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TMI Blog2024 (5) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... oleum product should contain more than 50% by weight of benzene, toluene, xylene or naphthalene whereas in the present case the oil content is only 10% and 90 is water, therefore demanding duty considering that product as crude oil is not correct. Without prejudice to above, we further find that it is admitted fact that while converting the vessel from foreign going to coastal run, the custom duty of Rs. 6,95,546/- was paid in regard of the entire quantity of foreign origin oil irrespective whether the subsequently same would be cleaned from the inner walls of the tank by applying water through pressure jet or collected in form of waste/ slop oil from the vessels for clearance , therefore, no custom duty can be demanded for the second time. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of the contracts if at all any customs duty is found payable on the slop, the same may be paid by the appellant and then it was required to be reimbursed to the appellant by the charterer as the slop has no commercial value and that it required cleaning for which the appellant used to provide cleaning service. The appellant was paid job charges @ Rs. 2250 per cubic meter by the charterer towards the service of cleaning of slop from the vessels. 1.2 The case of the department is that during the cleaning the oil taken while cleaning from the inner walls of the tankers which is mixed of dominantly water is liable to custom duty. Accordingly, a show cause notice dated20.09.2006 was issued wherein the following proposals were made against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsequently the same would be cleaned from inner walls of the tank by applying water through pressure jet or collected in form of waste/ slop from the vessels for the clearance no duty of customs is required to be paid second time on the same goods. He invited our attention to Notification No. 43/1997- Cus (NT) dated 11.09.1997 which was in force up till 27.04.2016 and subsequent Notification No. 56/2016 Cus (NT) dated 27.04.2016. It clearly provides that there was an exemption from payment of duty when the vessel was on coastal run. It is evident from the Order-In-Original that the vessel in regard there of duty was confirmed on coastal run. He referred to various documents of vessel Shogun and vessel Jagpadma. From the documents of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. We have carefully considered the submission made by both sides and perused the records. We find that there is no dispute about the fact that the waste oil on which the duty was demanded for an amount of Rs. 4,97,590/- is not imported as such waste. It is obtained while cleaning the inner walls of the tanker by applying water with the help of a pressure jet. Therefore, the oil obtained by cleaning the tanker is pre- dominantly mixed with water. Only approximately 10% is oil and 90% is water. In this position, the waste oil/slop oil cannot be classified as crude oil under heading 2710 in terms of chapter note 3 of chapter 27 which prescribes that the petroleum product should contain more than 50% by weight of benzene, toluene, xylene or n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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