9911796707
TMI Blog1990 (7) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... classification list classifying the aforesaid products under sub-heading 2711.12 of the schedule to the Central Excise Tariff Act, 1985. The department approved the classification list accordingly. When the classification list was filed by the appellants for the first time on the introduction of the CETA, 1985, these 3 products were specifically excluded from Chapter 29 of the Act by virtue of Chapter Note 2(c). It stated that this chapter does not cover ethylene, propylene, butadiene or butylenes (Chapter 27) . All these products at that time were covered under Chapter 27 and therefore, the Assistant Collector had correctly accorded his approval to their Classification under sub-heading 2711.12. The Finance Bill, 1986 however made a change in Chapter Note 2(c) of Chapter 29 relating to organic chemicals and when this Bill became an Act on 13-5-1986, the words ethylene, propylene, butadiene were omitted from Chapter Note 2(c) of Chapter 29. After this omission, Chapter Note 2(c) of Chapter 29 read, Methane or propane (Chapter 27) . In other words, after this amendment was carried out, the three products of the appellants, viz. ethylene, propylene and butadiene became eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further pointed out that interpretative rules to the Tariff have also to be seen and according to Rule 3-A has to be applied and on such application, the products in question would fall under Chapter 27-CETA, 1985. 3. Appearing for the department, the learned DR Shri S. Chakraborty pointed out that the origin of the demands in this case was the visit of the Asstt. Collector to the factory premises and when it was found, on a scrutiny of the records that the products ethylene, propylene and butadiene manufactured by M/s. IPCL are pure having more than 95% purity on their own admission. Shri Chakraborty further underlines that with the adoption of the new Central Excise Tariff Act, 1985, classification has to be with reference to the Section Notes, Chapter Notes and the Tariff Headings as well as the rules of interpretation. After the amendment in May, 1986, Chapter Note 2(c) read with Chapter Note 1(a)of Chapter 29 would clearly make for inclusion of these products under that chapter as separate chemically defined organic compounds, whether or not containing impurities. In the absence of any guideline in the Tariff itself regarding the criteria to determine impurity and also to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existing position that the Minister had prefaced this remark by the word generally , and in any case, the learned DR urged that there was no need to seek guidance from the speech of the Minister when the statutory provision is clear as in this case. The Godrej Soap case relied upon by the appellants will also not be to their advantage, according to the DR, because in that case, the facts were not similar because in this case, the three products in question were originally specifically excluded from Chapter 29 by virtue of Chapter Note 2(c) and were deleted from the list of products so excluded by the amendment to the Chapter Note 2(c) and were deleted from the list of products so excluded by the amendment to the Chapter Note with effect from 13-5-1986. The matter considered in the Godrej Soap case was classification as between competing Chapters 15 and 29 without any exclusion Note as in the present case. 4. In reply, Shri Iyer for the appellants emphasised that Chapter 29, Note 1 thereof is with the preface, Where the context otherwise requires . The products in question, according to the appellants, are not separate chemically defined compounds but admixtured with other subst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utadiene became eligible for classification under Chapter 29. Chapter Note 1(a) to Chapter 29 reads as follows : 1. Except where the context otherwise requires, the headings of this Chapter apply only to : (a) Separate chemically defined organic compounds, whether or not containing impurities. Chapter Note 1(a) to Chapter 27 reads as follows : 1. This Chapter does not cover : (a) Separate chemically defined organic compounds, other than pure methane and propane which are to be classified in heading 27.11" . The argument that even after the amendment to Chapter Note 2(c), the three products should continue to be classified under Chapter 27 because they are specifically mentioned under sub-heading 2711.12 ignores, in our view, the relevance and importance of the Chapter Notes in the matter of classification of the product under the Central Excise Tariff Act. Prior to 13-5-1986, the Chapter Note 2(c) under Chapter 29 not only excluded these three products from that Chapter but also indicated that they will fall under Chapter 27. With the amendment to these Chapter Notes by deletion of these three products, the classification will have to be considered by applying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te 29, the products would fall under Chapter 29, classification thereof under that Chapter will be maintainable. The added ground taken by the department on criteria of purities for which the department has been drawing upon the Explanatory Notes to the HSN would show that the criterion of purity so relied upon is not apparently the sole basis for classification, but the main criterion as contained in Chapter Note 1(a) to Chapter 29 that the products are separate chemically defined organic com- pounds has been applied in this case. For the same reason, the fact that the impurities are not identified may not be material. In this context, the legal importance of the Chapter Notes and Section Notes in the Tariff has been tellingly brought out by the five-Member Bench decision of this Tribunal in the case of Sawashtra Chemicals v. Collector of Customs - 1986 (23) E.L.T. 283. The Tribunal observed if it were a simple matter to decide the classification of the subject spare parts made of carbon by a comparative reading of the two headings just by themselves, we would have no hesitation in saying that Heading 84.65 was more specific for the goods which were indisputably machinery parts. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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