AI Drafter 
TaxTMI 
TaxTMI 
2024 (10) TMI 1691
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....d., Shivlal Goyal, K.C. Goyal, Sunil Kumar Nenwal, Standard Chemicals, Sapphire Industrial Products Pvt. Ltd., V.M.A. Enterprises Ltd., R.K. Chemicals, Haryana Chemicals, Swastik Plasticizer and PVC Pipes Indore Pvt. Ltd., Shanti Chemicals, Himchem Enterprises, Gangotri Chlorochem Ltd., Balaji Plasticizers And Chemicals, Shivtek Industries Private Limited., Shiv Kumar Nenwani Versus Commissioner of Customs -Kandla Hon'ble Member (Technical), Mr. Raju And Hon'ble Member (Judicial), Mr. Somesh Arora For the Appellant : Shri Pramod Kumar Rai, Shri Jayant Kumar, Shri Y.S. Reddy, Advocates For the Respondent : Shri Girish Nair & Shri Sanjay Kumar, Authorised Representative ORDER RAJU These appeals have been filed by M/s Panoli Intermediates India Private Limited and others. All these appeals involve the issue of classification of products namely, Waksol A, Waksol B, Waksol 9-11A, Waksol 9-11B, etc. while importers have sought to classify these products under heading 2710 of the Schedule to the Customs Tariff Act. The Revenue is seeking to classify the same under heading 3405 of the schedule to the Custom Tariff Act. Previously the matter had reached Tribunal an....
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....roduct or raw material and was not, often „Put up for retail sale" as is the requirement laid down in HSN explanatory notes to CTH 3405 (2017 edition referred). The argument of the appellant that classification under chapter 3404 cannot be justified as the Fisher/Tropsch Technology was used and which excluded its classification under 3404 is a mutually accepted position and needs no discussion from us. 28. We are, therefore, of the view that a detailed examination about the nature of product, its usage and its proper classification based upon exclusion clauses of HSN explanatory note is warranted including of consideration of chapter 2712. In view of claim of product being in the nature of Slag wax, same needs elaborate discussion and findings from the authority below. The decisive usage required to be established by the department has to be predominant or common usage and not merely based on possibility as laid down by the apex court in 1996 (87) ELT 584 (S.C.) in CCE Vs. Hico Products (P) Ltd. We, therefore, allow the appeal by way of remand directing the adjudicating authority to determine the exact nature and usage of the product imported. While doing so, the riv....
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....t, 1962. 1.2 Other noticees who had cleared the goods from the bond similar proposals like that against PIIPL was made. Out of other noticees listed in the impugned order following have also filed appeal. List of appellants: 1 Agarwal Chemicals C/10491/2024 2 Ajanta Chemicals Ltd. C/10493/2024 3 Alwar Paraffin and Allied Products Pvt. Ltd. C/10505/2024 4 Amit Plasticizers C/10503/2024 5 B.G. Chemicals C/10488/2024 6 Balaji Palsticizers and Chemicals Pvt. Ltd. C/10519/2024 7 Budhiraja Polymers Ltd. C/10489/2024 8 Chloro Paraffin Industries C/10495/2024 9 Comepetent Polymers Ltd. C/10498/2024 10 Flowtech Chemicals Private Limited C/10502/2024 11 Gangotri Chlorochem Ltd. C/10518/2024 12 Grasim Industries Ltd. C/10492/2024 13 Haryana Chemicals C/10514/2024 14 Himchem Enterprises C/10517/2024 15 Kutch Chemical Industries Ltd. C/10487/2024 16 K.G. Industries C/10500/2024 17 Madan Chemicals Pvt. Ltd. C/10504/2024 18 Orient Micro Abrasive Limited C/10496/2024 19 Prayag Chemcials C/10494/2024 20 R.K. Chemicals ....
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.... nature of end products and not in the nature of raw material. v. The department has to conclusively bring on record the predominant usage of product to discharge the burden of classification. To justify classification under CTH 3405 the department need to show that product is essentially not in the nature of intermediate product and was often put up for retail sale. vi. The decisive usage required to be established by the department has to be predominant and common usage, and not merely based on possibility as laid down in CCE v. Hico Products Pvt. Ltd. 1996 87 ELT 584. vii. CESTAT remanded the appeal to determine the exact nature and usage of the product imported. 2.2 Ld Counsel also pointed out that a. The order of the Tribunal with above directions has been accepted by department as noted in para 36.2 of OIO. b. The Adjudicating Authority has changed the admitted position noted in CESTAT order that none of the products fall under 3404, and has classified some of the products under CTH 3404. He pointed out that it goes beyond the scope of SCN, as the SCN did not propose classification under CTH 3404. He pointed out that it also goe....
