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Issues: Classification of imported goods under Customs Tariff, eligibility for exemption under Notification 112/87, classification under Central Excise Tariff, relevance of flash point in determining classification.
In this judgment by the Appellate Tribunal CEGAT, New Delhi, the issue revolved around the classification of imported goods, specifically Gredag ML-12 Glass Mould Lubricant and Cildag Colloidal Graphite in oil. The dispute arose when the goods were assessed under Heading 2710.00 of the Customs Tariff, but the importers claimed they should be classified under Heading 2710.60 of the Central Excise Tariff as lubricating oil for levy of additional duty and exemption under Notification 112/87. The Assistant Collector initially assessed the goods under Heading 2710.99 and denied the benefit of the notification, leading to an appeal by the importers, which was allowed by the Collector of Customs (Appeals) based on the flash point of the imports exceeding 94%. Consequently, the Department appealed this decision. Upon analysis, the Tribunal examined the relevant Central Excise Tariff Entries, specifically Heading 2710.99 and Heading 2710.60. The Department argued that the goods were a compound of lubricating oil containing graphite, not a straight lubricating oil, and thus should be classified as a preparation containing petroleum oil and graphite, making the flash point irrelevant. However, the Tribunal disagreed, noting that the imports had already been classified under Heading 2710 of the Customs Tariff without challenge. It was highlighted that the benefit of Notification 115/86 had been granted to the goods under a specific serial number related to lubricating oils, not the residuary Heading of 2710.99. The definition of lubricating oil in Notification 112/87 matched that in the relevant serial number of Notification 115/86, further supported by a certificate from the Indian Oil Corporation confirming the nature of the goods as lubricating oils. Consequently, the Tribunal upheld the classification under Heading 2710.60 of the Central Excise Tariff, subject to countervailing duty at a specified rate and exempt from auxiliary duty under Notification 112/87. In conclusion, the Tribunal upheld the decision of the Collector of Customs (Appeals) and dismissed the appeal by the Department, affirming the correct classification of the imported goods as lubricating oils under the Central Excise Tariff and the eligibility for exemption under Notification 112/87 based on the specific characteristics and definitions provided in the relevant notifications and certificates.
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