1996 (1) TMI 197 - AT - Central Excise

Summary

Issues:
Classification of synthesis gas under Central Excise Tariff - Chapter 27 or Chapter 28.

Detailed Analysis:

Issue 1: Classification of Synthesis Gas
The Collector of Central Excise, Vadodara filed an appeal against the Order-in-Appeal classifying synthesis gas under Heading 27.05 of the Central Excise Tariff. The Collector (Appeals) had allowed the appeal of M/s. Gujarat State Fertilizers Company Limited, classifying the product under Tariff sub-heading 2804.90. The appellant argued that the product should be classified under Chapter 28 based on exemption Notifications 415/86-C.E. and 114/89-C.E. The Departmental Representative contended that synthesis gas does not resemble gases under Heading 27.05 and should be classified under 2804.90. The respondents argued that Tariff Heading 2705.00 covers similar gases, including synthesis gas. The Tribunal considered the exemption notification not determinative of classification and relied on previous judgments to determine that synthesis gas is similar to gases under Heading 2705.00, not 2804. The Tribunal explained that "similar" does not mean identical but corresponding to or resembling in many respects. The composition of synthesis gas, including Hydrogen, Nitrogen, Methane, and argon, aligns with gases under Heading 2705.00.

Issue 2: Interpretation of Tariff Headings
The Tribunal analyzed the composition and characteristics of synthesis gas in comparison to gases under Heading 27.05. It emphasized that the composition need not be identical for goods to be classified as similar. The Tribunal referred to the Supreme Court judgment in Nat Steel Equipment Pvt. Ltd. v. Collector of Central Excise, which defined "similar" as having a general likeness or corresponding to in many respects. The Tribunal found that synthesis gas shares similarities with coal gas, water gas, and producer gas in composition, production method, and use, supporting its classification under Heading 27.05. The Tribunal also considered the Deputy Chief Chemist's report, which confirmed the classification of synthesis gas under Tariff Heading 27.05 based on the process of steam reforming and the composition of the gas mixture.

Conclusion:
The Tribunal upheld the Order-in-Appeal classifying synthesis gas under Heading 27.05 of the Central Excise Tariff, dismissing the appeal filed by the Collector of Central Excise, Vadodara. The decision was based on the classification principles, statutory notifications, and expert opinions supporting the classification of synthesis gas as similar to gases under Heading 2705.00, in line with the Supreme Court interpretation of "similar."