Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs Reliance Industries Ltd. on 17 May, 2000
Equivalent citations: 2000(119)ELT26(TRI-DEL)
ORDER
K. Sreedharan, J. (President)
1. These appeals are at the instance of the Revenue. The dispute is about the classification of Heavy Normal Paraffin. The assessee wants it to be classified under tariff subheading 2710.29, while the Revenue under 2710.99. The Assistant Collector, adjudicating authority, classified the same under 2710.99. That order was challenged before the Collector (Appeals), who reversed the order of the adjudicating authority and held that the product, Heavy Normal Paraffin (HNP) is classifiable under 'sub-heading 2710.29. Hence these appeals.
2. When the issue came before a Bench of two Members, they took note of the decision rendered by this Tribunal in Indian Petrochemicals Corporation reported in 1990 (46) E.L.T. 173 (Tribunal). That Bench consisting of 3 Members, while disposing of that appeal took the view that HNP is clasifiable under old tariff Item 7. The Bench which referred the issue was of the view that HNP is different from Kerosene as commonly understood and that the two products are different. So the following issue was referred for decision by a Larger Bench.
"Whether Heavy Normal Paraffin (HNP) which was classified by the Bench order cited above 1990 (46) E.L.T. 173 (Tribunal) under Item 7 of the old tariff was classifiable on the same ground under new Tariff 2710.29 or it was classifiable under Heading 2710.99 as it is a product different from kerosene" ?
3. Item 7 of the old tariff was in the following terms :
"7. Kerosene (which is ordinarily used as illuminant in oil burning lamps), and aviation turbine fuel, that is to say, and mineral oil (excluding mineral colza oil and turpentine substitute) which has a smoke point of eighteen millimetres or more and has a final boiling point not exceeding three hundred degrees of Centigrade thermometer -
(i) Aviation Turbine Fuel,
(ii) Others"
Relevant tariff entry for decision in this case relating to kerosene as entered in sub-heading 2710.19 is -
"Kerosene (which is ordinarily used as an illuminant in oil burning lamps) and aviation turbine fuel, "that is to say" any hydrocarbon oil (excluding mineral colza turpentine substitute) which has a smoke point of eighteen millimetres or more and has a final boiling point not exceeding 300°C."
Above quoted entries do not vary much between them. Instead of any mineral oil, the new entry takes in any hydrocarbon oil. From the definition it can be seen that kerosene and aviation turbine fuel are hydrocarbon oils. It can be any other hydrocarbon oil other than mineral colza or turpentine substitute as well. Such oil should have a physical property of having a smoke point of eighteen millimetres or more and final boiling point not exceeding 300°C. Any hydrocarbon oil which satisfy these physical properties will fall within the tariff sub-heading 2710.19. Out of the hydrocarbon oils having the above physical properties, mineral colza oil and turpentine substitute alone should be excluded. In other words, kerosene and aviation turbine fuel falling under 2710.19 must be hydrocarbon oils having the above-mentioned properties but excluding mineral colza oil and turpentine substitute. It is common case that HNP is a hydrocarbon oil. It is also the admitted case that HNP has a smoke point of eighteen millimetres or more and has a final boiling point not exceeding 30°C.
