2005 (10) TMI 321 - AT - Central Excise

Summary

Issues: Classification of goods under Central Excise Tariff Act, 1985 - Chapter 15, 29, and 39; Duty liability under sub-headings 1508.90 and 3812.00; Penalty imposition.

In this case, the respondents, engaged in manufacturing goods falling under Chapters 15, 29, and 39 of the Central Excise Tariff Act, 1985, cleared epoxidised oil used as plasticisers without duty payment, claiming classification under CET sub-heading 1508.90. The department contended that the item was epoxidised plasticiser under CET sub-heading 3812.00, attracting a 20% duty, issuing a show cause notice for recovery and penalty imposition. The Assistant Commissioner upheld the demand and penalty, stating that the product was classified under CET sub-heading 3812.00. However, the Commissioner (Appeals) set aside the demand and penalty, finding no admission by the respondents and insufficient evidence to establish the product as epoxidised plasticisers under Chapter Heading 38.12.

Upon hearing both sides, the Tribunal analyzed the HSN Explanatory Notes, noting that epoxidised oil obtained from vegetable oil, used as plasticisers or stabilisers, remains classified under Chapter 15. Chapter Heading 38.12 covers compound plasticisers for rubber or plastics not elsewhere specified, while Chapter Heading 15.08 includes modified animal or vegetable fats and oils. Given that the disputed product was epoxidised vegetable oil, and considering the HSN Explanatory Notes, which clarify that such oils used as plasticisers fall under Chapter 15, the Tribunal rejected the department's argument for classification under Heading 38.12. Consequently, the Tribunal upheld the Commissioner (Appeals) order, dismissing the appeal and relieving the respondents from duty liability and penalty.