TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 1691
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....nil 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 and the case was remanded vide CESTAT Final Ord....
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.... 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 rival claims shall be considered including that of chapter 271....
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.... 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 C/10513/2024 21 Sapphire Industrial Products Pvt Ltd. C/10511/2024 22 Shanti Chemicals C/10516/2024 23 Shiva Exim Enterprises C/10499/2024 24 Shivtek Industries Pvt. Ltd. C/....
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....uct 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 goes beyond the scope of remand order. c. The direction of the Tribunal has been framed correctly in para 42 of OIO, yet none of the directions of Tribunal has been adhered to and the OIO has been passed in utter disregard to observations / directions of the Tribunal. In para 50 & 51, adjudicating Authority go....
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....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 centigrade and flash point of 55 degree centigrade (iii) the sample under reference may be forwarded to Indian Institute of Petroleum, Dehradun. Paraffinic Oil Content less than 70%. For other testing parameters the sample was never forwarded to Indian Institute of Petroleum, Dehradun for further testing. Test Reports Dated 02.11.2016 (para 9 of the OIO] Joint Director, Customs House ....
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....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 series products are colorless oily liquid at room temperature. They are composed of 'N-Paraffin below C18 (Oil) and `N-Paraffin above C18 (wax). Thus they are mixture of paraffin oil and paraffin wax and spread over 'below C18' as well as 'above C18', where oil content varies from 9% to 38.72%. [Though what is oil and what is wax is not defined in statute, test reports treat 'N-Paraffin below C18 as (Oil) and N-Paraffin....
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....te 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 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 "Montan pitch" are ester waxes extracted from lignite. They are hard and dark when crude, but may be white ....
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....ns 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, but it is to put on record that artificial waxes and prepared waxes are included in CTH 3404.By virtue of note 5 of Chapter 34 as well as HSN notes, synthetically produced waxes of heading 27.12, (e.g., Fischer- Tropsch waxes consisting essentially of hydrocarbons.) are specifically excluded. Chapter Note 5. In heading 3404, subject to the exclusions provided below, the expression "artificial waxes and prepared waxes" applies only to: (a) chemically produced organic products of a waxy character, whether or not water-soluble; (b) products obtained by mixing different wax....
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....o 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 this court on previous occasions also [Commissioner of Customs, Bangalore v. Acer India (P) Ltd. - (2008) 1 SCC 382, para 17 = 2007 (218) E.L.T. 17 (S.C.) = 2007 taxmann.com 219]. The courts and adjudicating authorities should rather make an endeavour to persuade the Counsels to place reliance on more reliable and authentic sources. 2.16 Ld counsel argued that extended period of limitation cannot be invoked, goods cannot be confiscated and penalty cannot be imposed. He relied on the following case laws: i. Northern Plastic Ltd. v. Commissioner [1998 (101) E.L.T. 549 (S.C.)] [Para 23] ii. O.K. Play (India) Ltd. v. Commissioner [200....
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....vered 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 possibility and do not conclusively decide the nature of the product or its classification as the product literature and material on record shows that Waksol products are used in Chlorination and therefore do not appears in the nature of product of Tariff Heading 3045. We find that simply some alternate usage existing of the product or the possibility of their being used as such, will not make the product of the nature specified in Tariff Heading 3405 specifically when product used and specified in Tariff Heading 3405 are in the nature of end products and not in the nature of raw- materials. The department has to conclusively bring on record the predominant usage of the product with evidence to discharge burden of classification. Furthe....
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....ized 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 the Fisher/Tropsch Technology was used and which excluded its classification under 3404 is a mutually accepted position and needs no discussion from us. The impugned order records that the imported products contains less than 70% by weight of Petroleum oils or of oils obtained from bituminous material and therefore, the same cannot be classifiable under heading 2710 as originally claimed by the appellant in the import documents. It is seen that the appellant had claimed that the correct classification of the product is neither 2710 as claimed by them in the import documents nor 3405 as claimed by the Revenue in the show cause notice. The claim of the appellant is that correct classification of the product is 2712. It is seen that in the remand order a direction was....
