Classification under Heading No. 27.10 or 27.13 or 27.07 - Central Excise - 11/89

Classification under Heading No. 27.10 or 27.13 or 27.07 Circular No. 11/89 Dated 13-2-1989 [From F. No. 87/2/88-CX.3] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Classification under Heading No. 27.10 or 27.13 or 27.07. A doubt has been raised as to whether Speciality oils (Processed Oils) manufactured out of furfural extracts are classifiable under sub-heading No. 2719.50 or 2713.39/2713.30 or under sub-heading No. 2707.90 of the Schedule to the Central Excise Tariff Act, 1985. 2. The matter came up for discussion at the South Zone Tariff-cum-General Conference of Collectors of Central Excise held at Bangalore on 4th and 5th October, 1988. It was pointed out at the Conference that Speciality oils (Processed Oils) under dispute contained aromatic constituents predominately over non-aromatic constituents and therefore, the said goods cannot be classified under Heading No. 27.10 in view of the provisions of Chapter Note 2 of Chapter 27 of CET. In such case, the Conference viewed that the goods in question would be appropriately classifiable under sub-heading No. 2713.39 during the period from 28-2-1986 to 29-2-1988 and under sub-heading No. 2713.30 from 1-3-1988 onwards. The Conference, however, desired that the views/comments of the Deputy Chief Chemist, CRCL might be obtained before the issue was finally settled. 3. Accordingly, the Deputy Chief Chemist, CRCL was consulted on the issue. The Deputy Chief Chemist, CRCL has stated that HSN Explanatory Note under HSN Heading No. 27.13 covers extracts derived from the treatment of lubricating oils with certain selective solvents and thus furfural extracts of different grades would squarely fall under sub-heading no. 2713.39/2713.30 during the relevant period as 'other residues of petroleum oils or of oils obtained from bituminous materials'. The Processed oils (Speciality oils) in question, are manufactured products obtained by blending the said extracts. These are tailor-made products to meet the specific requirements for a particular use viz. rubber processing oils and are individually identifiable as rubber processing oils and thus would cease to be furfural extracts and, for these reasons, the processed oils in question do not remain qualified for classification under sub-heading No. 2713.39/2713.30 as 'other petroleum residues'. In view of the provisions of Chapter Note 2 of Chapter 27, the possibility of classification of such goods under Heading No. 27.10 of CET is also ruled out since aromatic constituents in this case predominate over non-aromatic constituents. The Deputy Chief Chemist, CRCL, has opined that the more appropriate sub-heading for the goods in question would be 2707.90 as 'similar products in which the weight of aromatic constituents exceeds that of the non-aromatic constituents. The Board agrees with the views of the Deputy Chief Chemist in the matter. 4. Accordingly, it is hereby clarified that the 'Speciality Oils' (Processed Oils) in question would be appropriately classifiable under sub-heading No. 2707.90. 5. The above guidelines may be brought to the notice of the lower field formations and the trade interests also may be suitably advised. 6. All pending assessments may be finalised on the above basis.