1986 (1) TMI 229 - AT - Central Excise

Summary

Issues Involved:
1. Classification of dodecylbenzene under the Customs Tariff.
2. Applicability of Chapter 27 versus Chapter 38 for assessment.
3. Interpretation of Note 3 to Chapter 27.

Detailed Analysis:

1. Classification of Dodecylbenzene under the Customs Tariff:
The primary issue in the appeals was the correct classification of dodecylbenzene for customs assessment. The Custom House had assessed the product under heading 38.01/19(1), while the importers argued for assessment under heading 27.10(1). The Collector (Appeals) had previously ruled in favor of the importers, classifying the product under Chapter 27.

2. Applicability of Chapter 27 versus Chapter 38 for Assessment:
The Collector (Appeals) concluded that dodecylbenzene was a mixed unsaturated hydrocarbon with non-aromatic constituents exceeding aromatic ones, thus fitting under heading 27.10F. The department disputed this, arguing that dodecylbenzene, with its chemical structure C12H25C6H5, contains a benzene ring and must be considered an aromatic chemical, disqualifying it from Chapter 27. The department emphasized that the side chain C12H25 is not unsaturated and the product is not an oil to be assessed under Chapter 27.

The tribunal found that dodecylbenzene, as a benzene derivative with a 12-carbon side chain, is not a product of distillation but rather a chemically modified substance. The tribunal noted significant differences between benzene and dodecylbenzene, with the latter being used primarily in the manufacture of detergents, not as a fuel or oil product.

3. Interpretation of Note 3 to Chapter 27:
Note 3 to Chapter 27 states that petroleum oils and oils obtained from bituminous minerals include similar oils with mixed unsaturated hydrocarbons, provided non-aromatic constituents exceed aromatic ones. The tribunal found that the Appellate Collector erred in interpreting dodecylbenzene as an oil under Chapter 27. The tribunal clarified that dodecylbenzene is not a product of distillation and does not fit the characteristics of oils covered under Chapter 27.10, which includes products like petroleum spirit, kerosene, and diesel oil.

The tribunal highlighted that dodecylbenzene, used in detergents, is a manufactured product resulting from the alkylation of benzene, not a distillation product. Therefore, it does not belong to Chapter 27, which covers mineral fuels and oils.

Conclusion:
The tribunal concluded that dodecylbenzene is not a separate chemically defined compound but a mixture of chemicals with varying side chains, fitting the description under Chapter 38. The tribunal referenced the CCCN explanatory notes and the Alphabetical Index, which also classify dodecylbenzene under heading 38.19. Consequently, the tribunal ordered the classification of dodecylbenzene under Chapter 38, heading 38.01/19(1), and allowed the appeals.

Separate Judgment:
The separate judgments delivered by the members of the tribunal concurred with the conclusion that dodecylbenzene should be classified under Chapter 38. They emphasized the technical nature of the classification and the persuasive force of the CCCN explanatory notes in making their decision.