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....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 wax and then hydrogenated to remove unsaturation and small amount of oxygenates present in the condensate. This stream is then distilled further to produce a number of paraffinic products which includes C9-C11, C10-13 and C14-20 n-paraffins The reactor wax is distilled into a number of fractions, the lightest being Waksol A which mainly consists of (Oxidized Paraffins) hydrocarbons in the C16-C22 range. As its melting point is typically 26-28 deg. C. Waksol A and C9-C11 n-paraffin are blended in a proprietary ratio to produce Waksol 9-11A which is a liquid at room temperature (20 deg. C)." The literature of product Waksol 9-11A provided by the supplier manufacturer indicated that it is produced by blending Waksol A and C9- C11 Paraffins in proprietary ratio. However as per appellant correct manufacturing process is reflected in para 21 of impugned order. 5.1 The goods imported by M/s PIIPL were sto....
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....2015-16 gave the following report: In respect of point No. 8, 9, 13, 15, 17, 18, 20 following was repeated: Sr. No Query asked Result 8 Wax content, % mass Could not be ascertain 9 Oil content, % mass Could not be ascertain 13 Whether product is mixture of n-Alkane (c9-11) and paraffin wax or otherwise, please specify the percentage separately? % of carbon chain testing facility is not available in this laboratory Distillation Range 137°C- 340℃ (90% recover) 15 Whether product is chemically modified or artificial wax or otherwise? Could not be ascertain 17 Whether the product contain by weight 70% or more of petroleum oils or of oils obtained from bituminous minerals Facility for oil determination in petroleum wax is not analysis in this lab 18 Whether these oils are basis constituents of the preparations, containing bio diesel, other than waste oil Could not ascertain 20 Usage End use may be as certain at your end It is noted that the laboratory had expressed its incapability to test a lot of relevant parameters of the product. The said report also prescribed that facility of determination of oil content in petroleum is available in CRCL Pusa, N....
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....eg. C Flash Point (RMCC) = 55 deg. C Actual use may be ascertained. To answer other queries raised in the test-memo, the sample under reference may be forwarded to India Institute of Petroleum, Dehradun, if required." It is seen that even CRCL New Delhi also do not have answers to most of the queries as they lack the facility for proper testing and advised DRI to approach Indian Institute of Petroleum, Dehradun for the said purpose. 5.4 On 03.02.2016, DRI wrote a letter to the Joint Director enclosing therewith literature running into 66 pages. The text of the letter is as follows: "Please refer to sample of Import goods of declared description "WAKSOL 9-11 A" forwarded to your lab for testing vide Test Memo No. 57/2015-16, in respect of which your lab had given opinion in respect of some queries, but in respect of remaining queries, had shown Inability to ascertain vide Report No DRI 09 dated 31.08.2015. Thereafter, the said samples were forwarded to CRCL, New Delhi vide Test Memo No 59/2015-16. CRCL, New Delhi vide the Test Report C. No. 35- CRCL/2015/CL-401 DRI/14.09.2015 dated 13.10.2015 had given opinion in respect of only some of the queries. Further, please also re....
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....eg;C. 6. Whether viscosity is not exceeding 10pa.s(or 10000cP) when measured by rotational viscometry, at a temperature of 10℃ above the dropping point 7. Whether product containing mineral substance or other materials other than wax 8. Whether it prepared waxes/ was preparation or otherwise. 9. Whether it can be drawn into threads, above its melting point 10. Any other remark/suggestion regarding product's nature/ composition etc. 5.6 The test report in respect to of all three samples are summarised as follows in the impugned order: S. No. Tank No. Test Memo No. & Date Report No. & Date of CHL, Kandla Test Results/ Report 1 205 89/2015-16 dtd 03.02.16 DRI-37 dtd 02.11.16 The sample is in the form of colourlessoily liquid, composed of paraffinic compound. Test conduct with solvent/ solvent mixture as per ASTM D-721-02 and ASTM D-3235-02 does not show any oil separation. Hence, the sample may be considered as wax preparation. 2 101 93/2015-16 dtd 22.02.16 DRI-45 dtd 02.11.2016 The sample is in the form of colourlessoily liquid, composed of paraffinic compound. Test conduct with solvent/ solvent mixture as per ASTM D-721-02 and ASTM D-3235-02 doe....
