1999 (6) TMI 85 - AT - Central Excise

Summary

Issues involved:
Classification of Refrigeration Compressor Oil - Whether classifiable as Lubricating Oil under sub-heading 2710.60 or under sub-heading 2710.99 of the Central Excise Tariff Act.

Analysis:
The appeal raised the issue of classifying Refrigeration Compressor Oil manufactured by M/s. Hindustan Petroleum Corporation Ltd. (HPCL) as either Lubricating Oil under sub-heading 2710.60 or under sub-heading 2710.99 of the Central Excise Tariff Act. The Assistant Collector initially classified the product under sub-heading 2710.99 due to its composition and primary use as refrigeration oil. However, on appeal, the Collector (Appeals) reclassified it under sub-heading 2710.60 based on technical literature and ISI specifications, stating that the product met the criteria for lubricating oils and was commonly used for lubrication purposes. The Respondents argued that the impugned oil was specifically designed for lubricating moving parts in refrigeration compressors, meeting the requirements for lubricating oils under sub-heading 2710.60.

The Revenue contended that the oil should be classified under sub-heading 2710.99 as a specialty oil, citing a Test Report mentioning its use as refrigeration oil. In contrast, the Respondents emphasized that the product contained over 70% mineral oils, had a flash point above 94oC, and met the criteria for lubricating oils under sub-heading 2710.60. They argued that the oil was tailored for lubricating specific equipment parts in refrigeration compressors and should not be considered a specialty oil. They highlighted the function of refrigerants in refrigeration systems and the necessity of specially designed Lubricating Oil for compressor lubrication.

The Tribunal analyzed the Tariff headings, noting that sub-heading 2710.60 applied to oils ordinarily used for lubrication. Considering the technical literature, ISI specifications, and Indian Standard Specification I.S. : 4578-1968, which clarified the primary function of refrigeration oil as lubrication, the Tribunal concluded that the Refrigeration Compressor Oil should be classified under sub-heading 2710.60 as it was commonly used for lubricating compressor parts. The Tribunal found no evidence to dispute the Respondents' claim that the oil was primarily used for lubrication, rejecting the Revenue's appeal and upholding the classification under sub-heading 2710.60.

In conclusion, the judgment resolved the issue of classification of Refrigeration Compressor Oil, determining it to be classifiable as Lubricating Oil under sub-heading 2710.60 based on its primary function of lubricating compressor parts, as supported by technical specifications and common usage in the industry.