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....nt for Waksol A is 14% and for Waksol B, it is 9%. The oil content in other Waksol series products like Waksol 9-11A and Waksol 9-11B is bound to be more as they are produced by blending C9-11 (complete non-waxy oil range) with Waksol A and Waksol B respectively. These facts are reflected in Para 15 of current OIO as well as para 15 of previous round OIO, which is extracted in para 1 of remand order as well. 2.6 Learned counsel took us through the details of TEST reports referred in this case which are summarized below: Test Report Date Testing Agency Result Remarks Test Report dated 31.08.2015 (Para 4 of the OIO) The Chemical Examiner, Grade-I, Customs House, Kandla For Tank No. 205: It was reported that as facility of oil determination in petroleum wax is not available and the same may be referred to CRCL, PUSA, New Delhi Inconclusive Test Report Dated 13.10.2015 [Para 5 of the OIO] Chemical Examiner Grade-II, CRCL, New Delhi (i) samples for the goods stored in Tank No. 205 is a clear colourless oily liquid having a characteristic of wax and having mineral hydrocarbon oil content of 15%. (ii) The pour point of the sample is 16 degree centigr....
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....assification under 27129030 (Slack wax)/27129040 (Paraffin wax) (ii)testing authority is not a competent authority to determine the classification. (iii) Without any kind of testing of the product, the Joint Director has given his opinion Paraffin C9-C11 being a carrier and on classification. Test Report dated 24.07.2020 for Waksol 9-11A in the case of KLJ and relied by appellant. (referred in the table in para 10 of CESTAT remand order) Joint Director (NFSG), CRCL, New Delhi (i) The sample is composed of Paraffin wax with n paraffin. (ii) N Paraffin content (Oil) is 38.72% by Gas chromatography analysis. (iii) The sample is a mixture/preparation of paraffin wax and n Paraffin. (iv) to the query of the department that "Whether the product takes a polish when gently rubbed" has specifically replied in negative and stated that the imported product is in liquid form. - It is a mixture of wax and oil with oil content of 38.72% - Does not take polish when gently rubbed. 2.7 Learned counsel argued that based on the various test reports, manufacturing process as well as product literature referred in SCN, it can be concluded as below: a. The Waksol seri....
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....not accepted then in any case as a Paraffin wax containing by weight 0.75% or more of oil under 27129040. 2712 90 40 --- Paraffin wax containing by weight 0.75% or more of oil 2712 90 90 --- Other 2.9 Learned Counsel took us through the HSN explanatory notes to CTH 2712 and arguments of Learned counsel which read as under. HSN notes Remark by appellant (A) Petroleum jelly. ..................................... (B) Paraffin wax, microcrystalline petroleum wax, slack wax, ozokerite, lignite wax, peat wax, other mineral waxes, and similar products obtained by synthesis or by other processes, whether or not coloured. First part covers waxes obtained from natural route and second part covers waxes obtained by synthesis or by other processes, which are similar to waxes obtained through natural route. Paraffin wax is a hydrocarbon wax extracted from certain distillates of petroleum oils or of oils obtained from shale or other bituminous minerals. This wax is translucent, white or yellowish in colour and has a relatively marked crystalline structure. Microcrystalline petroleum wax is also a hydrocarbon wax. It is extracted....
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....ax, which acts as a plasticizer for manufacturing various end products. The product in question has been sold to manufacturers and certificates along with representative invoices were submitted before the adjudicating authority during remand proceedings. SION notified by central government under FTP also lists C10-C30 paraffins as a raw material for manufacture of Chlorinated Paraffin Wax. 2.12 Learned counsel argued that the product in question does not have even remote similarity with products of Tariff entry 34052000 which covers "Polishes, creams and similar preparations for the maintenance of wooden furniture, floors or other wood work" under which classification has been confirmed by adjudicating authority. It should also be noted that Tariff entry 34052000 does not cover "raw material for Polishes, creams etc.", whereas CTH 2712 specifically covers "raw material for Polishes, creams etc." In fact, CTH 3405, does not include the word "wax" anywhere in the description. As clarified in HSN, CTH 3405 covers end products, often put up for retail sale and thus cannot include products like Waksol 911A at all. 2.13 Learned counsel argued that CTH 3404 was never proposed in SCN....