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....ition of Paraffin as per Circular No. 950 dated 01.08.2011 of CBIC. The said report relies on the literature and Certificate of analysis issued by M/s Intertek for the product Waksol 9-11 to the effect that the percentage content of carbon- 8 i.e. paraffin oil is 0.7% and 0.6% respectively. The letter also clarifies that as per the test carried out by ASTM D 721 and ASTM D 3235 methods, the petroleum oil was found to be less than 70% and therefore, the goods do not fall under Chapter heading 2710. Based on the said facts, the letter comes to the conclusion that Waksol 9- 11 is a preparation / blend of -Waksol A (hydrocarbons C14-C28) and C9-C11 Paraffin. It can be seen that the said report does not throw any light on the subject. It describes the product as preparation/ blend of Waksol A. While the earlier report, described the product as "Waksol Preparation". It is seen that despite repeated requests the CRCL failed to throw any light on the nature of product except to say that it is a "wax preparation" or a preparation consisting of "Waksol A' mixed with other paraffins". It is seen that this is the description given by the importers as well. 5.8 It appears that another lett....
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....r." This letter of Joint Director, Custom House Laboratory is the primary ground for change in classification. It is seen that the said letter of Joint Director in para 2 holds that the goods are not classifiable under heading 2710. This is agreed by both sides. In para 3 of the said letter it comes to the conclusion that the goods are not classifiable under Chapter heading 2712 on the ground that the congealing point is less than 30 °Celsius. The letter states that the said parameter is written in the HSN notes in Chapter heading 27.12 and therefore no need to carry out any other test. In para 4 of the said letter, he comes to the conclusion that the goods are classifiable under Heading 3405.20. The said letter of Joint Director, Customs House Kandla has been examined and is referred to in para 11 of the show cause notice as well as para 39.5 of the impugned order as the primary reason for excluding the goods from the heading 2712. Thus it is seen that this letter of Joint Director, Customs House Kandla is the main reason for excluding the goods from the heading 2712 and classifying under CTH 3405. 5.9 The summary of tests conducted by the revenue labs indicated the followin....
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....n Circular No. 43/2017-Cus dated 16.11.2017. In the said circular the Revenue authorities have been advised to approach other specified labs listed in the table attached to the said circular. The relevant text of the circular is as follows: "It has come to the notice of the Board that due to lack of testing facilities of certain goods in Revenue Laboratories, there is delay in clearance of the consignments of these goods due to avoidable movement of samples between Customs field formations and Revenue Laboratories. 2. In this regard, CRCL has shortlisted the items whose samples cannot be tested in their Laboratories at present and also identified the Laboratories functioning under the other Ministries/Departments/Organizations where such samples could be tested. The list of such items and corresponding testing Laboratories are annexed herewith. 3. The Revenue Laboratories are, presently, in the process of up-gradation. However, until Revenue Laboratories are upgraded, as a measure of trade facilitation, the Board has decided that field formations may directly forward samples of goods mentioned in column (3) of the Annexure I of this circular, to the laboratories mentioned in ....
