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TMI Blog2008 (7) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... .K. Mohideen, JDR, for the Appellant. Shri G.R. Swaminathan, Advocate, for the Respondent. [Order per : P.G. Chacko, Member (J)]. - In this appeal of the Revenue, the question arises as to whether the respondent's product branded "POLEYOL FSO" and cleared from their factory during the period from January 1999 to February 2000 was to be classified under Heading 34.02 of the First Schedule to the Central Excise Tariff Act as claimed by them or under Heading 34.03 of the said Schedule as claimed by the appellant. In their declaration filed under the erstwhile Rule 173B, the respondents classified the item under SH 3402.10 as 'Sulphonated Fish Oil' attracting NIL rate of duty. The Department issued a show-cause notice proposing to clas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant has also relied on H.S.N. Explanatory Notes under Heading 34.02, to say that Heading 34.02 excludes preparations containing surface active agents where the surface active function is either not required or is only subsidiary to the main function of the preparation. In this connection, it is submitted that the surface active property of Poleyol F.S.O. emulsion is only subsidiary to its main function of fat liquoring. It is also pointed out that the respondents' trade pamphlet itself described 'Poleyol F.S.O.' as a fat liquor. In this connection, the appellant has relied on the Tribunal's decision in General Electric Co. v. Collector - 1986 (26) E.L.T. 620 (T) and the Bombay High Court's judgment in Kulkarni Black Decker v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt's Chemical laboratory and the Chemical Examiner reported thus : "The sample of sulphonated fish oil is in the form of wine red clear liquid and Poleyol FSO in the form of brown emulsion. Each is composed of Sulphonated fish oil and water. Each is organic surface active agent. 0.5% solution of each at 20°C is translucent and no separation of insoluble matter when kept for an hour and reduces the surface tension of water to less than 45 Dynes/Cm. The presence of free fish oil could not established in each. The percentage of sulphated oil content is 81.6 and 35.7 respectively". The above test report, accepted by both sides, indicates that 'Poleyol FSO' answers the test for organic surface-active agents (other than soap) laid down under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arations for the lubricating, oiling, or greasing of textiles, hides, furskins, etc. These may be used to lubricate or soften textile fibres during spinning, to "stuff" leather, etc. They include, for example: mixtures of mineral oil or fatty substances with surface-active agents (e.g. sulphoricinoleates); water-dispersible textile lubricating preparations containing a high proportion of surface-active agents together with mineral oils and other chemicals". According to the above Note, a preparation for lubricating, oiling or greasing leather, hides, etc. is seemingly a mixture of surface-active agent and a mineral oil or fatty substance. But what was found by the Chemical Examiner on chemical analysis in terms of Note 3 to Chapter 34 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mical Examiner's "clarificatory" letter cannot be relied upon to hold that Poleyol FSO' is Sulphonated Fish Oil containing free oil and could be used as a fat liquoring agent. The statement of the Managing Director of the company to the effect that 'Poleyol FSO' is also used as a fat liquoring agent in leather tanning industry per se cannot be relied upon to classify the product under SH 3403.90. 4. The Revenue has relied on HSN Note (under Heading 34.02) which says that preparations containing surface-active agents where the surface active function is not required or is only subsidiary to the main function of the preparation are not covered by Heading 34.02. According to this Note, if the main function of such preparation is one specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he imported material (Sulphonated Fish Oil) in water content only. It answered the test laid down under Chapter Note 3 for classification as an organic surface-active agent (other than soap) under SH 3402.10. The peremptory requirement for excluding the item from the scope of Heading 34.02 is to show that its surface-active function is not required or is only subsidiary to the main function (fat liquoring). The appellant has not adduced evidence to this effect. In the result, the subject goods shall remain classified as Sulphonated Fish Oil under SH 3402.10 of the CETA Schedule. The decision rendered by the lower appellate authority is sustained and the appeal is dismissed. (Pronounced in open court on 3-7-2008) - - TaxTMI - TMITax - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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