1999 (10) TMI 199 - AT - Central Excise

Summary

Issues:
Classification of the product under Notification No. 101/66-C.E. as amended.

Analysis:
The judgment involved multiple issues related to the classification of a product under Notification No. 101/66-C.E. The appellants sought the benefit of entry at Sl. No. 2 of the notification, which exempted certain preparations from duty payment if the surface active agents used were duty paid. The dispute arose when the Dy. Chief Chemist initially opined that the product was not an organic surface active agent preparation, leading to show cause notices being issued. However, upon retesting, a different opinion was provided, stating that the product contained a surface active agent and should be classified as such.

The Asstt. Collector adjudicated the matter, emphasizing that the product qualified as an Emulsifier/Wetting agent under Chapter No. 3402.90, chargeable to a 'NIL' rate of duty. The Commissioner (Appeals) was then involved, challenging the Asstt. Commissioner's decision based on the Chemist's opinion. The Commissioner (Appeals) contended that the product should be a surface active preparation to qualify under the notification, leading to the appeals before the Tribunal.

The Tribunal analyzed the HSN explanatory note, which indicated that surface active preparations, including wetting agents and emulsifying agents, could be made by mixing surface active agents with other chemicals. The Tribunal referred to a previous case to support that sodium lauryl sulphate is a surface active agent, thus supporting the assessee's case. The department's acceptance that the goods were wetting out and emulsifying agents further strengthened the assessee's claim for exemption.

The Tribunal, while acknowledging the merit in the assessee's claim, remitted the matter back to the Commissioner (Appeals) for further consideration. The directions included providing the complete text of the Chemists' opinions to the assessee, deciding on classification following the HSN note, and determining the weight of technical opinion versus market nomenclature. The Tribunal emphasized the importance of a prompt resolution by the Commissioner (Appeals) on the classification issue.

In conclusion, the judgment addressed the classification of the product under the relevant notification, highlighting the significance of technical opinions, HSN notes, and consistency in decision-making processes to ensure a fair and accurate determination of duty liability.