2002 (7) TMI 625 - AT - Customs

Summary

Issues Involved:
1. Whether the exemption from payment of duty under Notification No. 19/94-Cus., dated 1-3-94 provided to Kerosene is available to Aviation Turbine Fuel (ATF) imported by the appellant.

Issue-wise Detailed Analysis:

1. Interpretation of Notification No. 19/94-Cus. and Definition of Kerosene:
The appellant argued that ATF should be considered as Kerosene under Notification No. 19/94-Cus. because it meets the technical specifications outlined in the notification. The notification exempts Kerosene falling under Heading 27.10 of the Customs Tariff Act, defined as any hydrocarbon oil with a smoke point of 18 mm or more and ordinarily used as an illuminant in oil burning lamps. The appellant cited various sources, including the Encyclopaedia Britannica and IS 1571:1992, to support that ATF is a superior form of Kerosene and meets these criteria. They also referenced the Supreme Court's interpretation of "ordinarily" in Kailash Chandra v. Union of India, 1962 SCR 374, to argue that ATF's use as jet fuel does not exclude it from being classified as Kerosene.

2. Counterarguments by the Departmental Representative:
The Departmental Representative countered that in common parlance, ATF is not referred to as Kerosene and is not used as an illuminant in oil burning lamps. He emphasized that the wording of the notification is specific and clear, and historical context from earlier notifications where Kerosene and ATF were mentioned separately supports the distinction between the two products. He also argued that the Supreme Court's interpretation of terms in administrative matters does not apply to tax statutes, which should be interpreted based on their popular meaning as understood by users of the product.

3. Legal Precedents and Board's Circulars:
The appellant relied on the Larger Bench decision in CCE, Bombay v. Reliance Industries Ltd. and the Tribunal's decision in CCE v. IPCL Ltd., which discussed the classification of hydrocarbon oils under the Central Excise Tariff. However, the Departmental Representative pointed out that these cases involved different issues, specifically the classification of heavy normal paraffins, and did not directly address the exemption under Notification No. 19/94-Cus. The Board's Circular No. 562/58/2000-CX, dated 8-12-2000, was also cited by both parties, but the Tribunal found it irrelevant to the present case as it dealt with a different context related to the Public Distribution System.

4. Tribunal's Findings:
The Tribunal concluded that for the exemption under Notification No. 19/94-Cus. to apply, the product must be a hydrocarbon oil with a smoke point of 18 mm or more and ordinarily used as an illuminant in oil burning lamps. The appellant failed to provide evidence that ATF is used as an illuminant in oil burning lamps. The Tribunal emphasized that exemption notifications must be construed strictly, and any ambiguity should benefit the state, as established by the Supreme Court in Novopan India v. CCE, Hyderabad and Liberty Oil Mills Ltd.

Conclusion:
The Tribunal found no reason to interfere with the impugned order and rejected the appeal, holding that ATF does not qualify for the exemption under Notification No. 19/94-Cus. because it is not ordinarily used as an illuminant in oil burning lamps.