2006 (6) TMI 394 - AT - Customs

Liquefied petroleum gases (LPG) - Classification of goods - Change in classification - Appeal against provisional assessment

Summary

Issues Involved:
1. Classification of Commercial LPG under the Customs Tariff Act.
2. Eligibility for concessional rate of Customs duty under Notification No. 82/2004.
3. Legality of appeal against provisional assessment.

Issue-Wise Detailed Analysis:

1. Classification of Commercial LPG under the Customs Tariff Act:

The respondent filed Bills of Entry for clearance of Commercial LPG, claiming the benefit of Notification No. 82/2004 at a concessional rate of 5% Customs duty, classifying the goods under Chapter 271119.00. The department, however, classified the goods under Chapter 271113.00, charging a higher duty rate. The Commissioner (Appeals) held that the goods should be classified under Chapter 271119.00, entitling the respondent to the benefit of the notification. The Revenue contested this, arguing that the goods predominantly consisted of Butanes, which should be classified under Chapter 271113.00. The Tribunal examined the test results, which showed that the LPG was a mixture of Butane and Propane, and concluded that the product should be classified as a mixture under Chapter 271119.00, not as Butane under Chapter 271113.00.

2. Eligibility for Concessional Rate of Customs Duty under Notification No. 82/2004:

The respondent claimed the benefit of Notification No. 82/2004, which reduced the Basic Customs Duty on LPG classified under CSH 2711.19 from 10% to 5%. The department denied this benefit by reclassifying the LPG under CSH 2711.13. The Tribunal noted that the product had been consistently classified under CSH 2711.19 for the past five years and that the change in classification was prompted by the issuance of the notification. The Tribunal found that the product, being a mixture of Butane and Propane, was correctly classifiable under CSH 2711.19, thus entitling the respondent to the concessional rate of duty under the notification.

3. Legality of Appeal Against Provisional Assessment:

The Revenue raised a preliminary objection that the respondent could not appeal against the provisional assessment. The Tribunal dismissed this objection, citing case laws that allow appeals against provisional assessments when the rights of a party are affected. The Tribunal emphasized that there is no legal provision barring such appeals and that the respondent was justified in seeking remedies through the appellate channel.

Conclusion:

The Tribunal upheld the decision of the Commissioner (Appeals), confirming that the imported LPG should be classified under Chapter 271119.00 and that the respondent was entitled to the benefit of Notification No. 82/2004. The Tribunal found no merit in the Revenue's appeal and maintained that the change in classification by the department was unjustified and contrary to the established classification practice. The Tribunal's decision was pronounced in open court on 30-6-2006.