4. Learned Departmental Representative submits that HNP though satisfies the physical properties mentioned for 'Kerosene' is not known as kerosene in the common parlance and therefore it will not fall within the category of Kerosene defined in Chapter 27. According to him, kerosene and aviation turbine fuel may take within its ambit many hydrocarbon oils excluding mineral colza oil and turpentine substitute. Such oils, even if satisfy the physical property mentioned therein will not fall under 2710.29, but it can fall under 2710.99 because they are not known as kerosene oil or aviation turbine fuel. We are not in a position to agree with this submission. Kerosene and aviation turbine fuel are defined in the new tariff. As per the definition these should take in any hydrocarbon oils other than mineral colza oil and turpentine substitute which satisfy the physical properties mentioned therein. Department was not placed before us any data showing that any oil other than hydrocarbon oil which satisfy the physical properties is known in the common parlance as kerosene oil or aviation turbine fuel. Therefore, the definition of kerosene and aviation turbine fuel in Chapter 27 takes within its ambit any hydrocarbon oil other than mineral colza oil and turpentine substitute which has a smoke point of 18 millimetres or more and has a final boiling point not exceeding 300°C
5. Refined diesel oil has been defined below the item Kerosene. That definition is also similarly worded -
"Refined diesel oil, that is to say, any hydrocarbon oil (excluding mineral colza oil and turpentine substitute) which has its flash point at or above 25 C and satisfies either of the following requirements :"
(i) the il has a smoke point of 10 millimetres or more but less than 20 millimetres, or
(ii) the oil has a smoke point of less than 10 millimetres but has a viscosity of less than 50 seconds by Redwood I Viscometer at 37.8oC and satisfies the following conditions -
(a) leaves carbon residue of less than 1/4 per cent by weight when tested by Raamsbottom Carbon Residue Apparatus, and
(b) is lighter in colour than 0.04 Normal Iodine solution when tested by colour comparison test."
Here, any hydrocarbon oil excluding mineral colza oil and turpentine substitute having the physical properties mentioned therein fall within the definition of Refined Diesel Oil. Tariff Heading 2710.70 deals with Hydrocarbon oil which has its flash point at or above 94°C and is ordinarily used for the batching of jute or other fibre. Hydrocarbon oil is an item in Chapter 27. Any hydrocarbon oil other than mineral colza oil and turpentine substitute will fall under the category of Kerosene and Aviation Turbine Fuel if it has a smoke point of 18 millimetres or more and has a final boiling point not exceeding 300°C. Similarly, any hydrocarbon oil other than mineral colza oil and turpentine substitute having different physical properties will satisfy the definition of Refined Diesel Oil.
6. While defining 'Kerosene' and 'Aviation Turbine Fuel', legislature adopted the words, "that is to say". This expression was apparently meant to exhaustively enumerate the kinds of oil falling within the category of kerosene and aviation turbine fuel (vide decision of the Supreme Court in State of Tamil Nadu v. Pyare Lal Malhotra -1983 (13) E.L.T. 1582. Enumeration of various kinds of oils coming within the category of kerosene and aviation turbine fuel can be any hydrocarbon oil having a smoke point of 18 millimetres or more and has a final boiling point not exceeding 300°C. Out of the hydrocarbon oils mineral colza oil and turpentine substitute are to be excluded because of the specific exclusion contained in the definition.
7. In Lubri-chem Industries Ltd. v. Collector of Central Excise, Bombay -1994 (73) E.L.T. 257 (S.C.), the Supreme Court had to consider the classification of liquid paraffin having a flashing point above 76 degree 'Fahrenheit and a flame height of more than 10 mm. but less than 18 mm. Appellant contended that since liquid paraffin was processed from spindle oil and spindle oil was expressly excluded from the purview of tariff item 8 by reason of Clause (b) of Explanation II thereto, the said liquid paraffin fell outside T.I. 8. This contention was negatived because Explanation II states that T.I. 8 does not include lubricating oils, including spindle oils; flushing oils and jute batching oils. The exclusion, therefore, is of lubricating oils. Spindle oils are set out as one example of lubricating oils and therefore lubricating oils fall outside the purview of T.I. 8 and that there is nothing to show that liquid paraffin is a lubricating oil and consequently liquid paraffin does not fall outside T.I. 8. Similarly, on the facts on hand no party before us advanced an argument that HNP is not hydrocarbon oils. Nor have they a case that HNP is not having a smoke point of 18 millimetres or more and a final boiling point not exceeding 300°C.
8. The decision of this Tribunal in Indian Petrochemicals Corporation-1989 (23) ECR 373 which is same as 1990 (46) E.L.T. 173 was challenged by the Revenue before the Supreme Court. Their Lordships dismissed the appeal as seen in 1999 (113) E.L.T. 771. Thus, the said decision governs the field as on today.
9. In view of what has been stated above, we do not find any ground to classify HNP under heading 2710.99. It is to be classified under 2710.29 as contended by the assessee and the lower appellate authority.
10. Appeals fail and are accordingly dismissed.