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....c Sector Undertaking of the Government India, under the Ministry of Coal), Gondwana Place Kanke Road, Ranchi - 834 031, Jharkhand, India, Phone: (+91) 651 2231850/51/52/53, Fax: (+91)651 2231447/223082 21. Solvent C- 9 Indian Institute of Petroleum (IIP), Dehradun (under Ministry of Science & Technology) CSIR - IIP, Dehradun 248 005 Email: [email protected], Phone : 0135 2525743, 2660124, Fax: 0135 2660202 22. C-9-C-11 Liquid Paraffin IOCL (R & D Centre), Faridabad (under Ministry of Petroleum) GM (Technology Promotion, Forecasting & Pipeline Research), Indian Oil Corporation Limited, R&D Centre, Sector 13, Faridabad 121007. E Mail: [email protected] 23. C-14-C-20 N Paraffins IOCL/HPCL/BPCL, Mumbai, Chennai, Kochi, Vizag, Kolkata, Kanla (under Ministry of Petroleum) 24. Petroleum Bitumen 60/70 25. Diesel Oil 26. Waksol 9- 11 A Grade Same as above Same as above Same as above 27. Thinner Off Spec Central Pollution Control Laboratories (CPCB) (Under Ministry of Environment) Ministry of Environment, Forest & Climate Change Government of India, Parivesh Bhavan, CBD-cum-office complex East Arjun Nagar, Delhi 110032 India,....
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....d as follows: "(A) Petroleum jelly. Petroleum jelly is unctuous to the touch. It is white, yellowish or dark brown in colour. It is obtained from the residues of the distillation of certain crude petroleum oils or by mixing fairly high viscosity petroleum oils with such residues or by mixing paraffin wax or ceresine with a sufficiently refined mineral oil. The heading includes the jelly, whether crude (sometimes called petrolatum), decolourised or refined. It also covers petroleum jelly obtained by synthesis. To fall in this heading petroleum jelly must have a congealing point, as determined by the rotating thermometer method (ISO 2207 equivalent to the ASTM D 938 method), of not less than 30 ºC, a density at 70 °C of less than 0.942 g/cm3, a Worked Cone Penetration at 25 °C, as determined by the ISO 2137 method (equivalent to the ASTM D 217 method), of less than 350, a Cone Penetration at 25 °C, as determined by the ISO 2137 method (equivalent to the ASTM D 937 method), of not less than 80. This heading does not, however, include petroleum jelly, suitable for use for the care of the skin, put up in packings of a kind sold by retail for such use (heading 33.....
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.... resins, mineral substances or other materials, provided they have a waxy character." A perusal of the Explanatory notes makes it clear that it divides the Chapter Tariff Heading 2712 into two broad sections. A) Petroleum Jelly and B) Paraffin Wax, microcrystalline petroleum slack wax etc. The section (A) Petroleum Jelly and said section of the Explanatory Notes prescribes as follows: "to fall in this heading petroleum jelly must have a congealing point, as determined by the rotating thermometer method (ISO 2207 equivalent to the ASTM D 938 method), of not less than 30℃." There is no such requirement given in respect of products other than "petroleum jelly" in the said Explanatory Notes. The sole reason for excluding the goods from the scope of Chapter heading 2712 is the fact that the congealing point in the sample was found to be less than 30℃. The Joint Director, Custom House Laboratory failed to notice that the requirement of congealing point is solely for petroleum jelly and not for other products like Paraffin wax, micro crystalline petroleum wax, slack wax etc. It can be under Section (B) of the HSN Explanatory Notes to Chapter heading 2712 reproduced above. ....
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....f 'Baba' supports the opinion of the Chief Chemist, which cannot be dismissed lightly. As such, we hold that reference and reliance to the said test report of Chemical Examiner cannot be faulted upon. Further, though the chemical examiner has opined on the correct classification, which may not be within his jurisdiction, we note that Commissioner has primarily gone by the test report of the chemical examiner and has not adopted his opinion on classification straightaway without discussing the ingredients etc. and the two entries in the Excise Tariff. He has independently examined the issue and such contention even if accepted, does not tilt the case in favour of the assessee." On the strength of above decision and findings, the impugned order reaches the conclusion that no new fact is likely to emerge by the cross examination of the Joint Director-CRCL and therefore the request of cross examination was denied. We find that the CRCL has repeatedly indicated their inability to examine /test these goods. Para 3.4, 3.4.1., 3,5, 3.6 and 3.7 above provide ample evidence of this. In fact the Circular No. 43/2017-Cus dated 16.11.2017 and Circular No. 11/2018- Cus dated 17.05.201....
