9911796707
TMI Blog1990 (9) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... ff Act, 1985, they filed the classification list for the products. The appellants claimed classification of the items under Chapter 29 with exemption under Notification 234/86, but the department contended that the items were classifiable under Chapter 27 and after issue of Show Cause Notice and considering their reply, classification of the items was decided under Chapter 27 i.e. liquid paraffin I.P. under sub-heading 2710.99 and petroleum jelly I.P. under heading 2712.10 respectively by an order of the Assistant Collector dated 26-5-1987 in which the Asstt. Collector also imposed a penalty on the appellants of Rs. 1 lakh. On an appeal against this order, the Collector (Appeals) remanded the case to the Asstt. Collector by his order dated 29-9-1987 with the direction that the Assistant Collector should obtain Chemical Examiner's report and communicate it to the appellants and also to consider the evidence of drug licence produced by the appellants. The Collector (Appeals) also set aside the penalty. The Asstt. Collector, accordingly, passed a fresh order dated 16-12-1987 in terms of the remand order, again confirming the classification after obtaining the Chemical Examiner's repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Chemical Laboratory, Pune, Dr. S. Sivasanker, Assistant Director, National Chemical Laboratory, Pune, Dr. V. Srinivasan, Asstt. Prof. of Chemistry, Loyola College, Madras. They had also furnished Dr. Srinivasan's individual answers to queries on the question regarding the scope of separate chemically defined organic compounds. The learned counsel regretted that the Asstt. Collector in her order did not make any observation on the validity or otherwise on the body of expert opinion submitted by the appellants. The Chemical Examiner also had not responded to the specific queries which the appellants wanted him to answer and his report does not give any categorical opinion that the product is not a separate chemically defined organic compound. On the other hand, according to the appellants, chemically defined organic compounds will have the following characteristics, namely, a unique chemical identity, a behaviour or performance potential or characteristic of a unique nature and susceptibility to being defined chemically in a unique way and it is their case that liquid paraffin IP has unique chemical identity as it is non-aromatic, paraffinic, acyclic hydrocarbon; it has total chemi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rve as a valuable guide in classification. He, thereafter, referred to the HSN Explanatory Note to Chapter 29 which defines separate chemically defined compounds as a single chemical compound which does not contain other substances deliberately added during or after its manufacture (including purification). A Note says that such a separate chemically defined compound might contain impurities and the Note also clarifies what would be the nature of impurities considered for the purposes of the Chapter. The Chemical Examiner's report in the present case has clearly indicated that liquid paraffin IP does not have the characteristic of well defined chemical and it is not a single chemical compound. The learned DR submitted that being a mixture of hydrocarbons and without any known chemical structure of its own, the lower authorities were right in holding that liquid paraffin IP is not a separate chemically defined organic compound and, therefore, fell outside the scope of Chapter 29 and was rightly classifiable under Chapter 27. As regards the Expert opinion submitted by the appellants, the learned DR pointed out that some of these opinions are identically worded and they do not categor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not cover separate chemically defined organic compound to the kind we are dealing now. It needs to be noted very carefully that Chapter 29 can cover a chemically defined organic compound even if it contains impurities. In scientific technology, an impurity has been defined as an undesirable foreign material mi a pure substance". "It is useful to see what the CCCN says about a separate chemically defined compound. It defines it as a single chemical compound of known structure, which does not contain other substances deliberately added during or after its manufacture (including purification). The Nomenclature also clarifies that the separate chemically defined compound falling within Chapter 29 may contain impurities. The term impurities is clarified as applying exclusively to single chemical compound substances whose association with the single chemical compound results solely and directly from the manufacturing process (including purification). The substances (impurities) may result from any of the factors involved in the process and are principally the following :- (a) Unconverted starting materials, (b) Impurities present in the starting materials, (c) Reagents used in the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of hydrocarbons containing compounds of carbon chains of varying lengths. It contains a variety of carbon structures ranging from C-10 to C-40. Even, according to the appellants, liquid paraffin IP is a mixture of saturated non-aromatic, hydrocarbons, containing both acyclic and non-cyclic hydrocarbons. It has been seen from the criteria laid down in the Tribunal's order above that to be a separate chemically defined organic compound, there should be a known structure and when admittedly the product liquid paraffin IP has a verying chemical structure, it cannot be considered as a separate chemically defined compound in terms of the Explanatory Notes in the CCCN or HSN which are identical. The appellants have also not put-fouth, at any stage, what is the chemical structural formula for liquid paraffin IP. On the other hand, from the records, it would appear that liquid paraffin IP is made up of a varying chemical structure. In this context, even the Expert's opinion relied upon by the appellants had not indicated what would be the chemical structure for liquid paraffin IP or its molecular formula. In any case, it is no longer necessary to turn to the various Experts' opinions obtai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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