2011 (6) TMI 417 - AT - Customs

Classification of imported Sulphonated Fish Oil - sub heading 34029020 OR 34039100 - Held that - On appreciation of test reports of CRCL and application of Rule 3(a) of Rules of Interpretation of Customs Tariff, 1975 imported products as Sulphonated Fish Oil being specifically mentioned under chapter sub heading 34029020.

Summary

Issues:
Classification of imported goods as Sulphonated Fish Oil under chapter sub heading 34029020 vs. classification under chapter sub heading 34039100.

Detailed Analysis:
The appeal before the Appellate Tribunal CESTAT, DELHI involved the classification of imported goods claimed to be Sulphonated Fish Oil under chapter sub heading 34029020. The department allowed provisional clearance of the goods and sent samples for testing to the Central Revenue Control Laboratory (CRCL). The test report indicated the sample as a preparation containing Sulphonated Fish Oil and additives. Subsequently, show cause notices were issued proposing classification under chapter sub heading 34039100. The respondents contested this classification, presenting a test report from the Central Leather Research Institute (CLRI) stating that the active function of the product is subsidiary to the main function of fat liquoring oil. The original authority classified the goods as proposed in the show cause notice, leading to an appeal to the Commissioner (Appeals) who set aside the original order.

During the appeal, the department argued that the CLRI test report described the product as a preparation with Sulphonated Fish Oil and additives, not solely as Sulphonated Fish Oil. They also referenced technical literature indicating the product's use as a fat liquor agent. The department relied on previous tribunal decisions to support their classification claim under chapter sub heading 34039100.

However, the Tribunal carefully considered the submissions and records. It noted that the burden of proof regarding classification lies with the department. The chemical examiner's report mentioned the sample as a preparation with Sulphonated Fish Oil and additives, without specifying the nature or quantity of additives. The end use of the product is relevant only if it falls outside the description of Sulphonated Fish Oil. Expert opinions on the different uses of Sulphonated Fish Oil were lacking. The technical opinion on ADUVAX LB described it as oil based on Sulphonated Fish Oil, with a clear statement that it is a strong Sulphonated Fish Oil. This supported the respondents' claim. The Tribunal concluded that the imported products should be considered as Sulphonated Fish Oil under chapter sub heading 34029020, as per Rule 3(a) of the Rules of Interpretation of Customs Tariff, 1975, which gives preference to the most specific description.

The Tribunal distinguished previous tribunal decisions where the imported goods were found to be different from Sulphonated Fish Oil. Ultimately, based on the appreciation of test reports and the application of Rule 3(a), the Tribunal upheld the decision of the Commissioner (Appeals) and rejected the appeal.