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TMI Blog2018 (4) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... ollows:- Heading No. Sub-heading No. Description 27.10 Petroleum oils and oils obtained from bituminous minerals, other than crude; Preparations not elsewhere specified or included, containing by weight 70% or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations. - Motor spirit, that is to say, any hydrocarbon oil (excluding crude mineral oil) which has its flash point below 25°C, and which either by itself or in admixture with any other substance, is suitable for use as fuel in spark ignition engines: 2710.11 -- Special boiling point spirits (other than Benzene-Toluol) with nominal boiling point range 55-115°C. 2710.12 -- Special boiling point spirits (other than Benzene, Benzol, Toluene and Toluol) with nominal boiling point range 63-70°C. 2710.13 -- Other special boiling point spirits (other than Benzene, Benzol, Toluene and Toluol) 2710.14 -- Naphtha 2710.15 -- Natural Gasoline Liquid 2710.19 -- Other After 01.03.2005 the relevant headings were as follows:- T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es that for classification of the product under subheading 2710.13, no boiling point range is specified. He argued that since sub-heading 2710.13 no boiling point range is specified. Thus, boiling point range is no criterion for its classification. 2.2 Learned AR argued that SBP spirits are Hydrocarbon oils having boiling point range from 35 Degree Celsius to 165 Degree Celsius. Criterion for its classification being for a volumetric distillation test as per which 5% volume to 90% volume of the product should distil out within 60°C temperature difference. As per prescribed under supplementary note (a) to Chapter 27 referred in above. 2.3 Learned AR pointed out that Shri R. Ganesh, Project Manager of BPCL statement dated 8/11/2004 had stated that to make LAN, the following streams are taken to LAN pool. (i) 'Splitter I Top' stream from Reformer Feed Unit (RFU) with IBP-FBP as 26-59°C. (ii) 'Splitter II Top' stream from New Solvent Unit (NSU) with IBP-FBP as 32-56°C (iii) 'Splitter III Bottom' stream from New Solvent Unit (NSU) with IBP-FBP as 83-117°C and (iv) HCP Stabilized Naphtha with IBP-FBP as 43-126°C 2.4 Learned AR pointed out that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 112 deg. C. 53 deg. C. 2.5 Learned AR further pointed out LAN is a product different from the Naphtha. He argued that Naphtha is obtained by cracking of crude oil and as boiling range of temperature from 30°C to 325°C. He argued that LAN manufactured by BPCL is a blend of specified refined streams having boiling point range of 34°C to 160°C. He argued that the product manufactured by BPCL is actually 'Other Special Boiling Point Spirits'. 2.6 Learned AR relied on the decision of the Tribunal in the case of Saurashtra Chemicals, Porbandar Vs. Collector of Customs, Bombay - 1986 (23) ELT 283 to assert that the relevant headings in the tariff have to be interpreted and applied in the light of the Section Notes and Chapter Notes which are statutory and binding like the headings themselves. Learned AR also relied on the decision of Hon'ble Apex Court in the case of Collector of Central Excise, Hyderabad Vs. Fenoplast (P) Ltd. - 1994 (72) ELT 513 (SC), wherein the Hon'ble Apex Court has held that if any term or expression has been defined in the enactment then it must be understood in the sense in which it is defined but in the absenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hod as explained in the notification, for example, Notification No. 27/89 was as follows: "The amount of naphtha consumed in the manufacture of the products shall be calculated by subtracting from the quantity of naphtha received by the factory manufacturing the products, the quantity of naphtha returned by the factory to the refinery.........." Learned Commissioner has accepted the contention of the assessee that the remnant naphtha, returning to the refinery after extraction of certain specified product is naphtha only. It is submitted that notification does not settle the classification of the product. Hence reference to the notification(s) is not appropriate. 2.10 In the impugned order, learned Commissioner has relied upon the Tribunal's decision in the case of Indian Petrochemicals Corpn. Vs. CCE.- 2005 (186) ELT 81 holding that return stream naphtha is nothing but naphtha classifiable under sub-heading 2710.14. Facts of this case have been recorded in para 2 of the Tribunal's Order. As per the said facts, IOC supplies raw naphtha to IPCL for manufacture of petrochemicals by thermal cracking. The bulk of the naphtha so supplied gets consumed in the process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 210°C (ASTM D 86 method)." So far as the first issue is concerned the revenue had relied on the following test reports of the four streams which go into the LAN pool as well as sample of LAN ANALYSIS OF SAMPLES (LAN TK, SP 1 TOP, SP 2 TOP, SP3 BOTTOM, STAB. NAP.) LAN from Tank TK 521 SP I Top (RFU) SP 2 Top (NSU) SP 3 Bottom(NSU) Stab. Nap. (HCP) Date 30.05.05 31.05.05 31.05.05 31.05.05 31.05.05 Time 1430 Hrs 1300 hrs 1335 hrs 1345 hrs 1230 hrs Distillation by ASTM D:86 IBP °C, 41 31 35 85 43 5%v recovered @°C, 56 34 41 88 59 10%v recovered @°C, 59 35 42 89 61 20%v recovered @°C, 63 36 42 91 66 30%v recovered @°C, 68 37 43 93 70 40%v recovered @°C, 72 38 45 95 76 50%v recovered @°C, 77 39 46 97 82 60%v recovered @°C, 82 40 48 100 88 70%v recovered @°C, 87 42 50 103 95 80%v recovered a@°C, 94 45 54 107 103 90%v recovered @°C, 105 51 60 114 112 95%v recovered a@°C, 114 57 64 120 119 FBP °C, 128 61 66 129 127 Recovery, %v 98 98 98 98 98 Residue+ Loss, %v 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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