Page 191 - ELT_1st July 2020_Vol 373_Part 1

2020 ] VENKATESWARA INDUSTRIAL PRODUCTS P. LTD. v. C.C.E.,C.&S.T.,HYDERABAD-III 101

“15. I will now take up the issue of classification of CFC : whether CFC
falls under Chapter Heading 34.03 or not. For ease of reference 34.03 is re-
produced below :
34.03 LUBRICATING PREPARATIONS (INCLUDING
CUTTING OILS PREPARATIONS BOLT OR NUT
RELEASE PREPARATIONS, ANTI-RUST OR ANTI-
CORROSION PREPARATIONS AND MOULD
RELEASE PREPARATIONS, BASED ON
LUBRICANTS) AND PREPARATIONS OF KIND
USED FOR THE OIL OR GREASE TREATMENT OF
TEXTILE MATERIALS, LEATHER, FURSKINS OR
OTHER MATERIALS, BUT EXCLUDING
PREPARATIONS CONTAINING, AS BASIC
CONSTITUENTS, 70% OR MORE BY WEIGHT OF
PETROLEUM OILS OR OF OILS OBTAINED FROM
BITUMINOUS MINERALS.
- Containing petroleum oils or oils obtained from bitumi-
nous minerals;
3403.11 -- Preparations for the treatment of textile materials, leather,
furskins or other materials
3403.19 - Other
3403.91 -- Preparations for the treatment of textile materials, leather,
furskins or other materials
3403.99 -- Other
16. The classification sought by the noticee is 3403.99 i.e. as “other”. Ac-
cording to the noticee, the CFC is akin to lubricating preparations and
therefore, attracts classification under 34.03 in terms of the explanatory
notes to the Heading 34.03. Lubricating preparations are designed to reduce
friction between the moving parts of machinery, vehicles, etc. and that such
lubricants usually consist of or are based on, mixtures of enamel, vegetables
or mining oils, facts or greases. I find from the Chartered Engineer’s Certifi-
cate dated 21-7-2010 submitted by the notice that the essential property of
CFC is sealant property required for prevention for water seepage. The cer-
tificate further adds that it has additional qualities of lubricating prepara-
tion/anti-rust/anti-frozen preparation. The certificate concludes that CFC
is of a consistency like a semi-viscous mix or blend product and its use is of
a speciality oil for filling in enclosures as a sealant protecting the telephone
underground cable joint. It contains basically oils to the extent of 50%. The
product may also find application in such uses as anti-rust and anti-
corrosive preparations.
17. Thus, I find the essential characteristics of cable filling compound is of
sealant or insulation and lubrication is not the essential character. It is an
established principle that classification is to be done on the basis of the es-
sential character and not on residual or auxiliary character. 34.03 applies to
lubricating materials. Therefore, I hold that CFC does not fall under 34.03.
Next question is of appropriate classification? Department’s view is that it
is classifiable under 38.03 as a residuary product of chemical or allied in-
dustries, not elsewhere specified or included. The main contention of the
notice against classification under 38.03 is that CFC is not a product of
chemical or allied industry. The Chartered Engineer has opined that the

EXCISE LAW TIMES  1st July 2020  191