2018 (1) TMI 248 - AT - Central Excise

Classification of goods - Residual Crude Petroleum Oil - classified under CTH 2709.00.00 or under CTH 27139000? - Held that - similar issue decided in the case of Commissioner of C. Ex., Kanpur Versus Bajrang Petro Chemicals Pvt. Ltd. 2017 (11) TMI 596 - CESTAT ALLAHABAD , where it was held that the Residual Crude Oil is classifiable under Tariff Item No. 2709.00.00 - SCN not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of 'Residual Crude Petroleum Oil' under Tariff Item No.27139000, Show cause notice validity, Precedent set by Tribunal in Appeal No.E/1574/2010-EX[DB]

Classification Issue:
The case involved the classification of 'Residual Crude Petroleum Oil' leftover during the manufacture of 'Organic Composite Solvent' by the appellants. The revenue argued that the leftover should be classified under Tariff Item No.27139000 instead of Tariff Item No.2709.00.00. The original authority had classified it under Tariff Item No.27139000 and imposed a demand and penalty. The appellant contested this classification, citing a previous Tribunal decision in Appeal No.E/1574/2010-EX[DB] where it was held that 'Residual Crude Oil' is classifiable under Tariff Item No. 2709.00.00. The Tribunal, after considering submissions from both sides, upheld the precedent decision and ruled that the show cause notice was not sustainable, setting aside the Order-in-Original and allowing the appeal.

Show Cause Notice Validity Issue:
The show cause notice issued to the appellants demanded Central Excise duty for the period from April 2006 to August 2007, along with proposals for penalties on the appellants and an authorized signatory. The appellant argued that based on the Tribunal's previous decision in Appeal No.E/1574/2010-EX[DB], the show cause notice was not valid as the classification of 'Residual Crude Petroleum Oil' had already been settled. The Tribunal agreed with the appellant's contention, holding that the show cause notice was not sustainable due to the precedent set in the earlier appeal.

Precedent Set by Tribunal Issue:
The Tribunal referred to its previous decision in Appeal No.E/1574/2010-EX[DB] where it was established that 'Residual Crude Oil' is classifiable under Tariff Item No. 2709.00.00. The Tribunal reiterated this classification in the current case, emphasizing the importance of following precedent decisions. As a result, the Tribunal set aside the Order-in-Original, allowed the appeal, and granted the appellant consequential relief in accordance with the law.