1998 (11) TMI 231 - AT - Customs

Summary

Issues: Classification of imported goods under Customs Tariff Act, 1975

Classification under Heading 29.07 vs. Heading 27.07:
The appellants imported coal tar distilled phenol and sought clearance under sub-heading 2707.60 of the Customs Tariff. The Assistant Collector classified the goods under Heading 29.07 based on purity tests, considering them as 100% pure organic compounds excluded from Chapter 27. The lower appellate authority upheld this classification. The appellants argued that phenol obtained from coal tar distillation, like in their case, differs commercially and in end use from synthetically manufactured phenol classified under Chapter 29. They contended that purity should determine classification, not the method of obtaining phenols. The lower appellate authority relied on HSN Explanatory Notes to confirm classification under Heading 2907.11, emphasizing purity criteria for classification.

Interpretation of Chapter Notes and Sub-heading Notes:
The lower appellate authority analyzed the Chapter Notes and Sub-heading Notes of Chapter 27 and Chapter 29 in the Customs Tariff Act, 1975, comparing them to the Harmonized System Nomenclature (HSN). They noted that Chapter 27 excludes separate chemically defined organic compounds, while Chapter 29 applies to such compounds, irrespective of impurities. The authority highlighted the absence of purity percentage criteria in the Customs Tariff Act, 1975 for interchanging classification between Chapter 27 and Chapter 29. Despite anomalies in incorporating HSN wording, the authority emphasized the stipulations of Chapter Heading Note 1(a) of Chapter 27, which prevail over sub-note (3) of Chapter 27. They considered the persuasive value of HSN notes in interpreting the classification of phenol under Chapter 29. The authority concluded that pure phenols with over 50% purity are classified under Chapter 29.07.

Final Decision and Upholding of Classification:
In the absence of representation from the appellants, the Tribunal agreed with the lower appellate authority's classification of the imported goods as pure phenols under Chapter Heading 2907.11 of the Customs Tariff Act, 1975. Considering the undisputed purity of the goods, the Tribunal upheld the impugned order and rejected the appeal. The judgment emphasized the significance of purity percentage and commercial recognizability in classifying phenols under the appropriate headings in the Customs Tariff Act, 1975.