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....04 is ruled out. Reliance was placed upon the following case laws: a. CC, Mumbai v. Toyo Engineering India Ltd., 2006 (201) E.L.T. 513 (S.C.) b. Ajanta Manufacturing Ltd. v. Commissioner of Customs, Kandla, 2019 (369) ELT 1067 (Tri. - Ahmd.) 2.15 Learned counsel argued that classification cannot be confirmed by citing stray online material. He relied on the decision in the case of Hewlett Packard India Sales (P.) Ltd. v. Commissioner 2023 (383) E.L.T. 241 (S.C.) (Para 14) 14. At the outset, we must note that the adjudicating authorities while coming to their respective conclusions, especially the Commissioner of Customs (Appeals) have extensively referred to online sources such as Wikipedia to support their conclusion. While we expressly acknowledge the utility of these platforms which provide free access to knowledge across the globe, but we must also sound a note of caution against using such sources for legal dispute resolution. We say so for the reason that these sources, despite being a treasure trove of knowledge, are based on a crowd-sourced and user-generated editing model that is not completely dependable in terms of academic veracity and can ....
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.... through the rival submissions as well as various case law relied upon by the appellant as well as department. We find that the appellants initially claimed goods under Tariff Heading 2710 as classification of the product in their Bills of Entry, but after being confronted with various evidence during investigation by DRI made alternate submissions for the product to be appropriately classified under Tariff Heading 2712, on the ground that the product cannot be classified under Tariff Heading 3405. We find that TH 3405, pertains to various end products and excludes waxes of heading 3404. Also the product is an Industrial Raw Material for manufacturer of another Industrial Raw Material i.e. Chlorinated Paraffin Wax and cannot be covered under Tariff Heading 3405 and that even explanatory notes to CTH 3405 (2017 edition) as well as the finding of the learned adjudicating authority, in para 45.2 point to the effect that Waksol 911-A, Waksol 911-B, is not exclusively used for Chlorination and can also be used for other purposes like Polishes, cream and similar preparations for the maintenance of wooden furniture, floors for other wooden work. The findings therefore only show the possib....
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.... analyst. If reliance is placed on HSN explanatory notes, the same should be contemporaneous to the period of import and not of any earlier or later edition. It is expected that proper referencing specifically of edition of HSN explanatory note should be done by the adjudicating authority. The question of penalties on various appellants who are part of the bunch are also likewise kept open and remanded to be consequent upon the outcome of classification decision and respective involvement. Appeals are allowed by way of remand with expectation to pass the decision in 3 months, considering the vintage of the dispute." The said order of Tribunal has not been challenged by revenue or the appellant. Therefore the following issues stand finalized i) The department has to conclusively bring on record the predominant usage of the product with evidence to discharge burden of classification. ii) To justify classification under 3405 department will need to show that the product imported was not essentially in the nature of intermediate product or raw material iii) The argument of the appellant that classification under chapter 3404 cannot be justified as....
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....00 - Scouring pastes and powders and other scouring preparations 3405 90 - Other: 3405 90 10 --- Polishes and compositions for application to metal including diamond polishing powder or paste 3405 90 90 --- Other The heading 2710 is not in contention anymore as the appellants also agree that the goods do not fall in that heading. 4.2 The revenue obtained the manufacturing process of these products obtained from M/s Sasol, South Africa. The manufacturing process of WAKSOL A was described as under: "Natural Gas is reformed into synthesis gas (syngas) which is in turn fed to Fischer Tropsch (FT) synthesis reactors. The manufacturing plant runs a low- temperature FT process using an Iron catalyst which converts the syngas into hydrocarbons and water. A primary separation process separates the synthesis products into (1) water (2) condensates (mainly hydrocarbons C3-C20) (3) reactor wax (mainly hydrocarbons > C20) (4) tail gas (syngas and C1-C3 hydrocarbons) Streams (1) and (4) are of no relevance to Waksol 9-11 production and are not discussed further. The condensates are distilled to remove any w....
