1998 (6) TMI 163 - AT - Central Excise

Summary

Issues: Classification of product under Chapter 27 or Chapter 38

Analysis:
1. The department argued that the product, marketed as an oil saver of engine, should be classified under sub-heading No. 2710.99 as a mineral oil preparation, as it contains more than 70% oil. They contended that the product does not qualify as a chemical product under Chapter 38, as it is predominantly an oil preparation.

2. The respondents claimed classification under sub-heading No. 3811.00 for their product, based on its function as a viscosity improver and anti-knock preparation. They argued that the product's essential properties and characteristics, such as improving viscosity index and reducing oil consumption, align with the definition of viscosity improver under Chapter 38.

3. The Chemical Examiner's report confirmed that the product contained mineral hydro-carbon oil and additives, with more than 70% mineral oil content. The respondents reclassified the product as an anti-knock preparation falling under sub-heading No. 3811.00, or as a 'speciality oil' under sub-heading No. 2710.99. However, the department maintained that the product, being a mixture of additives in mineral oil, should be classified under sub-heading No. 2710.99.

4. The Counsel argued that the product's functional properties, such as improving viscosity index and overall performance, qualified it as a viscosity improver covered under sub-heading 3811.00. They emphasized that the product was bought and sold based on its functional properties, not just its oil content, making it suitable for classification under Chapter 38.

5. The Tribunal analyzed the rival entries of 2710.99 and 38.11, focusing on whether the product was an anti-knock preparation or a viscosity improver. It considered the chemical composition, functional aspects, and intended use of the product to determine the appropriate classification.

6. After reviewing the evidence and arguments presented, the Tribunal concluded that the product, being a prepared additive for mineral oils with anti-knocking properties, fell under heading 38.11. It held that the product's functional aspect and use were crucial in determining its classification, leading to its exclusion from heading 27.10 and inclusion under heading 38.11.

7. Consequently, the department's appeal was rejected, and the classification of the product as an anti-knock preparation under sub-heading No. 3811.00 was upheld by the Tribunal. The decision was based on the product's nature as a prepared additive for mineral oils, its functional properties, and its use in eliminating undesirable properties and enhancing desirable properties.

End of Analysis