1996(03)LCX0051

BEFORE THE COMMISSIONER OF CUSTOMS & CENTRAL EXCISE (APPEALS), MADRAS

Shri A.K. Raha

IN RE : DCW LTD.

Order-in-Appeal No. M. Cus. 489, 490/96, dated 12-3-1996

Advocated By : Shri P.S. Raman, Counsel, for the Appellant.

[Order]. - The preset appeal is filed by M/s. DCW Ltd., against the above mentioned order passed by the Assistant Commissioner of Customs, Group 2, Custom House, Madras 1. Appellant claim that subject goods are classifiable under Chapter Heading 3815.90 read with Notification 32/94. But the Lower Authority cannot be accepted the appellants contentions and passed the following order is as under.

2. The lower authority ordered that the goods viz. Liladox 90 P are an enable under Heading 2909.60 CTA and 2906.00 CET, leviable at the rate of 65%, CVD 20% as against the duty levied under Heading 3815 read with Customs Notification 32/94 at 25% + 20%.

3. Being aggrieved by the above order the appellant has filed this appeal with facts and grounds of the appeal and requested for personal hearing.

4. It is submitted by the learned Counsel that the concept of `well defined organic chemicals is not clear from the point of view of Customs Tariff. He has referred to in this regard to Customs Notification 142/94 which, inter alia, covers several items falling under Heading 38.15 which have been specifically mentioned in the said Notification. It is submitted that some of the items mentioned in the said Notification are falling under Heading 38.15 which can also be called `well defined organic chemicals’. Those items are at Sl. No. IV, V, VI, VII, VIII, XXI, XXII and XXIII in the said Notification. If both the items, particularly, the item appearing at Sl. No. VII in the table annexed to the Notification, viz., Di Lauroyl Peroxide are taken as covered under Heading 38.15 even though they are well defined organic chemical, there is no reason why the impugned goods which are comparable and a substitute for Di Lauroyl Peroxide shall not be covered by Heading 38.15, read with Notification No. 32/94.

5. It is submitted further that, admittedly, the goods in question were Reaction Initiator covered by Heading 38.15. The department’s case is that though they are Reaction Initiators, the impugned goods are specified elsewhere and hence, not covered by Chapter 38. According to the lower authority, the goods are correctly by sub-heading 2909.60, as a peroxide. In this regard, it is contended that a number of peroxides have been specifically covered by Notification No. 142/94 shown as falling under Heading 38.15.

FINDINGS

6. I have carefully considered the written and oral submissions made by the appellant through their Counsel, Shri P.S. Raman.

7. The short question that arises for determination in these two cases is whether Liladox 90 P was classifiable under sub-heading 3815.90, read with Customs Notification 32/94, as claimed by the appellant or under sub-heading 2909.60 CTA and Heading 2909.00 CET, as held by the lower authority in his de novo order.

8. The orders of the lower authority are, primarily based on the opinion of the Deputy Chief Chemist who has confirmed in his report that the impugned goods were well defined organic peroxide chemicals. Since separate chemically defined elements or compounds are excluded from Chapter 38 by virtue of Note 1(a) of the said Chapter, the lower authority held that such well defined chemical elements or compounds well excluded from Chapter 38 and were correctly assessable under sub-heading 2906.90 as peroxide. It is now the case of the appellant that even though these may be well defined organic compound, similar well defined organic compounds were covered by Customs Notification 142/94 and in the said Notification, such well defined organic compound has been shown as falling under Heading 38.15. As a case in point, it is submitted that Di Lauroyl Peroxide appearing at Sl. No. VII in the table annexed to the aforesaid Notification is also a well defined organic compound like the impugned goods. It is also submitted that Di Lauroyl is a substitute for the impugned peroxide and, therefore, no distinction should be made between the two.

9. The above point made by the appellant has substance. however, it is worthy to note that Heading 38.15 covers Reaction Initiator, Reaction Accelerators and Catalytic not elsewhere specified or included. It is also the contention of the appellant that the impugned goods were Reaction Initiators and the above point is not in dispute. The only question that arises for determination is whether the impugned goods were elsewhere specified or included. It is the case of the department, as already mentioned above, that Chapter Note 1(a) of Chapter 38 excludes `separate chemically defined elements or compounds’ with a few exceptions. The impugned goods were not covered by the exceptions and, therefore, the same ought to be treated as excluded from Chapter 38 as a `separate chemically defined compounds’. This finding of the lower authority is entirely based on the opinion of the Deputy Chief Chemist who has given a categorical opinion that the impugned goods were well defined chemical compounds. It would, therefore, be reasonable to hold that as a well defined chemical compound, the impugned goods were excludible from the scope of Chapter 38. As peroxide and as a well defined organic chemical, the impugned goods were thus, correctly classifiable under sub-heading 2909.60. A point was raised by the appellant that comparable substitutes have been shown as being covered under Heading 38.15 in Customs Notification 142/94. In this regard, it will be pertinent to mention that one ought to make distinction between a preparation and `separate chemically defined organic compounds or elements’ which are not a preparation. The impugned goods being a well defined organic compound, can not be taken as a preparation, whereas Heading 38.15, covers only preparations. It is the case of the appellant that Di Lauroyl Peroxide is also a separate chemically defined compound like the impugned goods. If it is so, it was not correct to indicate its classification under Heading 38.15, in Customs Notification 142/94. It is well settled principle of classification that Notification does not settle classification of goods which ought to be determined independent of Notifications. Assuming that there was a mistake in Customs Notification 142/94 in showing Di Lauroyl as falling under Heading 38.15, the appellant shall not be eligible for any concession based on the aforesaid mistake. In any case, the impugned goods are not Di Lauroyl, though they may be comparable substitute. In so far as the impugned goods are concerned, it is not in dispute that it was a separate chemically defined compound and not a preparation and, therefore, the goods are correctly classifiable under sub-heading 2909.60. The order of the lower authority is, therefore, maintainable.

ORDER

For the reasons stated above, the two appeals are rejected.

Equivalent 1997 (91) ELT 221 (Commr. Appl.)