Low Aromatic White Spirit not Classifiable under Light Oils and Preparations under Customs Tariff Act: CESTAT Sets Aside Confiscation [Read Order]

Setting aside the order of confiscation, the Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that Low Aromatic White Spirit is not classifiable under Light Oils and Preparations under Customs Tariff Act, 1944.

The appellant, M/s Kunjal Synergies Private Limited, imported the goods with the description “Low Aromatic White Spirit” and filed two Bills of Entry for warehousing, classifying the goods under the Customs Tariff Head (CTH 2710 1990).

An Alert Circular 02/2020 dated 23/03/2020 issued by The Directorate of Revenue Intelligence (DRI), New Delhi indicated that some importers are importing Low Aromatic White Spirit classifiable under CTH 271012, as per Chapter Note 4 of Chapter 27 and misclassifying the same.

The Joint Commissioner of Customs (Port) issued a show cause notice proposing to reclassify the goods under 27101239. The Notice was adjudicated and the adjudicating authority vide his order dated 24/02/2022 rejected the declared description of the goods “White Spirit in bulk” and redetermined the same as “Solvent 145/205 as per IS 1745:2018”.

The Chemical Examiner reported that each of the samples under reference meets the criteria of „Low Aromatic Solvent‟ as per IS 1745- 2018 for petroleum hydrocarbon solvent. He also stated that each of the two samples under reference belonged to petroleum class B.

The appellant stated that when the Test Reports differs from the standards prescribed, the goods cannot be held to satisfy the requirements under IS 1745 standards meant for CTH 2710. Hence the impugned goods cannot be categorized as Light Oils and Preparations as per the CRCL Test report.

A Two-Member Bench of the Tribunal comprising P. K. Choudhary, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “We find merit in the arguments of the Appellant. In the impugned order, the Commissioner (Appeals) has rejected the Classification of the goods under CTH 27101239. When the goods do not satisfy the criteria fixed under Note 4 of Chapter 27, the goods cannot be classified under CTH 27101239. The remaining option available in the Tariff is to classify the same under CTH 27101990 which is the only residuary entry available for classification.”

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