2018 (7) TMI 8 - AT - Central Excise

Classification of goods - Bituminous compounds 33-S, -22, -33, -43 and 33-5 - ALPHA SMR-65, -75, -120 - whether to be classified under sub-heading 2715.10 or under sub-heading 2715.90 of Central Excise Tariff? - Held that - This is the kind of heading where the classification would be determined by the use. If the chemical composition of the product is to be the determinative factory or classification, then the sub-heading 2710.60 would become redundant as all lubricating oils falling under 2710 would find classification in other subheadings described on the basis of the technical features and parameters of the material. The assertion made in the impugned order that the classification cannot be determined on the basis of the use of the product is misplaced, especially in the instant case where the sub-heading itself requires the use of the product as a major criteria for classification. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of Bituminous compounds under Central Excise Tariff - Period of dispute February 1997 to March 1998.

Analysis:
The appellant, M/s. Castrol India Ltd., filed appeals regarding the classification of Bituminous compounds under the Central Excise Tariff. The dispute revolved around whether the products were correctly classified under sub-heading 2715.10 or should have been classified under sub-heading 2715.90. The appellant argued that the department was aware of the classification in 1990, and the extended period of limitation should not have been invoked. They also contended that the product should be understood based on industry perception, not just the technical meaning. The order-in-original highlighted that the product in question was a compound made of different ingredients, falling under sub-heading 2715.90, as it had distinct properties from its constituents. The department's stance was that the Bituminous compound was classifiable under chapter heading 2715.90, based on the chemical composition and properties of the product.

Regarding the claim for classification under Chapter heading 2710.60 as lubricating oil, the appellant argued based on end-use and expert opinions. However, the tribunal emphasized that classification cannot solely rely on end-use and must consider statutory rules of interpretation. The tribunal referred to previous judgments to support the classification under the specific heading of 2715.90. The decision of the Tribunal in the case of CCE, Bombay vs. Indroll Lubricants & Specialities Ltd. was cited to demonstrate the exclusion criteria for lubricating oil under sub-heading 2710.60.

The issue of classification based on end-use versus product composition was crucial. The tribunal noted that the heading 2710.60 for lubricating oil specifically depended on the use of the product. The description in the sub-heading emphasized the ordinary use for lubrication. The tribunal concluded that in cases where the heading itself relies on the product's use, classification based on end-use is appropriate. The assertion that classification should not be based on product use was deemed incorrect, especially when the heading itself required use as a major criterion for classification. Consequently, the appeals were allowed, highlighting the importance of considering end-use in classification under the Central Excise Tariff.

Overall, the judgment delved into the intricate details of classification under the Central Excise Tariff, emphasizing the significance of both the chemical composition and the end-use of the product in determining the appropriate classification. The tribunal's analysis provided clarity on the classification criteria, citing relevant legal precedents to support the final decision in favor of the appellant, M/s. Castrol India Ltd.