxylic acids. 2. Ld. Counsel for the appellant pointed out that the HSN explanatory notes for Chapter 29.15 and 29.16 exclude fatty acids of purity less than 90% and such fatty acids are classifiable under heading 38.23. Chapter heading 291 reads as follows 2915 Saturated acyclic monocarboxylic acids and their anhydrides, halides, peroxides and peroxyadds; their halogenated, sulphonated, nitrated or nitrosated derivatives ....

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....mple and the quantity of "12 Hydroxy Stearic Acid" in the second sample is below 90%. Consequently, the chemical examiner has wrongly advised the classification of the product under heading 29.15/ 29.16. He argued that correct classification of the product would be under Central Excise Tariff heading 38.23. He further argued that chemical examiner is not a competent person to classify the product. He pointed out that prior to June 2014, the appellants were classifying the product under heading 29.15 and 29.16. However, at the time of export, the samples were tested by the Customs, and the Customs sought to change the classification to Chapter 38.23. He argued that since the purity is less than 90% fatty acid, the product is rightly classifi....

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.... on the weight of the dry product) and other fatty acids of a purity of less than 90% (calculated on the weight of the dry product) (Heading 38.23) Chapter heading 3823 (b) Other fatty acids of a purity of 90% or more (calculated on the weight of the dry product) (generally heading 29.15, 29.16 or 29.18) In this regard the Chapter note 1 (a) (b) of Chapter 29 reads as follows:- "Except where the context otherwise requires, the headings of this Chapter apply only to: (a) separate chemically defined organic compounds, whether or not containing impurities; (b) mixtures of two or more isomers of the same organic compound (whether or not containing impurities), except mixtures of acyclic hydrocarbon isomers (other than stereois....

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....cids and not isomers. In these circumstances, the criteria for classification would be the percentage of "Ricinoleic Acid" and "12-Hydroxy Stearic Acid". If we apply the exclusion clause to Chapter heading 2915 and 2916 to the above facts, it transpires that the product containing less than 90% of "Ricinoleic Acid" or "12-Hydroxy Stearic Acid" would be classifiable under Chapter 3823 and not under Chapter 2915 or 2916. In this circumstance, we find merit in the appeal filed by the appellant. 6. Ld. AR has sought to rely on the fact that the subject heading 2915 70 40 specifically includes "12-Hydroxy Stearic Acid". We find that in the light of exclusion clause, if the concentration of "12-Hydroxy Stearic Acid" is above 90%, the product w....