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Issues:
Classification of goods under the HSN (ITC) classification. Interpretation of the Export Import Policy 1992-97. Applicability of sensitive list restrictions on goods. Differentiation between pigments and inorganic chemicals. Classification of goods under the HSN (ITC) classification: The case involved a dispute regarding the classification of Titanium Dioxide (Rutile) Grade under the HSN (ITC) classification. The Commissioner (Appeals) relied on the opinion of the licensing authority that the goods were not classified as Pigment but under Heading No. 2823002, indicating they were not covered by the sensitive list. The Commissioner emphasized that the goods had multi-purpose uses, supported by technical clarifications, and granted the benefit of import under the advance license in question. However, the appeal contended that Titanium Dioxide of rutile grade was essentially used as a pigment, falling under the sensitive list, as per the Handbook of Procedures. Interpretation of the Export Import Policy 1992-97: The Commissioner (Appeals) based the decision on the Export Import Policy 1992-97, stating that the DGFT's opinion was binding in the case. The lower authority was expected to accept the opinion under para 20 of the policy, and the benefit of the license should not be denied based on the classification of goods as Pigment. The Commissioner's decision was supported by certificates from the Indian Institute of Technology and technical clarifications from the Encyclopaedia of chemical technology, indicating the varied uses of the subject goods. Applicability of sensitive list restrictions on goods: The appeal raised concerns about the sensitive list restrictions on Pigments, which were covered in Sensitive List No. I up to a specific date, attracting quantity restrictions in value-based licenses. The appeal argued that Titanium Dioxide of rutile grade was essentially used as a pigment in the manufacturing of enamels/paints, falling under the category of Pigment as per the Handbook of Procedures. However, the Commissioner's decision was upheld, emphasizing that the goods were classified under inorganic chemicals rather than as Pigment, based on the classification issued by licensing authorities. Differentiation between pigments and inorganic chemicals: The appeal highlighted the distinction between pigments and inorganic chemicals, emphasizing that Titanium Dioxide of rutile grade was chiefly used as a pigment, as per the C.C.C.N. Explanatory Notes. However, the Tribunal found that the grounds in the appeal contradicted each other, indicating that Titanium Dioxide, when not surface treated, could be considered a raw material for the manufacture of pigments and not a pigment itself. The Tribunal upheld the Commissioner's decision, stating that a raw material could not be equated to the finished product it contributes to after processing, and rejected the appeal based on the conflicting grounds presented.
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