2023 (9) TMI 730 - AT - Customs

Classification of imported goods - 473.590 MTS(Gross Wt.) and 1988/679(Gross wt.) for white spirit which is a petro oil/hydrocarbon solvent - to be classified under CTH 27101990 and therefore same being freely importable? - HELD THAT - The appellant has seriously challenged the report of CRCL, and not only has it backed up its proposition of goods being as per its classification with various technical literature, only which are a part of paper book, but has done so on the basis of various material mentioned in the findings of the CRCL to indicate that impugned products are devoid of getting fitted into the requirement of statutory notes, under Tariff Heading 271012. Reliance upon the decision of the coordinate Bench of Calcutta High Court in their own matter i.e M/S KUNJAL SYNERGIES PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS (PORT) , KOLKATA (VICE-VERSA) 2023 (6) TMI 1014 - CESTAT KOLKATA . The coordinate Bench while dealing with similar imports of item which were claimed to be Low White Spirit has thoroughly analysed various parameters, the statutory notes as well as findings of the CRCL on various parameters, and more particularly Chapter Note 4 of Chapter 27, which indicates that to be included in Sub Heading 271012, as low white oil in the matter, atleast 90% or more by volume should distil at 210 according to ISO. In the instant case also, we find that as per the reports available 95% of volume is recovered at approximately 184 , and final boiling point is maximum was 202.4 in one case and 196.2 in another case which was not as per the requirement approved of by the Apex Court of 90% distilled taking place at 210 degree Celsius as per statutory note and as per the decision of M/S KRISHNA TECHNOCHEM PVT. LTD., SHRI BINDHYACHAL SINGH VERSUS COMMR. OF CENTRAL EXICSE, HALDIA 2019 (9) TMI 1523 - CESTAT KOLKATA . There are no merits in the impugned order - appeal allowed.

Summary

Issues Involved:
1. Classification of imported goods.
2. Compliance with statutory notes and IS standards.
3. Validity of test reports and their interpretation.
4. Confiscation and penalties imposed by the adjudicating authority.

Summary of Judgment:

Issue 1: Classification of Imported Goods
The appellant, M/s Kunjal Synergies Pvt Ltd, imported white spirit and classified it under CTH 27101990, claiming it to be freely importable. The department reclassified the goods under CTH 27101239 based on CRCL test reports, which indicated the goods were petroleum hydrocarbon solvents (145/205) as per IS 1745:2018. The adjudicating authority rejected the declared classification, ordered confiscation, and imposed penalties.

Issue 2: Compliance with Statutory Notes and IS Standards
The appellant argued that for classification under subheading 271012, the product must meet specific distillation criteria, i.e., 90% or more by volume should distil at 210°C according to ISO 3405 method. The test reports did not satisfy this criterion, as the final boiling points were 202.4°C and 196.2°C, respectively, and 95% volume was recovered at approximately 184°C, which is not in compliance with the statutory notes.

Issue 3: Validity of Test Reports and Their Interpretation
The appellant challenged the CRCL test reports, arguing that key markers such as color, residue, and distillation range were not adequately tested. They cited various technical standards and previous judgments, including the Supreme Court's decision in the case of Krishna Technochem Pvt Ltd, which emphasized that 90% or more by volume must distil "at" 210°C, not "up to" 210°C.

Issue 4: Confiscation and Penalties Imposed by Adjudicating Authority
The adjudicating authority confiscated the goods, imposed a redemption fine, and penalties under Sections 111(d), 111(m), and 112(a)(i) of the Customs Act, 1962. The appellant contested these actions, arguing that the department failed to prove the classification under CTH 27101239 beyond doubt.

Tribunal's Findings:
The Tribunal found merit in the appellant's arguments, noting that the test reports did not meet the statutory requirements for classification under CTH 27101239. The Tribunal relied on the Supreme Court's interpretation in Krishna Technochem Pvt Ltd, which clarified that 90% or more by volume must distil "at" 210°C. The Tribunal concluded that the goods should be classified under CTH 27101990, as claimed by the appellant, and thus, the confiscation and penalties were not justified.

Conclusion:
The Tribunal allowed the appeal, upheld the appellant's classification under CTH 27101990, and provided consequential relief. The confiscation and penalties imposed by the adjudicating authority were set aside.