1998 (9) TMI 218 - AT - Central Excise

Summary

Issues: Classification of product "Silfin-9009" under Central Excise Tariff Act, 1985

Issue 1: Classification Dispute
The appeal involved a classification dispute regarding the product "Silfin-9009" manufactured by the respondents under the Central Excise Tariff Act, 1985. The Collector of Central Excise, Bombay contested the classification determined by the Collector (Appeals) who had classified the product under Chapter sub-heading No. 3403.00. The Department disagreed and argued that the product should be classified differently based on its composition and use.

Analysis:
The dispute centered around whether the product "Silfin-9009" should be classified under Chapter sub-heading 3403.00 as claimed by the assessee or under a different sub-heading as suggested by the Department. The Collector (Appeals) had based the classification on the product being a water dispersible textile lubricating preparation containing a high proportion of surface active agents together with mineral oils and other chemicals. However, the Department argued that the product did not contain mineral oil or fatty substances essential for classification under sub-heading 3403.00. The Test Report confirmed that the product was a mixture of organic surface active agents only, lacking the required mineral oil or fatty substances for classification under 34.03.

Issue 2: Interpretation of Explanatory Notes
The competing entries under Heading 34.02 and Heading 34.03 of the Central Excise Tariff Act, 1985, were crucial in determining the correct classification of the product "Silfin-9009." The Explanatory Note (G) to Heading 34.03 in the Harmonized System of Nomenclature (HSN) was referenced to understand the criteria for classifying products under this heading.

Analysis:
The Explanatory Note (G) to Heading 34.03 outlined that products falling under this heading should typically contain a mixture of mineral oil or fatty substances with surface active agents or be a water dispersible textile lubricating preparation with specific components. The absence of mineral oil or fatty substances in the composition of "Silfin-9009" was a crucial factor in determining its correct classification. The Tribunal noted that the product did not meet the essential requirement of containing mineral oil or fatty substances as specified under Heading 34.03.

Conclusion:
The Tribunal, after considering the arguments presented by the Department and the lack of essential components in the product, concluded that the appeal by the Department had merit. Consequently, the Tribunal allowed the appeal and set aside the order of the Collector (Appeals) regarding the classification of the product "Silfin-9009" under the Central Excise Tariff Act, 1985.