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....ontent is less that 0.75% the it would be classifiable under CTH 2712 2000 and if the oil content is more that 0.75% the it would be classifiable under CTH2712 9040. It is seen that the goods are covered specifically by these headings. In order to take it out of CTH 2712 it has to be shown that the alternate heading is more specific. 8. The Revenue have also relied on the product data sheet. The product data sheet is reproduced below: 8.1 Revenue also obtained the details of the physical properties of the said product from the office of Director General of Shipping. The physical properties of the said product were detailed in the PPR Product data Reporting Form received from Directorate General of Shipping, Mumbai in following terms: WAKSOL 9-11A :- Property Units Qual. Lower Value Upper Value References / Comments Molecular Weight Daltons ~ 112 532 Manufacture data Density @ 20℃ (kg/m3) =0.765 0.76 0.78 MSDS Flashpoint (CC) (C) ~ 48 56 MSDS Boiling Point @ 101.3kPa (C) 2 ≥130 ≤340 Measured Melting Point/ Pour Point (℃) 2 23 49 Manufacture data Water Solubility @ 20℃ (mg/I) Insoluble Visco....
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.... 9- 11B were blended / mixture and contained n-alkanes (C9-C11) and Paraffin Wax. From the above facts, he concluded that since the oil requirement for the purpose of classification under heading 2710 is a minimum of 70%, the said product could not be classified under heading 2710. 8.4 The observations in para 8.1, 8.2 and 8.3 above only relate to exclusion of classification from the Chapter Tariff Heading 2710 on the ground that the goods do not contain more than 70% mineral oil. The appellants are not contesting classification under CTH 2710. They did not contest it even earlier when the matter was remanded. Even in remand the direction was to examine classification under Chapter Tariff Heading 2712 and not under Chapter Tariff Heading 2710. 9 The Commissioner, relies on the opinion of JD Custom House Lab Kandla letter dated 19.4.2019 for reliance on the following general note to Chapter 34 of HSN : "GENERAL This Chapter covers products mainly obtained by the industrial treatment of fats, oils or waxes (e.g., soap, certain lubricating preparations, prepared waxes, certain polishing or scouring preparations, candles). It also includes certain artificial products, e.g.," On ....
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.... heading and obtained by synthetic or by any other process (e.g. synthetic paraffin wax, synthetic microcrystalline wax). In the instant case, the Waksol A is generated by a synthetic process from various gases and therefore, merits inclusion in heading 2712. The CRCL opinion also states that Waksol 9-11A is a synthetic Paraffin Wax. 11. The appellant had urged before the Commissioner that the product is obtained from synthetic route by Fischer Tropsch process where starting material is natural gas reformed into synthesis gas. After the fischer tropsch process, the synthetic gas is distilled to get paraffinic hydrocarbons. It was contended that the imported product is a mixture/ preparation of paraffin hydrocarbons. It was contended that Waksol 9- 11A is a mixture n-paraffin below C 18 which is the oil content and N paraffin above C 18 which is the wax content. The product is composed of 100% paraffin of different molecular weight and rightly classified under Custom Tariff Heading 2712. Learned commissioner has argued that use of Fischer Tropsch process ends upon the manufacturing of Waksol A/ Waksol B only. Thereafter Waksol C9-C11 and paraffin are blended in proprietary ratio to....
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....e customs Tariff on the webpage of CBIC website reads as follows: It is seen that the description of tariff item 2712 90 40 is exact copy of the tariff item 2712 2000. This is obviously an error. 11.2 Finance Act, 2010. Introduced following changes in Customs Tariff. "(2) in Chapter 27, - (a) for sub-heading 2712 20 and tariff items 2712 20 10 and 2712 20 90 and the entries relating thereto, the following tariff item and entries shall be substituted, namely : - Tariff Item Description of goods Unit Rate of duty Standard Preferential (1) (2) (3) (4) (5) 2712 20 00 - Paraffin waxcontaining by weight less than 0.75% of oil kg. 10% - (b) after tariff item 2712 90 40 and the entries relating thereto, the following tariff item and entries shall be inserted, namely :- Tariff Item Description of goods Unit Rate of duty Standard Preferential (1) (2) (3) (4) (5) "2712 90 40 --- 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 no....
