2001 (4) TMI 140 - AT - Central Excise

Summary

Issues:
Classification dispute regarding 'Liquefied Petroleum Gas' (LPG) supplied by the appellant company to another company for extraction of Isobutylene.

Analysis:
1. Classification by Appellant: The appellant classified the LPG gas supplied as falling under Heading 2711.19 of the CETA, based on IS Standards for "Commercial Butane type of LPG." However, the Department sought to classify it as Isobutylene under Heading 2901.90, citing price differences and essential character based on constituent content.

2. Assistant Commissioner's Decision: The Assistant Commissioner rejected the appellant's contentions, emphasizing the Isobutylene enrichment process, duty payment based on net quantity, and essential use by the buyer as grounds for classifying the product as Isobutylene.

3. Commissioner (Appeals) Decision: The Commissioner upheld the Assistant Commissioner's decision, highlighting the exclusive consumption of Isobutylene by the buyer, duty calculation based on net quantity consumed, price disparity, and the essential nature of Isobutylene in the product supplied.

4. Appellate Tribunal Decision: The Tribunal analyzed the process of Isobutylene extraction, the role of the feed preparation unit, and the classification under Chapter 29 or 27.11. It considered the purity of Isobutylene, solvent usage, and the composition of the gas stream to determine the appropriate classification. Ultimately, the Tribunal set aside the lower authorities' classification and allowed the appeal, classifying the product under 2711.19 as a Petroleum Refining Gas.

This detailed analysis covers the classification dispute, the arguments presented by each party, and the reasoning behind the final decision by the Appellate Tribunal.