1991 (7) TMI 175 - AT - Central Excise

Summary

Issues:
Classification of Liquid Phenyle under Tariff Item 3808.10 or 3808.90.

Detailed Analysis:

Issue 1: Classification of Liquid Phenyle
The dispute revolves around the classification of Liquid Phenyle under Tariff Item 3808.10 or 3808.90. The appellants manufactured Liquid Phenyle, initially classified under Tariff Item 68, then under Chapter Heading 3808.10. The Assistant Collector issued show cause notices proposing classification under 3808.90, leading to a demand for duty. The Collector approved classification under 3808.90 in one appeal but set aside the direction to pay duty from the beginning in another appeal. The appellant argued for classification under 3808.10, citing prior classification, repellent properties, ISI specifications, and judicial precedents.

Issue 2: Appellant's Contentions
The appellant contended that Liquid Phenyle, being classified as an insecticide under Tariff Item 68 and benefiting from an exemption notification, should continue under 3808.10 post-tariff schedule change. They argued that repellent properties make it an insecticide, supported by judicial precedents. The appellant emphasized ISI specifications and the principle that genus and species determine classification, asserting Liquid Phenyle as a species of insecticides. They stressed prior classification and notification benefits as grounds for continued classification under 3808.10.

Issue 3: Department's Argument
The Department argued that prior classification and notification benefits are irrelevant post-tariff schedule change. They relied on a Tribunal order classifying Liquid Phenyle as a disinfectant under 3808.90. The Department emphasized that the specific tariff sub-headings distinguish between genus and species, placing disinfectants under 3808.90. They maintained that the Tribunal's order on classification prevails, supporting Liquid Phenyle's classification as a disinfectant under 3808.90.

Issue 4: Tribunal's Decision
The Tribunal analyzed the tariff schedule post-1-3-1987, noting the inclusion of 'disinfectants' under 3808.10 and 'others' under 3808.90. Considering this classification, the Tribunal upheld the lower authorities' decision to classify Liquid Phenyle as a disinfectant under 3808.90 post-1-3-1987. The Tribunal rejected the appellant's arguments regarding prior classification, repellent properties, and ISI specifications. It dismissed the appeals and confirmed the demand for duty, aligning with the classification of Liquid Phenyle as a disinfectant under 3808.90.

In conclusion, the Tribunal upheld the classification of Liquid Phenyle as a disinfectant under Tariff Item 3808.90, rejecting the appellant's arguments based on prior classification, repellent properties, and ISI specifications. The decision emphasized the specific tariff sub-headings and the Tribunal's previous order on classification, confirming the demand for duty.