2003 (6) TMI 301 - AT - Central Excise

Summary

Issues:
Classification of Light Aluminium Rolling Oil (LARO) under sub-heading 2710.29 or 2710.99 of the Central Excise Tariff Act.

Analysis:
The main issue in this appeal before the Appellate Tribunal CESTAT, NEW DELHI was the classification of Light Aluminium Rolling Oil (LARO) under the Central Excise Tariff Act. The Commissioner, Central Excise, filed the appeal questioning whether LARO should be classified under sub-heading 2710.29 as confirmed by the Commissioner (Appeals) or under sub-heading 2710.99 as claimed by the Revenue.

The Senior Departmental Representative argued that LARO's specifications differ from kerosene, emphasizing that LARO is a distinct product derived from kerosene through a special process with specific uses in the aluminium industry. The flash point and distillation range of LARO were highlighted to show its differentiation from kerosene, supporting the claim that it should not be classified as kerosene.

On the other hand, the General Manager Finance of M/s. Indian Oil Corporation Ltd. contended that LARO meets the specifications under sub-heading 2710.20, which includes products like kerosene. Referring to the Supreme Court's decision in Dunlop India, it was argued that when an article is classifiable under a specific item in the Tariff Schedule, it should not be denied that classification. The onus was placed on the Excise authorities to prove that LARO cannot be classified under sub-heading 2710.29.

The Tribunal considered the arguments from both sides and analyzed the relevant provisions of the Central Excise Tariff Act. It was noted that the Commissioner (Appeals) had already found that LARO met the specifications under the relevant heading. The Tribunal interpreted the phrase "that is to say" in the heading to expansively cover hydrocarbon oils meeting specific criteria, including a smoke point of 18 mm or more and a final boiling point not exceeding 300^0C.

Referring to previous decisions, including the case of Reliance Industries Ltd., the Tribunal concluded that LARO fell under sub-heading 2710.29 as it satisfied the physical properties specified in the heading. Following the precedent set by the Larger Bench in similar cases, the Tribunal upheld the Commissioner (Appeals)'s findings and dismissed the appeal, ruling in favor of classifying LARO under sub-heading 2710.29 of the Central Excise Tariff Act.