Central Excises - Erstwhile T.I. 68 - Scope of the term "Alcohol - All sorts" appearing under erstwhile T.I. 68 - Regarding - Central Excise - 120/2/87-CX.3

Central Excises - Erstwhile T.I. 68 - Scope of the term "Alcohol - All sorts" appearing under erstwhile T.I. 68 - Regarding F. No. 120/2/87-CX.3 Dated 6-2-1987 Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excises - Erstwhile T.I. 68 - Scope of the term "Alcohol - All sorts" appearing under erstwhile T.I. 68 - Regarding. Attention is invited to the Board's Circular letter No. 4/84-CX.1, dated 1-10-1984 whereunder it was stated that "alcohol - all sorts", excluded from the scope of T.I. 68, refers to alcohols of all kinds whether portable or otherwise, and to say that a doubt has been raised as to whether the said Circular, dated 1-10-1984 was intended to exclude also the chemicals in the class of organic compounds containing hydroxyl groups such as polyethylene glycol, pentaerythritol, sorbitol etc. from the scope of item No. 68 of the erstwhile Central Excise Tariff. 2. The matter has since been examined by the Board, and the following points are hereby clarified : (a) In the Board's earlier Circular letter No. 4/84-CX.1, dated 1-10-1984, it was neither intended nor specifically stated that all organic chemicals containing hydroxyl groups, such as, pentaerythritol, Sorbitol etc. would get excluded from the scope of the Item No. 68 of the erstwhile CET; (b) In the absence of any definition of 'alcohol' in item No. 68 of the erstwhile CET for the purpose of its exclusion from the scope of that item, the term 'alcohol' should be understood as per commercial parlance. Chemicals, which may technically come in the broad grouping of alcohols, such as pentaerythritol, sorbitol, lauryl alcohol, ethyl alcohol etc., by virtue of their hydroxyl group, but which are commercially not known or understood as 'alcohol' cannot be categorised as 'alcohol' for the purpose of interpreting the tariff description of item 68. There are Court judgments to support the view point that in deciding tariff classification of a product it is the commercial identity of a product which has to prevail over the technical description of the product, where the product is not specifically defined in the taxing statute. [Delhi Cloth and General Mills Co. Ltd. v. State of Rajasthan - 1980 (6) E.L.T. 383 (S.C.), Dunlop India Limited v. Union of India - AIR 1977 S.C. 597, State of U.P. v. Kores India Limited - AIR 1977 S.C. 132, Commissioner of S.T. v. S.N. Brothers - (1973) 31 S.T.C. 302 (S.C.)]. (c) In the case of polyethylene glycol which is an organic compound containing hydroxyl groups, the Board had specifically clarified, vide Tariff Advice No. 3/81, dated 2-1-1981 that the product was classifiable under T.I. 68 of the erstwhile CET. (d) In the H.S.N., undernatured and denatured ethyl alcohol, whether for human consumption or for industrial consumption, are classified under Chapter 22, whereas, all such products like pentaerythritol, Sorbitol, Cetyl alcohol etc. which are organic compounds of the hydroxyl groups are mentioned as a separate and distinct class of goods under Chapter 29 of the H.S.N., thus indicating the line of differentiation. 3. It is accordingly clarified, for the sake of removing all doubts that the Board's Circular letter No. 4/84- CX-1, dated 1-10-1984 was not intended to convey that all organic compounds containing hydroxyl groups, such as pentaerythritol, sorbitol, polyethylene glycol etc. would come in the category of "alcohol - all sorts". Such chemicals being not commercially understood as alcohols are not entitled to the benefit of exclusion as "alcohol, all sorts" from the purview of erstwhile tariff item 68 of the CET.