TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 730
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....00025 and 1100026 both dated 21.10.2021. CRCL, Kandla vide Lab test report No.5009 dated 27.10.2021 pertaining to bill of entry 5921646 dated 20.10.2021 "The sample as received is in the form of clear colourless liquid. It is composed of mixture of light mineral hydrocarbon oil having oil content more than 70 % by weight having following constants; Density @ 15 degree C(gm/ml - 0.7807 Flash Point (Degree C) - 38 Initial Boiling Point (Degree C) - 155 05% (V/v) Recorded at (Degree C) - 160 10% (V/v) Recorded at (Degree C) - 161 50% (v/v) Recorded at (Degree C) - 167 90% (v/v) Recorded at (Degree C) - 180 95% (v/v) Recorded at (Degree C) - 184 Final Boiling Point (degree C) - 196 Aniline point (degree) - 84 "The above tested parameters are in agrees,(sic) with Petroleum Hydrocarbon solvents (145/205) as per IS:1745. The actual end use of the sample may be ascertained at your end. Sealed remnant sample returned herewith." 2.1 CRCL, Kandla vide Lab test report No.4863 dated 22.10.2021 pertaining to bill of entry 5921650 dated 20.10.2021 gave following test report; "The sample as received is in the form of clear colourless liquid. It is composed of mixture of ....
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....cted and allowed to be imported through state trading enterprises only as per Policy condition 5 of the Chapter -27of ITC(HS). Schedule-L. and since the appellant in this case is neither an STE nor has submitted any documents showing grant of such rights by the DGFT to import or export any of the goods notified for exclusive trading through STES, the appellant have violated the provisions of FTP and Customs Act, 1962. 2.4 The adjudicating authority accordingly passed the impugned order wherein he * ordered to reject the declared classification of imported goods under CTH 27101990 and reclassified the imported goods under 27101239 * confiscated the goods valued at Rs. 15,85.68,306.47 covered under bills of entry no.s 5921646 and 5921650 both dated 20.10.2021 under section 111 (d) and 111(m) of the Customs Act, 1962 with an option to redeem the confiscated goods on payment of redemption fine of Rs. 1,60,00,000/- for re-export purpose only. * imposed penalty of Rs. 80,00,000/- on the appellant under Section112(a)(i) of the customs Act, 1962 * Permitted to re-export the goods on payment of redemption fine and penalty and other charges as applicable. 2.5 Being aggrieved with t....
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..../240, 150/300, 156.9/202.4 (the appellant's goods found as tested.) 8. Under IS 1745 colour (Saybolt) should be minimum + 20 for solvent 145/205 by the method mentioned in IS 1448, a copy of which is annexed hereto and marked as Annexure "B" (Pages 26 to 34 of Compilation). The colour of solvent is a flag marker as colour intensity is directly proportional to concentration compound called optical density. If the colour of the solvent is + 25 it would fall under 90/135, if the solvent has the colour in excess of +25 it would be ousted from the petroleum hydro carbon solvent under IS 1745. The colour connotes purity which is required to be determined in accordance with the test as laid down in IS 1448. This test was not done to challenge the classification CTH 27101990. 9. The test whether 90% or more by volume (including losses) distill at 210 degree celcious in accordance with ISO 3405 failed which is a overriding criteria by virtue of the Appended note 4 of the Chapter 27. 10. Residue on evaporation test required under IS 1745 for solvent 145/205 is maximum 5 Ml which was required to be done under IS Standard 329 by Jet evaporation method. The residue on evaporation test....
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....0%, 30%, 40%, 50%, 70%, 90%, 95% of solvent following final boiling point and residue recovery. Initial boiling point would reach at 145 where is in the subject case it starts at 167.8 and FBP comes at 196/202.4 where as it should come at 205 and duration of IBP and FBP is to be read with intervals of time where specified evaporation should be noted. There is no such presentation. The data 167 /202.4 show very late IBP and quick evaporation and drying point at 194 which would mean a specific chain of hydrocarbon which is narrow cut whereas 145/205 is a wide cut range and a different item having a different CAS number. Higher quantum of gas and lesser quantum of carbon will culminate into quick evaporation and early IBP and FBP. Proportionately higher carbon will make a long chain to begin with. More carbon means longer chain. The Report does not dispute lawfully our ITC classification, on the contrary, it shows that there is no challenge to our classification 27101990. Selective tests common to freely importable hydrocarbon as well as of the given three are mentioned in the report which is misleading and contrary to IS Standard and it no where says that solvent could fall under CTH....
