12th April, 2001.
F. No. 104/1/2001-CX.3
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
A doubt has been raised as to whether mixture of hydrocarbons-Fluoro-11 & Fluoron-12 are classifiable under chapter heading 3823.00 or under chapter heading 2903.10 as halogenated derivatives of hydrocarbons.
2. A Divisional Assistant Commissioner had passed an order in original dated 16.2.1993 classifying the product in question under sub heading No.3823.00 on the grounds that mixtures of Fluron-11 and Fluron-12 are not separate chemically defined organic compounds. The Audit objected the classification on the grounds that the product are classified under sub-heading No.2903.10 as on mixing of these two compounds, no chemical change occurs and therefore, the mixtures of these two compounds also needed to be classified under sub-heading No.2903.10.
3. The matter has been examined. The product in question is a mixture of halogenated derivatives of acyclic hydrocarbons. Fluoron 11 is trichloro-monofluro methane & Fluoron 12 is di-chloro-di-fluoro methane. These gases are ordinarily used as refrigerants and can also separately be used as blowing agents or propellants. Heading 29.03 of CET covers halogenated derivatives of hydrocarbons. Sub-heading 2903.10 covers chloro-fluoro hydrocarbons of methane or ethane. General note 1 (a) to chapter 29 reads as under :-
“Except where the context otherwise requires, the headings of this chapter apply only to :-
1. Separate chemically defined organic compounds, whether or not containing impurities.”
4. General note 1(a) to Chapter 29 of HSN indicates that “separate chemically defined compounds” does not necessarily exclude mixtures of “separate chemically defined compounds”. For instance, the note specifically includes “separate chemically defined compounds” dissolved in water, non-aqueous solutions and also compounds (or their solutions) with added stabilizers, anti-dusting agents or colouring substances.
5. Rule 3 (b) of the interpretative rules specifically provides that mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets, shall be classified as if they consisted of the material or components which gives them their essential character. The subject product consists of a mixture of two halogenated hydrocarbons. Both the hydrocarbons are in themselves “separate chemically defined hydrocarbons”. Also there appears to be no material difference in the chemical properties of Fluoron 11 and Fluoron 12 when kept separately and mixed together, although some physical properties might change by mixing two gases.
6. Rule 3 (a) of the interpretative rules encourages classification under more specific description rather than a general description. From this angle also, the subject mixture appears more appropriately classifiable under heading 2903.10. Accordingly, it is felt that the goods are classifiable under heading 2903.10 and not under sub-heading 3823.00. Audit objection has also been admitted by the department that the subject goods are classifiable under sub-heading 2903.10.
7. The above clarification may be brought to the notice of the lower field formations and the trade interests may also be suitably advised.
8. All pending disputes/assessments on the issue may be settled in the light of these guidelines.
9. Receipt of this circular may please be acknowledged.
10. Hindi version will follow.