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....le with partial access shows the product type as Waksol Chemical composition of the product shows as 'Fischer Tropsch Unmicronized Wax'. The page also shows as physical form as powder not liquid. The comparison between 'SasolwaxWaksol A' and Waksol 9-11 or Waksol 9-11B is not proper as it is not established that both of them are same products. 12.1 The impugned order classifies the product Waksol A under Customs Tariff Heading 3404. It is seen that the Show Cause Notice does not make any charge for classification of any goods under Customs Tariff Heading 3404. Even in the earlier proceedings before the Tribunal, wherein remand order was issued, there was no claim made for classification under CTH 3404. In case of Ajanta Manufacturing Ltd. 2019 (369) ELT 1067 following has been observed: "5.2 With regard to the other issue i.e. change in classification of the subject goods during the course of adjudication proceedings, 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 pr....
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.... (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. " The fact that the HSN to CTH 3405 prescribes that these goods are often sold in retail implies that the goods under CTH are not in the nature of raw materials but in the nature of finished goods like polishes. The appellants have produced evidence in the shape of statements of consumers that the goods are used for manufacture of chlorinated paraffins. The SION norm also includes C10-C30 as an input for manufacture of chlorinated paraffins. No evidence of actual use as polish has been produced while substantiated evidence of its use as raw material for manufacture of chlorinated paraffins is available. The impugned order holds that the 'use' of goods for manufacture of chlorinated paraffin wax is not a decisive consistently. His argument 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, namel....
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....(by GC) (Wax) 61.28 Above 30% 4 Distillation characterstics IBP 164℃ 5% recovery 171℃ 30% recovery 320℃ 90% recovery 357ºC 92% recovery 369℃ The pointwise reply is as under :- (i) The sample is composed of paraffin wax with n Paraffins (ii) No comment (iii) N Paraffin content (Oil) is 38.72% By Gas chromatography analysis (iv) The sample is a mixture / Preparation of Paraffin and n Paraffin (v) Not applicable (vi) Not applicable (vii) The sample is hazy at 20℃ (viii) The product is soft mass at 20℃ (ix) No, it can no be drawn into threads (x) No. it is in liquid form (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".Thi....
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....er CTH 3405. 14. We also note that the extended period of limitation has been invoked. It is seen that the appellants have described goods as Waksol 9-11A, Waksol 9-11B, Waksol A or Waksol B. It is seen that even CBIC in Circular dated 16.11.2017 and 17.05.2018 had described the goods as classifiable under Chapter 27 (see para 6.1 above). It is seen that the term is well known as can be seen from the fact the even DG shipping has all the relevant particulars available to him. As can be seen from above discussion, the matter relates to classification and is very complex in nature. It requires not only significant understanding of chemistry 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 concl....
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....rcumstances, the Hon'ble Apex Court held that the mere fact that the goods were released on the bond being executed would not take away the power of custom authority to levy redemption fine. A reading of the judgment/order of the Hon'ble Apex Court in M/s. Weston Components Ltd. v. Commissioner of Customs, New Delhi (supra), would show that the Apex Court has taken the view that redemption fine can be imposed even in the absence of the goods as the goods were released to the appellant on an application made by it and on the appellant executing a bond. Since the goods were released on a bond the position is as 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 case....
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....impossability of fine under Section 125 of the Customs Act in lieu of confiscation of goods not available for confiscation would not be applicable where the similar question arises as to whether a fine could be imposed under Rule 25 of the Central Excise Rules, 2002 (read with Section 34 of the Central Excise Act) in lieu of confiscation of excisable goods not available for confiscation." There is no case of misdeclaration by appellants. The dispute relates to the interpretation of classification. In the case of SATRON 2020 (371) ELT 565 (Tri.) following has been 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....