2009 (3) TMI 686 - AT - Central Excise

Summary

Issues Involved:
Correct classification of colouring oxide under Central Excise Tariff sub-heading 3206.90 or Chapter 25.05.

Detailed Analysis:

1. Issue of Correct Classification:
The main issue in the present appeals was the correct classification of colouring oxide like red oxide, green oxide, blue oxide, etc. manufactured by the respondents. The Revenue contended that the classification should be under Central Excise Tariff sub-heading 3206.90, while the assessee and the Commissioner (Appeals) argued for classification under Chapter 25.05.

2. Arguments and Reasoning:
The goods in question were manufactured by mixing mineral substances like earth colours and barytes with other substances like pigments, forming preparations based on colouring matter. The Commissioner (Appeals) classified the goods under Chapter 25 based on the percentage of combined iron found by the Chemical Examiner to be less than 70%. However, the Tribunal disagreed with this reasoning. It was noted that Note 2 to Chapter 25 specifies that the chapter covers only products that have been processed in certain ways, excluding products obtained by mixing. Since the red oxide in question was a mixture containing earth colours with other pigments, it did not fall under the classification of Chapter 25.

3. Legal Interpretation:
The Tribunal also considered Note 1 to Chapter 32, which covers "preparations based on colouring matter of a kind used for colouring any material." As the product in question was a preparation based on earth colours and not earth colour itself, it was deemed to be more appropriately classified under Chapter 32. Therefore, the Tribunal set aside the impugned orders and allowed the appeals in favor of the Revenue.

4. Conclusion:
In conclusion, the Tribunal's decision focused on the interpretation of relevant tariff headings and notes to determine the correct classification of the colouring oxide. By analyzing the specific characteristics of the product and applying the relevant legal provisions, the Tribunal concluded that the goods should be classified under Chapter 32 rather than Chapter 25, as contended by the Revenue.

This detailed analysis provides a comprehensive understanding of the judgment, highlighting the key issues, arguments presented, legal reasoning applied, and the ultimate decision reached by the Tribunal.