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.... 20 Whether the product contain by weight 70% or more of petroleum oils or of oils obtained from bituminous minerals 21 Whether these oils are basis constituents of the preparations, containing bio diesel, other than waste oil 22 Chemical Composition & properties of the product (in percentage) 23 Usage 24 Any other remarks/suggestion regarding product's nature/ composition etc. The said parameters for testing were identified for the following reason in the test memo: "3. Since the above parameters are vital for further investigation and issuing alert notice on Modus Operandi on all India basis for the same product being imported at different ports. As it is well known facts that DRI has Pan India jurisdiction and cases booked by DRI have always all India ramification. Therefore, it is requested to submit the observation/comments as per the proforma tabulated hereinabove. Also ensure that in situation of unable to ascertain any parameters, please specify the same with reasons for inability" 5.2 In respect of test memo No. 57/2015-16 gave the following report: In respect of point No. 8, 9, 13, 15, 17, 18, 20 following was repeated: ....
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....ight 70% or more of petroleum oils or of oils obtained from bituminous minerals 12. Whether these oils are basis constituents of the preparations, containing bio diesel, other than waste oil 13.Usage 14.Any other remarks/suggestion regarding product's nature/ composition etc." Along with the test memo related literature issued by International Maritime Organization and others was also sent. The Chemical Examiner, Grade - II CRCL, New Delhi vide its test report dated 17.11.2015 with respect to the representative samples taken from Tank No. 113 reported that the sample under reference was composed of mineral hydrocarbon oil more than 70% by weight. The said report of CRCL Delhi was however rejected on the ground that the said samples in respect of test memo No. 60/2015-16 contained co-mingles cargo. The test report in respect of test memo No. 59/2015-16 is not fully eligible in the document presented before us but has been reproduced in the impugned order as follows: "The sample is in the form of clear colourless oily liquid. It has the characterstics of ws and having mineral hydrocarbon oil content (% by mass)=15.0. Aromatic conten....
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....-16 with request to test on following parameters: 1. Description of goods 2. Whether Dropping Point/drop Melting point is more than 40degree C. 3. Whether Viscosity is not exceeding 10Pa.s (or 10000 cp) when measured by rotational viscometry, at a temperature of 10 degree C above the dropping point 4. Whether product containing mineral substance or other materials other than wax 5. Whether it prepared waxes/wax preparation or otherwise 6. Whether it can be drawn into threads, above its melting point 7. Any other remarks/suggestion regarding product's nature/ composition etc. The said sample was obtained from tank No 205 of IMC Limited, the warehoused keeper. The test memo No. mentioned in the said letter dated 03.02.2016 is 59/2015-16 however that seems to be a clerical error as the test memo No. as per RUD 8 is 89/2015-16. Thereafter two more samples were drawn from the Tank No. 101 and 205 of IMC as the said tanks contained fresh import of Waksol 9-11A. Vide test memo No. 93 and 94/2015-16 both dated 22.02.2016, the samples were forwarded to Joint Director, Custom House Laboratory with following queries: ....
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....The CBIC circular No. 950, dated 01-08-2011 states that "The term 'Paraffins usually denotes a group of hydrocarbons containing Carbon atoms ranging from 1 to 30. As the Carbon atom number increases, Paraffins change from gaseous to liquid to solid forms. To illustrate the lowest of Paraffin methane which has one Carbon atom, is a gas at room temperature: 'Octane' which has eight carbon atoms is a liquid. Further Carbon atom number reaches 19 and till 30 they are solid with wax like characteristics." 3. The Manufacturer's literature and certificate of analysis issued by M/s intertek for the product u/r. i.e. Waksol 9-11 states that The % content of component with Carbon 8 i.e. Paraffin oil content is 0.7% and 0.6% respectively. 4. The oil content obtained by analysis carried out by ASTM D 721-and ASTM D3235 methods confirms this, i.e. the Petroleum oil is less than 70%, the Product u/r Waksol 9,11 does not falls under chapter 2710. 5. Further the Manufacturer's literature states that Waksol A and Co-C1 Paraffins are blended in Proprietary ratio to produce Waksol 9-11. 6. Also the General note to HSN for Chapter 34 states "The ....
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....er 2712 "Petroleum jelly, Paraffin Wax, Microcrystalline Wax, Ozokerite, Lignite Wax, Peat Wax, other Mineral waxes, and similar products obtained by synthesis or by other processes, whether or not colored" since the sample having congealing point Less than 30°C, (a) The congealing point of the products Petroleum Jelly, Petroleum Wax, Microcrystalline Petroleum Wax, Slack Wax and other waxes falling under Chapter 271210 to 270129090 should be more than 30°℃ (ASTM D 938) (b) Since the congealing point is one of the critical Parameter, as it is hot complies to standard value, other parameters like density at 70°℃, Work Cone Penetration Index at 25ºC (ASTM D 217), Cone Penetration at 25ºC (ASTM D 937) the set of Parameter mentioned in HSN Note for 27.12, are no need to carry out further. 4. As this sample is not any of the waxes falling under Chapter 271210 to 27129090 or not of Petroleum oils and oils obtained from Bituminous Minerals, preparation containing 70% or more than of Petroleum oils falling from 271012 to 27109900 and It is a blend/mixture of WAKSOL 'A', a synthetic Paraffin wax and Paraffin having Carbon ....
