2000 (3) TMI 507 - AT - Central Excise

Summary

Issues: Classification of Benzene and Toluene, Classification of Dripolene C, Clearance of Benzene and Toluene in the guise of Dripolene C

Classification of Benzene and Toluene:
The judgment revolves around the classification of Benzene and Toluene based on their purity levels. The HSN Explanatory Notes were deemed crucial in determining the classification of these products. The court emphasized that a chemically defined compound should not contain other substances deliberately added during or after its manufacture to fall under a specific chapter heading. The purity criteria for Benzene and Toluene were highlighted, indicating that purity below 96% excludes them from certain classifications. The CBEC's clarification and relevant trade notices were cited to support the importance of purity in classification. The court concluded that purity is indeed a criterion for classifying petrochemical products under Chapter 29, contrary to the assessees' claims.

Classification of Dripolene C:
The judgment also addressed the classification of Dripolene C, emphasizing that it is not a residue but a product of distillation used as raw material for other products. The court considered statements and affidavits from officials of the respondent's company, affirming that Dripolene C was not a residue but a distillation product. The weight of aromatic constituents in Dripolene C was a key factor in its classification, leading to the conclusion that it falls under a specific heading related to aromatic constituents exceeding non-aromatic constituents.

Clearance of Benzene and Toluene in the guise of Dripolene C:
The court scrutinized the clearance of Benzene and Toluene disguised as Dripolene C. Test reports and oral evidence indicated that Benzene and Toluene were cleared under the guise of Dripolene C, contrary to the descriptions on gate passes. Various individuals involved in the transactions admitted to receiving Benzene and Toluene instead of Dripolene C. The court upheld the charge that the assessees indeed cleared Benzene and Toluene as Dripolene C, leading to the confirmation of duty demand and imposition of a penalty.

In conclusion, the judgment delves into the intricate details of classifying Benzene, Toluene, and Dripolene C based on purity levels, product characteristics, and oral evidence regarding the clearance of products in the guise of others. The court's analysis highlights the significance of purity in classification and the consequences of misrepresenting products during clearance.