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TMI Blog2023 (6) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... said parameters are matching with the minimum or maximum standards fixed as per IS 1745 standards. There is a vast difference between the minimum IFB and maximum FBP fixed as per IS standard 1745 and the result received for the impugned goods. Hence, the impugned goods cannot be classified under chapter sub heading 27101920, on the basis of the parameters available in the CRCL, Test Report dated 26.11.2020. Revenue has relied upon the Note 4 to Chapter 27 for classifying the impugned goods under the CTH 27101920 - the condition as prescribed in Note 4 has not been verified in the CRCL report. It is the primary condition required to be tested for classifying any goods under CTH 27101920. From the said Note, it is evident that for the purpose of sub heading 27101920, the light oils and preparations are those of which 90% or more by volume (including losses) distil at 210 degree Celsius, but the test report is silent about it. As per the Test Report, the FBP is 218, which means 100% of the goods will evaporate at 218 degree Celsius itself whereas for classification of the goods as solvent 125/240 under CTH 27101920, the requirement as per Note 4 is that only a maximum of 90% should e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... system, it was noticed that the Respondent has imported the same item in the past, which has been already cleared from Customs. The details of such consignments is tabulated as below:- Table-1 Sl. No. BE No. BE Dt. Item Desc. Ass. Value (INR) Item Duty (INR) GTY (KGS) Unit Price (USD) 1. 6956777 20-02- 2020 LOW AROMATIC WHITE SPIRIT (LAWS) IN FLEXI BAG. 3830519.24 938094.20 85785.000 0.600 2. 8597573 26-08- 2020 LOW AROMATIC WHITE SPIRIT (LAWS) 2701736.40 661655.20 64000.000 0.550 TOTAL 6532255.64 1599749.40 149785.00 4. Representative samples were drawn from each container of the Bill of Entry no.9391372 dated 31.10.2020 and sent to CRCL, Kolkata vide Test Memo No.1077140 dated 20.11.2020. CRCL Test Report lab No.2139-2142/27-191-194 dt.20.11.2020 communicated their report on 26.11.2020, as follows:- "The sample is in the form of colorless liquid. It is composed of 'Mineral Hydrocarbon Oil (more than 70% by Wt)' having following parameters: Table-B Sl. No. Density at 15 degree C in gm/cc Flash point (Albel) Degree celcius Sediment Acidity IBP FBP Ash Content 1. 0.8133 41 Nil Nil 148 degree C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 20.02.2020 and 8597573 dated 26.08.2020, he imposed Redemption fine of Rs 2,00,000 and penalty of Rs.5,00,000. 11. Aggrieved against the order dated 27.07.2021, the importer filed appeal before Learned Commissioner (Appeals) who vide Order-in- Appeal dated 13.12.2021 modified the Order-in-Original dated 27.07.2021, as under; (i) Set aside the confiscation of the goods imported under the Bills of Entry dated 6956777 dated 20.02.2020 and 8597573 dated 26.08.2020, as the goods have already been cleared from customs. He also set aside the redemption fine and penalties imposed against these Bills of Entries. (ii) Upheld the confiscation of the goods imported under Bill of Entry No 9391372 dated 31.10.2020. But, allowed the goods to be redeemed on payment of redemption fine of Rs 2,00,000 for home consumption instead of re-export. (iii) Upheld the penalty of Rs 3,00,000 imposed under section 112a(i) against the Bill of Entry No 9391372 dated 31.10.2020 Aggrieved against the impugned order, the Department has filed the present appeal. 12. In their grounds of Appeal the Appellant (Department) has raised the following grounds for consideration: (i) On the basis of CRCL,Kolk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0% by wt.) and meets the criteria of "Light Oil and Preparations". It has the other parameters of flash point 41/42 degree Celsius and IBP 146/148 degree Celsius and FBP 218/220 degree Celsius. However, on their request when the sample was sent for test in IOCL, the IOCL test report dated 12.02.2021, clearly indicated that the impugned goods have the characteristics of Mineral Turpentile Oil . This test report vindicates their contention that the impugned goods declared as Low Aromatic White Spirit are nothing but Mineral Turpentine Oil meriting classification under tariff item 271019990 of the Customs Tariff Act, 1975. (iii) The