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....fied to suggest or ascertain classification of goods. In the case of EAST WEST EXPORTERS 1991 (52) E.L.T. 66 (Tribunal) the tribunal has observed as follows: 12A The Revenue in this appeal is mostly relying on the letter of the Chief Chemist. It has to be observed that the letter of the Chief Chemist reads more like an order on classification. Time and again, the Tribunal and Courts have pointed out that the chemical examiner has to only give his findings and results on the test carried out by him and not enter into a dialogue or exceed from that limit in expressing his opinion in the form of an order regarding the classification of the product. It is hoped that such exercises are avoided. In the case of HAZOOR SAHIB CHEMICALS P. LTD.2008 (226) E.L.T. 444 (Tri. - Ahmd.) the tribunal has observed as follows 6.5 The Chemical Examiner's report is admittedly against the importers. They have not asked for retest of the report. The submission that the Chemical Examiner should not have given the classification is relevant. The Chemical Examiner is required to give only the report on the chemical analysis conducted by him. Therefore, the suggestion about the classi....
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....warded to the concerned laboratory at the earliest. Further, the Commissionerates should develop a mechanism in consultation with the laboratories so as to get the test report expeditiously and preferably online. c. In cases where the time taken by laboratory exceeds three days, the importer should invariably be given an option to warehouse goods under section 49 of the Customs Act. d. Testing fee, if any, shall be paid by the importer or the exporter. 4. It is further clarified that aforementioned procedure shall not be applicable in cases where Partner Government Agencies themselves draw the sample. 5. In view of above, the Commissioners of Customs are requested to issue suitable Public Notice based on aforementioned guidelines, prescribing detailed procedures for empanelment of laboratories, techniques for drawing & dispatching of samples, mechanism to receive online reports etc., for guidance of all concerned. 6. Difficulty faced, if any, may be brought to the notice of the Board." In the table attached to the Circular No.43/2017-Cus dated 16.11.2017 following was prescribed in respect of 'Waksol 9-11 A': Sl No. Chap....
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..... Solvent C-9 15.C-9-C-11 Liquid Paraffin 16.C-14-C-20 N Paraffins 17.Petroleum Bitumen 60/70 18. Diesel Oil 19. Waksol 9- 11 A Grade 20. Thinner Off Spec 21. Waste Oil/Sludge Oil/ Sludge Water/ Bilge Water/ Stop Water/ Furnace Oil 1.NTPC Energy Technology Research Alliance (NETRA), NTPC Ltd. Address: Plot No. E-3 Ecotech-II, GreaterNoida, Gautam Buddha Nagar, Pin-201308, Uttar Pradesh 2. Central Coal Testing & Research Laboratory, Western Coalfields Limited Address Nara Nari, Road, kalpananagar, P.O. Uppalwadi Nagpur, Pin-440 026, Maharashtra 3. MSME Testing Centre, 65/1 GST Road, Guindy, Chennai, Pin - 600032, Tamil Nadu Three more labs were notified in the said circular for testing' Waksol 9-11 A'. It is only in 7.4.2019 that the Revenue laboratories were upgraded and facility of such testing was introduced. It can be seen from the test reports dated 31.8.15, 13.10.15 and 2.11.16 that JD Chemical Laboratory Kandla/ Delhi had advised revenue to approach other labs for the purpose of this testing due to their inability. The inability is apparent as the Labs in Kandla/ Delhi had failed to examine the goods on large number of parameters as ca....
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....t is extracted from petroleum residues or from vacuum-distilled lubricating oil fractions. It is more opaque than paraffin wax and has a finer and less apparent crystalline structure. Normally it has a higher melting point than paraffin wax. It can vary from soft and plastic to hard and brittle and from dark brown to white in colour. Ozokerite is a natural mineral wax. When purified it is known as ceresine. Lignite (or Montan) wax and the product known as "Montanpitch" are ester waxes extracted from lignite. They are hardand dark when crude, but may be white when refined. Peat wax is physically and chemically similar to lignite wax, but is slightly softer. The other mineral waxes of this heading (slack wax and scale wax) result from the de-waxing of lubricating oils. They are less refined and have a higher oil content than paraffin wax. Their colour varies from white to light brown. The heading also includes products similar to those referred to in the heading and obtained by synthesis or by any other process (e.g., synthetic paraffin wax and synthetic microcrystalline wax). However, the heading does not include high polymer waxes such a....
