Custom, Excise & Service Tax Tribunal
Cce, Kanpur vs M/S.Pacific Leather (P) Ltd on 21 June, 2011
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
DIVISION BENCH
Customs Appeal No.C/360/2007
Customs Appeal No.C/371/2007
Customs Appeal No.C/372/2007
(Arising out of Order-in-Appeal No.146-147/CUS/APPL/KNP/07 dt. 23.3.07 and No.145/CUS/APPL/KNP/07 dated 29.3.07 and No.121-122/CUS/APPL/KNP/07 dt. 23.3.07 passed by the CCE(A), Kanpur)
For approval and signature:
Honble Mr.M.V.Ravindran, Member (Judicial)
Honble Mr.M.Veeraiyan Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
CCE, Kanpur Appellant
Vs.
M/s.Pacific Leather (P) Ltd. Respondent
M/s.Sunrise Overseas M/s.Super Tannery Ltd.
Present for the Appellant: Shri Sonal Bajaj, SDR Present for the Respondent: None Coram:Honble Mr.M.V.Ravindran, Member (Judicial) Honble Mr.M.Veeraiyan, Member (Technical) Date of Hearing: 21.06.2011 Date of Decision: 21.06.2011 ORDER NO._______________ PER: M.VEERAIYAN These three Appeals by the department involve common issues and therefore are being dealt with by this common order.
2. Heard learned SDR. None appears for the respondents inspite of notice.
3. The relevant facts in brief are that the respondents imported goods claiming to be Sulphonated Fish Oil seeking classification under chapter sub heading 34029020. The imported products were in fact declared in the bills of entry as follows:
Sulphonated Fish Oil OPTIMALIN UPNC (in the case in appeal No.C/371/07) Sulphonated Fish Oil ADUVAX LB & OPTIMALIN UPNC (in the case in appeal No.C/360/07) Sulphonated Fish Oil SULCODOL CI. (in the case in appeal No.C/372/07)
4. The department allowed provisional clearance of the goods after drawing samples which were sent to Central Revenue Control Laboratory (CRCL) for testing. As per test reports, the sample was a preparation having Sulphonated Fish Oil and additives. On the basis of test reports, the show cause notices were issued proposing classification of the imported products under chapter sub heading 34039100 as preparation of a kind used for oil or grease treatment of textile material, leather for skins or other materials. The respondents contested the show cause notices and produced test reports obtained from Central Leather Research Institute (CLRI), according to which surface active function is subsidiary to the main function of fat- liquoring. The original authority confirmed classification as proposed in the show cause notices and finalized assessment of bills of entry and demanded differential duty. On appeal to the Commissioner (Appeals), the Commissioner (Appeals) has set aside the orders of the original authority. Hence, the department is in appeal before the Tribunal.
5. Learned SDR submits that the test reports of the CLRI clearly mentioned the product as preparation having Sulphonated Fish Oil and additives and therefore they cannot be treated as Sulphonated Fish Oil. Therefore the classification claimed by the respondents is not acceptable. He also relied on technical literature produced by the respondents in respect of ADUVAX LB wherein it is opined that the product is fat liquor agent giving the most softness which was being used specially in leather etc. Drawing our attention to this description which reads as oil based on Sulphonated Fish Oil, he submits that these products should not be treated as Sulphonated Fish Oil and considering the use of these items for the purpose of fat liquoring, they should be treated as falling under chapter sub heading 34039100. In this regards, he relied on the decision of the Tribunal in the case of M/s.Associated Finishing Agency vs. CC, Chennai reported in 2011-TIOL-62-CESTAT-MAD and the decision in the case of Prema Colors & Chemicals vs. CC, Chennai reported in 2008 (231) ELT 96.
6. We have carefully considered the submissions and perused the records. At the outset, we note that the burden to prove classification of the imported products is on the department. We are dealing with classification of items claimed as Sulphonated Fish Oil, a chemical. The chemical examiners report relied upon by the department referred to the imported materials as the sample was a preparation having Sulphonated Fish Oil and additives. The additives have not been identified. Whether the presence of additives will make the product different from Sulphonated Fish Oil depends upon the nature and the quantity of additives. This fact is not available in the chemical examiners report relied upon by the department. The end use of the imported product, whether the same is used for fat liquoring or other purpose, will be relevant only if the said product goes outside the description of Sulphonated Fish Oil. There is no expert opinion relied upon as to the different uses of the Sulphonated Fish Oil. The technical opinion relied upon in respect of ADUVAX LB describe the nature of the product as oil based on Sulphonated Fish Oil. At the same time, there is clear opinion ADUVAX LB is a strong Sulphonated Fish Oil. This in fact supports the view of the respondents rather than the claim of the Revenue. Therefore, in our considered opinion the imported products deserved to be considered as Sulphonated Fish Oil and the term Sulphonated Fish Oil being specifically mentioned under chapter sub heading 34029020, the same deserve to be given preference over the other tariff item 34039100 as rightly concluded by the Commissioner (Appeals) relying on Rule 3(a) of Rules of Interpretation of Customs Tariff, 1975 which envisage giving preference to most specific description.
7. The decision of the Tribunal in the case of M/s.Associated Finishing Agency is on a clear finding that the goods imported by the appellants in that case was found on test by the Customs Lab to be fat liquor and not Sulphonated Fish Oil. Similarly, the decision of the Tribunal in the case of Prema Colors & Chemicals is on the appreciation of fact that the sample of the product in the said case did not shown the presence of Sulphonated Fish Oil. These two cases therefore, are clearly distinguishable from the facts of the present case.
8. In view of the above, we do not find any reason to interfere with the decision of the Commissioner (Appeals) which are based on appreciation of test reports of CRCL and application of Rule 3(a) of Rules of Interpretation of Customs Tariff, 1975.
9. The appeals are therefore rejected.
(pronounced in the open court) (M.V.RAVINDRAN) MEMBER (JUDICIAL) (M.VEERAIYAN) MEMBER (TECHNICAL) mk 5