1999 (5) TMI 207 - AT - Central Excise

Summary

Issues: Classification of Rubber Processing Oil under Central Excise Tariff Act

Issue 1: Classification of Rubber Processing Oil
The main issue in this case was whether Rubber Processing Oil (RPO) should be classified under sub-heading No. 2710.99 of the Schedule to the Central Excise Tariff Act, as ordered by the Collector (Appeals), or under sub-heading No. 2710.50 of the Tariff.

Analysis:
The appellants, M/s. Hindustan Petroleum Corporation Ltd., argued that RPO was manufactured by blending intermediate streams and met the technical specifications of sub-heading 2710.50, which covers hydrocarbon oil ordinarily used as furnace oil. They contended that as long as the product met the technical specifications, it should be classified under the same sub-heading, even if not used as furnace oil. However, the Collector (Appeals) classified the product under sub-heading 2710.99 as speciality oil, granting benefits under Notification No. 287/86. The appellants' claim for classification under sub-heading 2710.50 was rejected based on the argument that RPO was not used as furnace oil, a requirement for classification under that sub-heading.

Issue 2: Interpretation of Tariff Specifications
The second issue involved the interpretation of the Tariff specifications for classifying products under specific sub-headings, particularly sub-heading 2710.50 related to furnace oil.

Analysis:
The Tribunal considered the technical specifications and usage criteria for classifying products under sub-heading 2710.50. It was noted that the product in question, RPO, did not meet the usage criterion of being ordinarily used as furnace oil, despite meeting technical specifications. The Tribunal emphasized that for classification under sub-heading 2710.50, the product must be a furnace oil or used as furnace fuel. The Tribunal highlighted that the Tariff specifically stated that furnace oil should ordinarily be used as furnace fuel, and since there was no evidence to show that RPO met this criterion, the classification under sub-heading 2710.50 was not warranted. The Tribunal also pointed out the difference between the technical specifications required for furnace oil under the erstwhile Central Excise Tariff and the specific usage criteria under sub-heading 2710.50 of the Central Excise Tariff Act, 1985.

Conclusion:
In conclusion, the Tribunal upheld the Collector (Appeals)'s order classifying RPO under sub-heading 2710.99 as speciality oil, as the product did not meet the usage criteria to be classified under sub-heading 2710.50 as furnace oil. The appeal filed by the appellants was rejected based on the lack of evidence showing that RPO could ordinarily be used as furnace oil, as required by the Tariff specifications.