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....0℃. There is no reason for the said presumption. There is no such thing mentioned in the Explanatory Notes to Chapter Tariff Heading 2712. The HSN notes to Chapter Tariff Heading 2712 merely prescribes that to qualify as petroleum jelly one of the parameters necessary is that the congealing point should not be less than 30°C. Commissioner in his order relies on the observations of the Director. The report of the Joint Director CRCL does not refer to any authority and therefore cannot be accepted. It only refers to ASTM D 938 which is only a method of testing congealing point. There is no reason to come to presumption that for all other products unless the congealing point is more than 30°C, it would not fall under the said heading. The report of the Joint Director, Custom House Laboratory is obviously incorrect and has to be discarded. 6.3 The appellants had asserted before the Commissioner that the reliance cannot be placed on the opinion of Joint Director, Custom House and if any reliance is to placed on his opinion then cross examination should be given to the noticee. The said request of cross examination of Joint Director-CRCL was not accepted on the ground th....
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....dicated in DRI test memo No. 89/15-16, 94/15-16 and 95/15-16. Infact when the Joint Director gave his report dated 14.05.2019 many of the tests recommended by DRI were not done. In- fact all the test reports of tests that could be done earlier during 2015 to 2019 were available when he had given a non-committal report on 09.04.2019. The report of Joint Director is without any basis. In this background, the cross examination of the Joint Director becomes very relevant. It is noticed that the cross examination has been wrongly denied. The report of Joint Director, Custom House Laboratory needs to be rejected on this count also. 7 Heading 2712 is reproduced below: Tariff Item Description of article 2712 Petroleum jelly, paraffin wax, microcrystalline petroleum wax, slack wax, ozokerite, liginite wax, peat wax, other mineral waxes, and similar products obtained by synthesis or by other processes, whether or not coloured 2712 10 - Petroleum Jelly: 2712 10 10 -- Crude 2712 10 90 Other 2712 20 00 - Paraffin wax containing by weight less than 0.75% of oil. 2712 90 - Other: 2712 90 10 --- Micro-crystalline petroleum wax 2712 90 20 - L....
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.... Manufacture data Carriage Temperature (C) 40 Unloading Temperature (C) 40 MESG (mm) min 2.01 Calculated based on components in the mixure WAKSOL 9-11B Property Units Qual. Lower Value Upper Value References / Comments Molecular Weight Daltons ~ 112 910 Manufacture data Density @ 20℃ (kg/m3) =0.765 0.76 0.78 MSDS Flashpoint (CC) (°C) ~ 48 56 MSDS Boiling Point @ 101.3kPa (℃) ~ ≥130 ≤340 Measured Melting Point/ Pour Point (C) 2 23 49 Manufacture data Water Solubility @ 20℃ (mg/I) Insoluble Viscocity @20℃ (mPa.s) Highly viscous with wax particles Manufacture data Temp at which viscosity is 50 mPa.s (C) = 25 Vap. Press @20℃ (Pa) = ≥2.3 Manufacture data Autoignition Temp (C) = ≥232 MSDS Explosion Limits (%v/v) 2 ≥0.6 ≤7 Manufacture data Carriage....
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....ial products, e.g.," On the basis of above note, the Commissioner came to the conclusion that the chapter 34 is applicable to products mainly obtained by industrial treatment of fats, oils or waxes. This note does not say that all products obtained by the industrial treatment of fats, oils or waxes would be covered in this chapter. Thus reliance on this note is not proper. Again Fisher Tropsch process was not discussed. 10. Now we examine classification under CTH 2712. The impugned order places reliance on the exclusion clause of the Explanatory Notes to Chapter Tariff Heading 2712. The said exclusion clause refers solely to the alternate classification 3404. There is absolutely no mention of any exclusion from the heading 2712 going to the Chapter Tariff Heading 3405. The exclusion clause in explanatory notes of HSN to heading 2712 only takes some goods from CTH 2712 to heading 3404 and not to Chapter Heading 3405 as claimed by the revenue. The Chapter Tariff Heading 3404 specifically excludes the goods manufactured using Fischer Tropsh Process and classifies the same back in the heading 2712. The said explanatory notes to heading 3404 reads as follows: "This headin....
