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2023 (8) TMI 1133 - AT - Central ExciseScope of clarification issued by the Board - Retrospective or Prospective - Classification of goods - chlorinated paraffin - classifiable under Tariff Item No. 38 12 2090 or under 2712 20 10? - Circular No. 950/01/2011-CX dated 01-08-2011 - HELD THAT - From the above clarifications it can be seen that the Chlorinated Paraffin Wax (liquid form) is correctly classifiable under Sub Heading 3824 90 of Central Excise Tariff Act - there is no doubt that the goods manufactured by the appellant i.e. Chlorinated Paraffin is in liquid form. As per the Board Circular it was clarified that Chlorinated Paraffin liquid form is correctly classifiable under 3824 90. Though the appellant have declared classification under Tariff Item No. 3812 20 90 but the goods in any case is not classifiable under Tariff Item No. 2712 20 10. It is a settled law that any clarification with regard to any Act will always have retrospective effect for the reason that there is no change in the law but the existing law has been interpreted and clarified therefore the geneses of law remained intact. Accordingly any clarification issued shall have a retrospective effect right from the enactment of the relevant law - Therefore there are no hesitation to hold that in the present case the clarification issued by the board has a retrospective effect and accordingly the purposed classification of goods under Tariff Item No. 2712 20 10 in respect of Chlorinated Paraffin in liquid form does not apply. The revenue could not succeed in classifying the goods i.e. Chlorinated Paraffin in liquid form under Sub heading No. 2712 20 10. Therefore the entire case based on that will not sustain. Appeal allowed.
Issues:
Classification of Chlorinated Paraffin under Tariff Item No. 2712 20 10 vs. 3824 90 Summary: Issue 1: Classification of Chlorinated Paraffin The appellant, engaged in the manufacture of chlorinated paraffin, classified the product under Tariff Item No. 38 12 2090, while the department contended that it should be classified under 2712 20 10. The appellant argued that they manufactured chlorinated paraffin in liquid form, not wax, and referred to Board Circular No. 950/01/2011-CX clarifying the classification. The Adjudicating Authority accepted that the goods were in liquid form. The Tribunal noted the Circular's clarification that chlorinated paraffin in liquid form is classified under Sub Heading 3824 90, not 2712 20 10. The Tribunal held that the Circular had retrospective effect, making the department's classification incorrect. Issue 2: Retrospective Effect of Circular The Tribunal rejected the revenue's argument that the Circular did not have retrospective effect due to the removal of the Tariff Entry 2712 20 10 in the Finance Budget 2010. It clarified that the removal of the entry was not relevant for chlorinated paraffin in liquid form, which was always classified under 3824 90. The Tribunal emphasized that any clarification under the law has a retrospective effect, as it interprets existing law without changing it. Issue 3: Adverse Effect of Difference in Chapter Heading The Tribunal dismissed the revenue's claim that the difference in chapter heading (3812 90 vs. 3824 90) would adversely affect the appellant's case. Referring to a previous judgment, the Tribunal stated that once the revenue's proposed classification was found inappropriate, the appellant's claimed classification would stand. The Tribunal emphasized the need to follow the law on recovery of duties accurately. Final Decision: The Tribunal set aside the impugned order and allowed the appeal, pronouncing the decision on 24.08.2023.
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