1997 (1) TMI 258 - AT - Central Excise

Summary

Issues: Classification of Linear Alkyl Benzene Sulphonic Acid (Acid Slurry) under Central Excise Tariff - Correct interpretation of Chapter Notes - Acceptance of Expert Reports - Necessity of proper testing by Chemical Examiner

In this case, the appellant, engaged in the manufacture of detergents, appealed against the order of the Collector of Central Excise (Appeals), Allahabad, dated 20-11-1991, regarding the classification of Linear Alkyl Benzene Sulphonic Acid, commercially known as 'Acid Slurry'. The main issue revolved around the correct classification of this material, with the appellant claiming classification under entry 29.04 and the Department claiming classification under entry 34.02. The appellant argued that the product is a separate chemically defined compound and should be excluded from Chapter 34 based on Chapter Note l(b). The Department, however, relied on a report from the Departmental Chemical Examiner of another party, indicating classification under heading No. 34.02 as an organic surface active agent. The appellant presented expert reports from the Harcourt Butler Technological Institute certifying that 'Acid Slurry' is not an organic surface active agent until neutralization. The lower authorities did not provide reasons for rejecting these expert reports. The appellant requested a fresh test of their product based on the expert reports they provided. The Department argued that their Chemical Examiner's report supported classification under 34.02 and that the appellant did not challenge its correctness. However, the Tribunal found the appellant's contentions to be strong and noted that the Departmental Chemical Examiner's report alone was insufficient for classification. The Tribunal emphasized the importance of considering all relevant Chapter Notes and headings, especially Chapter Note l(b) of Chapter 34, before classification. Since Chapter 34.02 covers specific types of products, it was crucial to determine if the product fell under Chapter Note l(b). Consequently, the Tribunal set aside the previous orders and remanded the matter for re-adjudication by the Assistant Commissioner, directing a fresh report and expert opinion in light of the observations made.