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TMI Blog2019 (1) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 2710.12. Imposition of redemption fine - penalty - Held that:- The section is triggered when the prohibited or restricted goods are imported without due authorization. The bonafide or malafide intention of the importer is of no relevance so far as confiscation under section 111(d) of the Customs Act is concerned - Section 111 (m) relates to the description made by the importer at the time of import and, therefore, the bonafide or malafide of importer is of relevance. In case Section 111(d), the belief of importer is not relevant - as regards penalty, It is apparent that if the goods are held as liable to confiscation for whatever reason penalty under section 112 (a) can be imposed. Malafide/bonafide or the belief of the importer in all is of no relevance. There is no element of differential duty involved in this case - Keeping in view that the only element of violation involved was with reference to policy and that there was no element of duty involved the quantum of penalty and redemption fines are excessive - the penalty and redemption fines are reduced to ₹ 20 lakhs each. Appeal allowed in part. - Application No. C/ORS/10792/2018, Appeal No. C/12518/2018-DB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other than waste oils. 271012 -- Light oils and preparations : --- Motor Spirit : 27101211 ---- Special boiling point spirits (other than benzene, toluol) with nominal boiling point range 55 - 115 C kg . 10% - 27101212 ---- Special boiling point spirits (other than benzene, benzol, toluene and toluol ) with nominal boiling point range 63 - 700C kg . 10% - 27101213 ---- Other Special boiling point spirits (other than benzene, benzol toluene and toluol) kg . 10% - 27101219 ---- Other kg . 10% - 27101220 --- Natural gasoline liquid (NGL) kg . 10% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. Counsel argued that supplier s report dated 26.03.2018 and 17.07.2018 and confirmation letter dated 17.07.2018 clarified that the goods are classifiable under heading 2710 19 90. Ld. Counsel also relied on IS specifications of solvents to assert that the product is in the nature of solvent and, therefore, the product should be classified along with the classification of other solvents‟ i.e. 2710 19 90. Ld. Counsel also relied on the data sheet of Shell Chemicals dated 19.10.2007 which describes the specifications of this product namely White Spirits‟. The said report describe the white spirits is a wide boiling range, medium evaporating solvent widely used in the paint, ink and dry-cleaning industries. Ld. Counsel also relied on the data sheet of Shell Chemicals issued in November, 2001 relating to Low Aromatic White Spirit. The said data sheet describe Low Aromatic White Spirit as a hydrodesulphurised straight-run hydrocarbon solvent with an aromatics content, depending on the crude oil from which it is refined, of approximately 18%. Ld. Counsel argued that the heading 2710 12 90 related to fuels whereas the heading 2710 19 90 related to solvents. Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icy condition-5 of the Chapter 27 of ITC (HS) Schedule-1. The policy condition of the Chapter 27 is reproduced below:- Import allowed through IOC subject to para 2.20 of Foreign trade policy except for the companies who have been granted rights for marketing of transportation fuels in terms of Ministry of P NG‟s Resolution No. P=23015/1/2001-MKT dated 08.03.2002 including HPCL, BPCL IBP who have been marketing transportation fuels before this date. Thus, if the imports are in violation of aforesaid condition, then the same would be liable to action under the Customs Act. 4.1 The said restriction is specifically applicable to CTH 2710 12 90, claimed by Revenue and not to 2710 19 90, claimed by the appellant. Consequently, depending on the correct classification of the product, the ITC restriction would apply to the imports. 4.2 The heading 2710 of the Customs Tariff Act reads as follows: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egree Celsius Regarding other query, CRCL, Kandla has invited attention to sub heading note 4 and supplementary note (a) of chapter 27 of customs tariff . 23.1.4 I find that the importers vide their letter dated 26.03.2018 reiterated that their product is Low Aromatic White Spirit (LAWS for short) I Mineral Turpentine Oil as it follows the Indian Standards 1745-1978 (reaffirmed 2011. I find that vide letter dated 09.04.20 18 the import group sought further clarification from the CRCL, Kandla. The CRCL, Kandla vide their letter dated 13.04.2018, reported that (a) As per the literature available here it is stated that based on molecular compositional data on petroleum there has been five sets of fractions of petroleum. These fractions are defined by boiling points. 1. Gases (C1.-C4) 2. Naphtha (initial boiling point -210 0) 3. Mid distillate (210 C to 345 C) 4. Vacuum gasoil(345 C-564 C) 5. Residuum The product u/r comes under the second fraction as per the reference Kirk-Othmer Encyclopedia of Chemical Techno Zogyourth edition Volume - 4 (b) Petroleum Product Handbook, (in the appendix Standard Industrial Naptha and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preparations are those of which 90% or more by volume (including losses) distil at 210 C and the sample under reference distills at 90% at 180 C and therefore it meets the requirement of Light Oil. 3. Parameters along with result obtained, if found Low Aromatic White Spirit As Such there is no standard for LAWS, however, the sample meets the requirement of one of the grades as per IS:1 745-1978 (reaffirmed 2011) - Specification for petroleum Hydrocarbon Solvents Parameter obtained in laboratory Standard parameters of solvent 145/205 low aromatic as per 1S1745:1978 i.density at 15 C,g/ml ii Flashpoint(Abel) iii. distillation range initial boiling point (IBP) 50% by volume recovered at 95% by volume recovered at Final Boiling Point (FBP) Iv Aromatic content 0.7810 45 Degree C 148 Degree C 170 Degree C 184 Degree C 184 Degree C 10% by volume To be reported 35 Degree C(min) 145 Degree. C To be reported To be reported 205 Deg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss A material. 19 refers to fire safe API Class B C materials. The next two refer to specific products like 10 for kerosene and 20 for ATF 90 for minor products. HSN Code for the Low Aromatic White Solvent(LAWS) is 27101990. This depends on Flash Point. If the Flash Point is less than 24 C (Ambient temperature), it is considered unsafe and inflammable. Solvents with flash point less than 24 C are classified as 271012 and those with higher flash point as LAWS (ANYSOL -5) are classified as HSN Code -271019. These have been regularly imported from various countries under the HS Code 271090. Typical import data sheet during the period 22 Nov. to 26 Nov. 2016 is given in Appendix -12. HSN codes for some petroleum products are given in Table -5 and relevant extracts from DGFT -ITC (HS) 2710 are given in (Appendix-13). Copies of the two invoice issued by BPCL No. 6000007724 dated 29-04-2017 (Appendix 14) and from HPCL invoice No. 11585 G. 117008209 dated 06-03-2018 (Appendix -15) are attached to show that MTO is being given HSN Code as 2710 1990. The above discussion concludes that high flash solvents, both low aromatic and high aromatic come und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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