2000 (5) TMI 58 - AT - Central Excise

Summary

Issues:
Classification of Heavy Normal Paraffin under tariff sub-heading 2710.29 or 2710.99.

Analysis:
The dispute in this case revolves around the classification of Heavy Normal Paraffin (HNP) under two tariff sub-headings, namely 2710.29 and 2710.99. Initially, the Assistant Collector classified HNP under 2710.99, but this decision was overturned by the Collector (Appeals), who classified it under 2710.29. The core issue was whether HNP, previously classified under Item 7 of the old tariff, should now be classified under the new Tariff 2710.29 or 2710.99. A Larger Bench was tasked with deciding this issue based on the differentiation between HNP and kerosene, as highlighted in a previous Tribunal decision.

The key consideration for the classification of HNP lies in the definition of kerosene and aviation turbine fuel under the new tariff. The definition encompasses any hydrocarbon oil, excluding mineral colza oil and turpentine substitute, with specific physical properties. The Departmental Representative argued that HNP, while meeting the physical properties of kerosene, is not commonly known as kerosene and should be classified under 2710.99. However, the Tribunal rejected this argument, emphasizing that the definition under Chapter 27 includes any hydrocarbon oil meeting the specified properties, regardless of common parlance.

Further, the Tribunal drew parallels with the classification of Refined Diesel Oil, highlighting the inclusive nature of the definitions based on specific physical properties. The legislative use of the phrase "that is to say" in defining kerosene and aviation turbine fuel was interpreted as an exhaustive enumeration of oils falling within these categories, excluding mineral colza oil and turpentine substitute.

Drawing on a Supreme Court decision and a previous Tribunal ruling, the Tribunal reiterated that the classification of oils is based on specific properties and exclusions, rather than common terminology. The decision in Indian Petrochemicals Corporation, upheld by the Supreme Court, established a precedent for classifying hydrocarbon oils based on defined physical properties.

Ultimately, the Tribunal concluded that HNP should be classified under 2710.29, in line with the arguments presented by the assessee and the lower appellate authority. The appeals challenging the classification under 2710.99 were dismissed, affirming the classification under 2710.29 as appropriate based on the defined criteria.