2017 (11) TMI 596 - AT - Central Excise

Classification of leftover goods after manufacture - Residual Crude Petroleum Oil or Reduced Crude Petroleum Oil - whether classified under CTH 2709.00.00 or under CTH 2713 90 00? - Held that - Respondents produced report before learned Commissioner (Appeals), issued by IIT, New Delhi, which indicated that Reduced Crude Oil was in fact crude oil - Revenue could not put forth any grounds for refusing the certificate issued by the IIT, New Delhi about the nature of the goods which was accepted by the learned Commissioner (Appeals) - appeal dismissed - decided against Revenue.

Summary

Issues involved: Classification of residual crude petroleum oil under the Central Excise Tariff Act, 1985.

Analysis:

1. Facts of the Case: The case involved the classification of residual crude petroleum oil by a company engaged in the manufacture of petroleum products. The company classified the leftover residue as 'Residual Crude Petroleum Oil' under Tariff Item No. 2709.00.00, while the revenue contended that it should be classified under Tariff Item No. 2713 90 00.

2. Show Cause Notice and Adjudication: The revenue issued a show cause notice demanding duty based on the classification of the residual crude oil. The matter was adjudicated through Order-in-Original No. 32/Joint Commissioner/2009, where the demand was confirmed, and a penalty was imposed. The original authority classified the residue under Tariff Item No. 2713 90 00.

3. Appeal before Commissioner (Appeals): The respondent appealed before the Commissioner (Appeals) and presented a report from IIT, New Delhi, stating that the 'Reduced Crude Oil' was indeed crude oil and had not undergone distillation. The Commissioner (Appeals) accepted this report and held that the residue should be classified under Tariff Item No. 2709.00.00, setting aside the Order-in-Original.

4. Tribunal Decision: Upon hearing the parties and reviewing the records, the Tribunal noted that the revenue failed to provide any grounds to challenge the certificate issued by IIT, New Delhi. Consequently, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the appeal filed by the revenue, affirming the classification of the residue under Tariff Item No. 2709.00.00.

In conclusion, the Tribunal upheld the classification of the residual crude petroleum oil as per the decision of the Commissioner (Appeals) based on the report from IIT, New Delhi, and dismissed the revenue's appeal.