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....aksol C9-C11 and paraffin are blended in proprietary ratio to produce Waksol 9-11A which is a liquid at room temperature (20 deg.C). On the basis of above facts, the Commissioner has come to the conclusion that the said goods are not paraffin wax but are goods manufactured from paraffin wax. It has been held in the impugned order that blending of Waksol A/Waksol B that C9- C11 and paraffin results in a different product. The said product is called Waksol 9-11A and Waksol 9-11B depending upon the blending of the product. On the ground, he held that the said product are other than paraffin wax and not classifiable under heading 2712. The commissioner further held that from product data sheet of the manufacturer M/s Sasol South Africa, it is noticed that the oil content (% by mass) in Waksol A and Waksol B which are main component to be blended with C 9-C 11 n- paraffin in a proprietary ratio to produce Waksol 9-11A and Waksol 9- 11B are 14% and 9%. He holds that for classification of the goods under tariff item 27122000 paraffin wax should have oil content by weight less than 0.75% of oil and therefore, the goods are not classifiable under heading 27122000. On this ground he rejects ....
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....- Paraffin wax containing by weight 0.75% or more of oil kg. 10% -"; CTH 2712 in website of CBIC does not conform to the changes made by the Finance Act 2010 against the entry 2712 2000. Apparently the authorities failed to notice the entry 2712 2000 pertained to "Paraffin wax containing by weight 0.75% or more of oil". Therefore all mixtures of Paraffin Wax and mineral oil (less than 70%) are classifiable under heading 2712. The test report describes the goods as "Wax Preparation" (para 3.7.1) and classification 2712 2000 specifically covers "Paraffin wax containing by weight 0.75% or more of oil "meaning thereby that Wax containing oil in excess of 0.75% would fall under heading 27129040. In these circumstances the goods consisting of Wax mixed with oil would specifically fall under heading 2712. They would fall under 2712 2000 if the oil content is less than 0.75% and 2712 9040 if the oil content exceeds 0.75%. In case of Waksol 9-11 A & B, the oil content is more than 0.75% therefore the appropriate heading would be 2712 9040. 12. The remand order of Tribunal has specifically asked the adjudicating authority to examine the usage of the goods imported. The appella....
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....eedings, we are of the view that since classification made in the assessment order was not proposed in the Show Cause Notice, the said order cannot go beyond the scope and ambit of the Show Cause Notice and should only confine to the findings, whether the proposals made in the Show Cause Notices for different classification should sustain or not. Since the Adjudicating Order had entirely changed the classification of the product, as proposed in the Show Cause Notice from 6914 90 90 to 6909 90 90, without issuing any notice to the appellant, we are of the view that differential duty confirmed under the changed classification should also not stand for judicial scrutiny. Accordingly, it is held that the impugned order confirming the differential duty is not proper and justified." In case of Toyo Engineering India Limited 2006 (201) ELT 513 (SC) following has been held: "16. Learned counsel for the Revenue tried to raise some of the submissions which were not allowed to be raised by the Tribunal before us, as well. We agree with the Tribunal that the revenue could not be allowed to raise these submissions for the first time in the second appeal before the Tribunal. Neither ....
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....rgument being that more important criteria is the tariff and the HSN. Thus, the order fails to bring out any positive evidence of the use of goods as polish falling under CTH 3405. 13.1 The appellants have also relied on the test report of Waksol 9-11 A in case of another importer, namely KLJ Resources Ltd. The test memo reads as under Test Memo No, & date 18/2019-20 Declared Description of Goods Waksol 9-11A Grade Marks on Representative Samples C-2 Date of Drawl of Representative Samples 08.08.2019 under Punchnama drawn at Adani Hazira Port, hazira, Surat from Tank No. T-98 Name of Importer (M/s) KLJ Resources Ltd. Name of CHA (M/s) Rishi Kiran logistics Pvt. Ltd. Bill of Entry No & Date 4273986 dated 29.07.2019 Test queries/request for Testing of the samples for/to ascertain i. What is the composition of product ii. Whether the product obtained by the Industrial Treatment of fats, oils or waxes iii. Oil content (%by weight) iv. Whether the product is mixture of separate chemical compounds v. What is the dropping point of product vi. What is viscosity of product measured by rotational viscometer at a tempe....
