2011 (1) TMI 503 - AT - Customs

Benefit of Notification No. 19/94-Cus. dated 28-4-1994 and Notification No. 20/99-Cus. dated 28-2-1999 - Classification - It is further pointed out that the IIT Professor s report on a sample of the subject-goods clearly adverted to this question and it was authentically certified that the sample could be considered to be Naphtha - From the comparative account given by the Dy. Chief Chemist it is clear that naphtha is a mixture of hydrocarbons distilling in the range of 175 C to 240 C whereas nonene is a separate chemically defined liquid hydrocarbon boiling at 149.9 C soluble in alcohol insoluble in water etc. Both the notifications granted benefit to imported naphtha . None granted any benefit in respect of nonene - All these data would go to support the Revenue s case that the item imported by the appellant is not naphtha and hence the benefit of the two Notifications would not be admissible to them - Appeal is dismissed

Issues:
1. Benefit of Notifications No. 19/94-Cus. and 20/99-Cus. for goods imported by the assessee during a specific period.
2. Classification of goods under sub-heading 2710.00 of the Customs Tariff Act.
3. Dispute regarding whether "Nonene" can be considered as "Naphtha" for the purpose of exemption Notifications.
4. Reliance on test reports and opinions to determine the nature of the imported goods.
5. Interpretation of the Chemical Examiner's and IIT Professor's reports.
6. Applicability of the Board's circular regarding classification of "Heptene and Nonene" as "Naphtha."
7. Consideration of the Dy. Chief Chemist's opinion distinguishing between "Nonene" and "Naphtha."
8. Legal principles governing the interpretation of exemption Notifications and relevant case laws.

Analysis:
1. The appeal concerns the eligibility of the appellant for the benefit of Notifications No. 19/94-Cus. and 20/99-Cus. for goods imported between June 1997 and March 1999. The appellant classified the goods as "Nonene" under sub-heading 2710.00 of the Customs Tariff Act, claiming exemption or concessional duty applicable to "Naphtha" under the said Notifications.

2. The assessing authority provisionally assessed the goods at a "Nil" rate of duty based on the importer's declaration. Subsequent assessments varied based on the nature of the goods, leading to a dispute over classification under sub-heading 2901.29 and the denial of Notification benefits by the original authority and the Commissioner (Appeals).

3. The dispute hinges on whether "Nonene" can be equated to "Naphtha" for exemption purposes. The Dy. Chief Chemist's opinion, distinguishing between the two substances based on chemical composition and properties, formed a crucial basis for denying the Notification benefits to the appellant.

4. The appellant's contention, supported by the IIT Professor's report and chemical literature, emphasized the similarity between "Nonene" and "Naphtha," challenging the Dy. Chief Chemist's classification. The absence of the Dy. Chief Chemist's report in the appellant's possession was raised as a procedural concern.

5. The tribunal analyzed the chemical characteristics and uses of "Nonene" and "Naphtha" based on expert opinions and literature. The distinction in properties, origins, and applications of the substances supported the Revenue's argument that the appellant's imports did not qualify as "Naphtha" under the Notifications.

6. Considering the strict interpretation of exemption Notifications and the distinct nature of "Nonene" and "Naphtha," the tribunal upheld the lower authorities' decision, dismissing the appeal. The judgment underscored the importance of precise classification and adherence to statutory provisions in granting duty exemptions.

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