1981 (8) TMI 226 - Board - Central Excise

Summary

Issues: Interpretation of Notification No. 34/73-C.E. regarding the use of motor spirit for concessional rate of duty.

Analysis:
The case involved an appeal by Punjab United Pesticides & Chemicals Limited against an Order-in-Original passed by the Collector of Customs & Central Excise, Chandigarh. The appellants had obtained an L-6 license for receiving motor spirit (M.S.) at a concessional rate of duty under Notification No. 34/73-C.E. The Collector alleged that the M.S. was not used for the prescribed purpose, leading to a demand for differential duty. The appellants contended that their use of Benzene and Toluene in the manufacture of Malathion (Technical) fell within the scope of the notification. The Chemical Examiner's interpretation of "formulation" was a crucial point of contention. The Board examined whether the process undertaken by the appellants constituted "formulation," whether the solvents were used as intended, and whether the M.S. was meant for use as solvents.

The Board considered the technical definition of "formulation" and concluded that the process of manufacture of the appellants, involving Benzene and Toluene, fell within the scope of the term. The Board rejected the Collector's view that the solvents were not used in the formulation of pesticides, emphasizing that the distinction between "formulation" and "manufacture" was insignificant. The Chemical Examiner's report confirmed the use of Benzene and Toluene as a solvent medium in the formulation of Malathion (Technical). The Board noted that the appellants' application outlined the intended use of the solvents, which was accepted by the Department. Consequently, the Board held that the appellants were entitled to the concessional rate of duty under Notification No. 34/73-C.E.

In conclusion, the Board allowed the appeal, determining that the appellants were eligible for the concession under the notification. The decision was based on the technical interpretation of "formulation" and the acceptance of the intended use of solvents in the manufacturing process. The case highlights the importance of accurately interpreting legal provisions and technical terms in customs and excise matters to determine eligibility for duty concessions.