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.... (xi) The product is Oily liquid (xii) May be ascertained at your end (xiii) & (xiv) : The details are mentioned above: As per above parameters tested here, technical literature available/ supplied, the sample under reference is a Mixture / Preparation of Paraffin wax with n Paraffins." From the above report it is apparent that to question (x) on the test memo (X) Whether the product takes a polish when gently rubbed The reply of the Laboratory is "No, it is in liquid form".This is a requirement for classification under heading 3404 in terms of Explanatory Notes reproduced above. Explanatory notes also prescribe that Dropping Point should be above 40 °C. The test report is silent on that aspect. Thus it is apparent that the product 'Waksol 9-11A' fails a specific requirement for classification heading 3404. The test report also asks the Lab the following question (xii) Usage of product whether the product can be used in polishes, creams and similar preparations for footwear or leather or maintenance of wooden furniture floors of other woodworks or coachwork, sourcing pastes and powders and other scouring preparations? ....
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.... but of the Explanatory Notes to HSN. In these circumstances, we cannot say that the appellants cannot have a bonafide view regarding the classification of goods. Thus, extended period of limitation cannot be upheld. There was no mis-declaration or attempt to suppress and therefore the extended period of limitation cannot be invoked. These views are supported by the following case lawcited by the appellant and referred to in para 2.15 above. "14. At the outset, we must note that the adjudicating authorities while coming to their respective conclusions, especially the Commissioner of Customs (Appeals) have extensively referred to online sources such as Wikipedia to support their conclusion. While we expressly acknowledge the utility of these platforms which provide free access to knowledge across the globe, but we must also sound a note of caution against using such sources for legal dispute resolution. We say so for the reason that these sources, despite being a treasure trove of knowledge, are based on a crowd-sourced and user-generated editing model that is not completely dependable in terms of academic veracity and can promote misleading information as has been noted by....
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.... if the goods were available. The ratio of the above decision cannot be understood that in all cases the goods were permitted to be cleared initially and later proceedings were taken for under-valuation or other irregularity, even then redemption fine could be imposed. We are, therefore, not inclined to accept the contention raised by the appellant on this issue and set aside the redemption fine. 13 The reliance of learned counsel for the revenue upon the provisions of Section 125 of the Act is also misconceived. Section 125 of the Act is applicable only in those cases which have been cleared by the concerned authorities subject to furnishing undertaking/bond etc. However, in the present case, admittedly, the goods were cleared by the respondent-authorities without execution of any bond/undertaking by the assessee. Thus, in view of the fact and circumstances of the case, we find no error in the impugned orders. No substantial question of law arises for our determination in the present appeal and same is hereby dismissed." (emphasis supplied.) 10. We have also particularly noted a decision of the Tribunal (cited by the learned advocate) which stands upheld by th....
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....een observed: "5. It is seen that the impugned order has directed classification of the goods as finished products even though, admittedly, the machines had not been imported in its complete form. Nevertheless, the provisions of Rule 2(a) of General Interpretative Rules for the Schedule in the Customs Tariff Act, 1975 itself deem that the classification of the goods shall be governed by the following principles of which - '2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished articles has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled.' from which, it would appear even though the goods are not presented in the final form for the purpose, rate of duty as finished goods should be applied. It is also not the case of the customs authorities that there has been a misdeclaration of the finished products. The obligation of t....
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.... hasis constituents of the preparationa. containing bio diesel, enher than waste of Could not ascertain 19 Chemical Composition & properties of the product (in percentage? Composed of mineral hydrocarbon oll and Wax 20 Bnd uae may be sicertains uit jour cm 21 Any other remarks/suggestion regarding product's natural composition ale NA Paisley for determination of ail content in petroleum was is available in CRCL, Puss, New Delhi. SR/R ( Scaled Remet 021/8/15 Chemical Beamtner, Gr-S Document 2 Intertek Commodities CERTIFICATE OF ANALYSIS Page 1 of 1 ANIME300 12:00 Vote Caridison TEST DESCRIPTION SPECIFICATION RESULT PASLES - AT. ... METHOD ABYM CASTS "ASTH MH ATM DIDSE ARTM 193 CARBON DISTRIBUTION GC OC OC SANAS ACCREDITED TEST . REFERENCE METHOD > 1 7 Testuical Signatney -------- --...... ------- (sanas -- -- Document 3 DIN No. 20210271ML.0000612455 sasOL product data sheet WAKSOL 9-11 Cnước 1450 9 Osinher 2012 Properties Test method Unas Specification Typlal values ASTM D W --- -à - HOẠT 021:0330 19.7 27.3 ANTM....