2004(11)LCX0052
IN THE CESTAT, WEST ZONAL BENCH, MUMBAI
Smt. Archana Wadhwa, Member (J) and Shri V.K. Agrawal, Member (T)
IFTEX OIL & CHEMICALS PVT. LTD.
Versus
COMMISSIONER OF CUSTOMS, NHAVA SHEVA
Order No. A/8/2005-WZB/C-II, dated 2-11-2004 in Appeal No. C/1184-R/99
REPRESENTED BY : Shri Ravindra Jain, Consultant, for the Appellant.
Shri Vimlesh Kumar, SDR, for the Respondent.
[Order per : V.K. Agrawal, Member (T)]. - The issue involved in this appeal filed by M/s. Iftex Oil & Chemicals Pvt. Ltd is whether Pennzadd 3114 imported by them is classifiable under heading 3811.19 of the first schedule of Customs Tariff Act as claimed by them or under sub-heading 3403. 99 of the Tariff has been confirmed by the Commissioner (Appeals) in the impugned order.
2. Shri Ravindra Jain, learned Consultant, submitted that the impugned goods is an additive and not the lubricant oil; that in fact the impugned item is used to formulate the lubricant oil; that the heading 34.03 covers lubricating preparations, that Heading 3811.19 covers additives for manufacturing lubricating oils/preparations, that the Department has classified the impugned product under sub-heading 3403.99 on the ground that the recommended dosage level is 0.69% by weight (0.55% volume) to meet the performance requirements and as per the Explanatory Notes of HSN, below heading 38.11, lubricating preparations intended to be added in small quantities are excluded and covered under heading 27.10 or 34.03; that the Commissioner (Appeals) has wrongly relied upon the said exclusion clause in HSN; that the HSN is referring to lubricating preparations whereas the impugned product is additives which is mixed in base oil to make lubricating preparations. He, further submitted that the subsequent imports of the impugned product made by them has been assessed under sub-heading 3811.19 of the Tariff only; that further the similar product manufactured by M/s. Pennzoil India Ltd. in India is classified under heading 38.11 of the Schedule to the Central Excise Tariff Act.
3. Countering the argument Shri Vimlesh Kumar, learned SDR, reiterated the findings as contended in the impugned order.
4. We have considered the submissions of both the sides. As per the technical iterature, Pennzadd 3114 universal low-zink antiwear package is designed for use in low-sulfer base oils. This additive is designed to meet or exceed the demanding performance requirements of Cincinnati Milacron, Hagglunds-Demson and Vickers. It is thus apparent that the impugned product is an additive which is mixed with base oil. The entire case of the Department for classifying the impugned product under heading 34.03 is on the basis of exclusion clause in Explanatory Notes of HSN, which reads as follows: “Those lubricating preparations intended to be added in small quantities to motor fuels or lubricants, for example, for reducing wear on engine cylinders, are excluded (heading 27.10 or 34.03)”.
5. We agree with the submissions made by the learned advocate that the said exclusion clause refers to lubricating preparations and not to additives and, therefore, the said exclusion clause is not applicable to the impugned goods. Heading 38.11 covers additives specificated within its ambit and as such the impugned goods, which is an additive is appropriately classifiable under sub-heading 3811.19 of the Customs Tariff. We, therefore, set aside the impugned order and allow the appeal.
Equivalent 2005 (181) ELT 0124 (Tri. - Mumbai)