2004 (11) TMI 411 - AT - Central Excise

Summary

Issues: Classification of Wool Grease under Central Excise Tariff Act

Analysis:
The primary issue in the present case revolves around the classification of wool grease under the Central Excise Tariff Act. The appellant, M/s. Oswal Woollen Mills Ltd., contended that wool grease should be classified under Heading No. 15.01 of the Tariff, while the Commissioner (Appeals) upheld its classification under Heading No. 15.07 in the impugned Orders.

The appellant's argument, presented by Shri Balbir Singh, emphasized that wool grease, obtained as a by-product during the washing of raw wool, should be classified under Heading 15.01 based on the Tribunal's decision in a prior case. The appellant relied on various sources, including the Condensed Chemical Dictionary, Encyclopaedia Britannica, and European Union Tariff classification, to support their claim that wool grease is a form of lanolin, which falls under Heading 15.01 covering animal fats and oils.

In contrast, Shri R.C. Sankhla, representing the respondent, argued that wool grease should be classified under Heading 15.07 as it is chemically considered a wax rather than a fat, as per the H.S.N. Explanatory Notes. The respondent contended that Heading 15.07, which includes vegetable waxes, is more appropriate for the classification of wool grease.

Upon evaluating the submissions from both parties, the Tribunal analyzed the relevant Tariff Headings, specifically Heading 15.01 and Heading 15.07. The Tribunal noted that wool grease, as described in the H.S.N. Explanatory Notes, is a sticky fat extracted from the soapy water used in wool processing, aligning it with the definition of animal fats covered under Heading 15.01. The Tribunal rejected the argument that wool grease should be classified as a wax under Heading 15.07, as it does not meet the criteria specified in that heading.

Furthermore, the Tribunal referenced previous judgments, including the Wool Combers case, to establish that lanolin, a refined form of wool grease, has been classified as an animal fat. Considering the nature of wool grease and its relation to lanolin, the Tribunal concluded that wool grease should be appropriately classified under Heading 15.01 of the Tariff. As a result, the appeals filed by M/s. Oswal Woollen Mills Ltd. were allowed, affirming the classification of wool grease under Heading 15.01.

In summary, the judgment clarifies the classification of wool grease under the Central Excise Tariff Act, emphasizing its alignment with Heading 15.01 as an animal fat based on its characteristics and chemical composition, thereby resolving the dispute raised in the appeals.