department has ignored the IOCL test report and again sought clarification from CRCL, Kolkata. Without any further test, CRCL, Kolkata has clarified in its report dated 19.02.2021 that the goods in question may be considered as Solvent 125/240 as per IS 1745:2018 for Petroleum Hydrocarbon Solvents. Again reference was made by the department to CRCL, New Delhi which vide report dated 05.05.2021 opined on the basis of parameters tested by IOCL and CRCL, Kolkata that the sample met the requirement of "Light Oil and Preparations" as mentioned in subheading n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore attracts violation of FTP for invocation of section 111(d) of the Customs Act, 1962.They submitted that they have applied for enhancement of the quantity which has since been approved. Therefore, section 111(d) of the Customs Act, 1962 is not applicable as far as the impugned goods are concerned. 17. Heard bothsides and perused the appeal records. 18. The issue to be decided here is the classification of the goods 'low aromatic white spirit' imported by the Respondent. The Respondent has classified the goods under CTH 27101990 and filed the Bill of Entry No 9391372 dated 31.10.2020. Revenue has reclassified the said goods under CTH 27101920 on the basis of Test Report of CRCL, Kolkata. The contention of Revenue is that the impugned goods are rightly classifiable as 'Solvent 125/240' as per IS 1745:2018. 19. We observe that the Revenue has reclassified the goods mainly on the basis of the Test Report received from CRCL, Kolkata. Hence, it is necessary to analyze the contents of the report and examine whether the Test report findings indicate that the impugned goods meets the specifications required for categorizing it as 'solvent 125/240, as per IS 1745:2018. 20. It is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w 25 degree Celsius. The classification adopted by the Ld. Commissioner is not in consonance with the Note no. 4 to Chapter 27 of the Tariff which states that "Light Oil and Preparations" are those of which 90% or more by volume (incl. losses) distilled at 210 degree Celsius, whereas the Chemical Examiner has stated that the range of distillation of product is 35 degree to 58 degree Celsius which is much below 210 degree Celsius. Hence the classification under chapter 271011 cannot be adopted. Similar observations have been made by the Tribunal in the aforesaid decision. 9. In view of the aforesaid, the classification adopted by the Ld. Commissioner cannot be approved and hence, the entire duty demand, interest and penalty are set aside and the appeals are allowed with consequential relief. The personal penalty imposed on Sri Bindhyachal Singh, Accountant, is also set aside." The aforesaid decision of the Tribunal was upheld by Hon'ble Supreme Court with the following observations: "2. We have heard Mr. Balbir Singh, Learned ASG appearing on behalf of the appellant. We have gone through the impugned judgment and order passed by the Customs, Excise and Service Tax Appellate T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 210 degree Celsius, but the test report is silent about it. As per the Test Report, the FBP is 218, which means 100% of the goods will evaporate at 218 degree Celsius itself whereas for classification of the goods as 'solvent 125/240' under CTH 27101920, the requirement as per Note 4 is that only a maximum of 90% should evaporate at 240 degree celsius. Since the entire 100% of the goods evaporate at 218 degree celsius itself, the goods are not meeting the requirements as specified under Chapter Note 4 of Chapter 27, accordingly we hold that the impugned goods cannot be classified under CTH 27101920as claimed by the Revenue. 26. The Respondent cited the decision of the Tribunal in the case of Krishna Technochem Pvt Ltd, which has been upheld by Hon'ble Supreme Court wherein it has been observed that the word used in Note 4 of chapter 27 is 'at' and not 'upto'. This would mean that the minimum IBP and maximum FBP should be exactly 125 and 240 for classification of the said goods as solvent 1255/240 under 27101920. Even if it is not exactly the same, it should be closer to the parameters of minimum IFB of 125 and maximum FBP of 240. In the present case the IFP of 148 and FBP of 218 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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