CONTINENTAL PETROLEUM LTD Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) THESE are following three appeals involving common issue whether the waste oil imported by the Importers is classifiable under Heading 38.23 of the First Schedule to the Customs Tariff Act or under Heading 34.03 as Waste Lubricating Oil. C/39 and 42/95 -C filed by M/s. Continental Petroleum Ltd. against the Order -in -Appeal Nos. 486 to 498/94, dated 11 -10 -1994 passed by the Collector (Appeals). C/231/93 -C filed by Collector of Customs (Preventive), Ahmedabad against the Order -in -Original Nos. 3/Addl. Collr./92, dated 20 -1 -1992 passed by the Additional Collector.

(2.) BRIEFLY stated the facts are that M/s. Continental Petroleum Ltd. imported waste oil which was classified by them under Heading 28.23 of C.T.A. The Assistant Collector classified the product under sub -heading 3403.19 of C.T.A. and Confirmed the demand for Customs Duty, holding that the impugned product was primarily a product containing petroleum oil or oils obtained from Bituminous material and their product has the basic characteristics of a lubricating oil; that according to test report, the product was mainly consisting of Hydrocarbon oil and other Carbonaceous matter wherein the Hydrocarbon oil is less than 70% by weight and it had a flash point of above 94C. The Assistant Collector also held that countervailing duty was leviable on the impugned product and he relied on the decision in the case of Collector of Customs v. Indian Metal Industries 1993 (66) E.L.T. 134 (T). On appeal, the Collector (Appeals) upheld the classification under sub -heading 3403.19, holding that the predominant constituent was mineral oil with flash point of 94 C; that after purification by removal of extraneous matters from the "Waste Oil", the product obtained is sold as lube oil or lube stock to established manufacturers of lubricating oils/preparations. He relied upon the decision in the case of Canesh Oil Industries v. C.C.E. 1994 (69) E.L.T. 490 (Tribunal). Hence the Appeal Nos. C/39 and 42/95 -C by M/s. Continental Petroleum Ltd.

(3.) APPEAL No. C/231/93 -C has been filed by Revenue against the order dated 20 -1 -1992 as the Additional Collector classified the waste oil imported by M/s. Gujarat Oil and Industries Ltd. under Heading 38.23 and held waste oil totally valued at Rs. 16,49,249.17 liable to confiscation of Rs. 2,50,000/ -; imposed a penalty of Rs. 25,000/ -; holding that the impugned goods cannot be imported under OGL Appendix 6(1)(iii) of Import Export Policy; that the test report does not say that the sample of waste oil contains petroleum oils or oil obtained from Bitumenous minerals; that impugned product is not a prepared mixture; that on the contrary the product is a waste or residue which remains at the base of machinery/plant which is collected as such and further refined/recycled to get a product which is ultimately used in the manufacture of lubricating oils after adding certain additives; that the product is not suitable to be directly used as lubricating oil as per the Chemical Examiner's report; that the product is not manufactured product or obtained as a residual product from any of the industries in India.