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....udgments are annexed marked "F" (Pages 88 to 96 of Compilation) and "G" (Pages 97 to 101 of Compilation). 16. Since the department has not been able to prove by any relevant marker that goods could fall under 271012 or it could not fall under Customs Tariff Heading 271019990. The Custom entry given by the appellant under Customs Tariff Heading 27101990 should have been accepted as rightly assessed. 17. The Hon'ble Supreme Court in the case of Krishna Techno Com, confirming the judgement of this Tribunal held that light oil and preparation are those of which 90% or more by volume distilled at 210 degree celcious not below. The result obtained below 210 degree celcious was discarded in view of the specific condition of the statute which demands distillation at 210 degree or not below 210 degree. Judgement of the Hon'ble Supreme Court in the case of Krishna Techno Com Pvt. Ltd. and the judgment delivered by the Hon'ble Supreme Court is annexed hereto and marked as Annexure "H" (Pages 102 to 109 of Compilation) & "I" (Pages of 110 to 111 Compilation). 18. There is no evidence on record to show that that the impugned goods are suitable for use or it quality is near 145....
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....ubject matter are goods i.e. White Spirit, which are claimed for classification under Tariff Heading 27101990, by the party. The department on examination through CRCL found the goods to be mixture of light mineral hydrocarbon oil having oil content more than 70%. On the basis of the another test report found the same to be mixture of light minerals hydrocarbon oil having oil content of more than 70% by weight, and therefore confirming to petroleum oil/hydrocarbon solvent as per IS 1745-2018. The report did not indicate the usage of the product. Appellant sought retest through CRCL report, which indicated the sample to be petroleum hydrocarbon solvents (145/205 as per IS 1745. We find that while department has sought to classify the item under Chapter Heading 27101239, which is a restricted item and is allowed to be imported through State Trading Enterprises only, as per policy condition 5 of Chapter 27 of ITC HS, the appellants are allowed the same if product is classifiable under CTH 27101990, as per various values mentioned by both sides as per test reports. 5.1 Learned AR in response has also sought to rely upon the decision of the lower authorities and he has additionally bro....
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....ng 271012, as low white oil in the matter, atleast 90% or more by volume should distil at 210° according to ISO. This aspect during the course of its finding, the coordinate Bench has gone into at length, to indicate based on earlier decision of M/s. Krishna Technochem Pvt Ltd., delivered vide final order no. 77087-770892019 dated 25.09.2019, and which was confirmed by the Supreme Court as reported in 2002 (379) ELT 273 (S.C), in which Hon'ble Supreme Court upheld the decision of Bench of Tribunal at (Kol) with the finding that the expression "at" in chapter Note 4 of Chapter 27 cannot be construed as "upto" and therefore 90% or more by volume (including losses must get distil "at" 210 degree Celsius and not earlier or later to quality the product as such. 6.2 In the instant case also, we find that as per the reports available 95% of volume is recovered at approximately 184°, and final boiling point is maximum was 202.4 in one case and 196.2 in another case which was not as per the requirement approved of by the Apex Court of 90% distilled taking place at 210 degree Celsius as per statutory note and as per the decision of Krishna Technochem Pvt Ltd (supra). The relevant fi....
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....s per the Test Report is much higher than the requirement of 35 flash point as per IS 1745 standards. The Aromatic content % by volume as per the Test Report found for the impugned goods was 21 whereas the requirement as per IS standard 1745 is 45. Thus, they argued that none of the above parameters in the Test Report are matching with the requirements as per IS 1745 standards for classifying the goods as "Light Oils and preparations" under CTH 2712. 15. The Appellant cited the decision of the Tribunal Kolkata in the case of Krishna Technochem Pvt Ltd Vs CCE, Haldia, vide Final Order No 77087-77089, dt. 25.09.2019 wherein the applicability of Note 4 to Chapter 27 has been examined. The relevant portion of the order is reproduced below: "8. Further, in the instant case, sole reliance has been placed by the Ld. Commissioner on the Chemical Examiner's report. As rightly pointed out by the Ld. Advocate that, in the testing report it has been stated that the sample drawn from the appellant's premises is liquid containing mixture of hydrocarbons having distillation range from 35 degree to 58 degree Celsius and flash point below 25 degree Celsius. The classification adopted by the Ld.....
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....tching with the minimum or maximum standards fixed as per IS 1745 standards. There is a vast difference between the minimum IFB and maximum FBP fixed as per IS standard 1745 and the result received for the impugned goods. Hence, we hold that the impugned goods cannot be classified under CTH 27101239 as per the comparison between the Test reports received from CRCL and its comparison with the IS Standard 1745 parameters required. 17. We find that Revenue has relied upon Note 4 to Chapter 27 for classifying the impugned goods under the CTH 27101239. For the sake of ready reference the said Note 4 is reproduced below: "Note 4. For the purposes of sub-heading 2710 12, "light oils and preparations" are those of which 90% or more by volume (including losses) distil at 210 C according to the ISO 3405 method (equivalent to the ASTM D 86 method)" 18. We find that the above condition as prescribed in the Note 4 has not been verified in the CRCL report. It is the primary condition required to be tested for classifying any goods under CTH 2712. From the said Note, it is evident that for purpose of sub heading 2710.12, the "light oils and preparations" are those of which 90% or more by vo....