2002 (2) TMI 140 - AT - Central Excise

Summary

Issues:
Eligibility of products for exemption under Notification No. 120/84 of the Central Excise Rules.

Analysis:
The issue in this appeal revolves around the eligibility of certain products, namely, "cabols", "Univols", "Ecols", and "Osmex - 140", for exemption under Notification No. 120/84 of the Central Excise Rules. The Division Bench referred the matter to a Larger Bench to determine the exact scope of coverage of the notification due to the absence of a clear definition of 'lubricating oil' in the Central Excise Tariff. The appellant Oil Company contended that the products in question, being "obtained by straight blending of mineral oils", fall within the scope of the exemption as per the notification's definition of "blended or compounded lubricating oils and greases". The appellant argued that the controversy in a previous case regarding flash point below 94^0C does not apply here as the flash point of the products in question is above 94^0C. The appellant emphasized that 85% of the goods were sold and used directly as lubricants, indicating their classification as finished goods rather than raw materials. The appellant stressed the importance of interpreting matters according to ordinary commercial understanding and referred to legal interpretations of the phrase "ordinarily used" to support their argument.

The Tribunal found that the controversy decided in a previous case was not relevant to the current appeal. The key consideration for determining the eligibility of the goods for exemption under Notification 120/84 was whether they satisfied the definition contained in the notification and whether they were ordinarily used as lubricants. The Tribunal highlighted the need to reach a finding on these issues based on the evidence presented by both sides. Consequently, the Tribunal concluded that it was unnecessary to consider the reference made to the Larger Bench and returned the appeal to the Division Bench for further proceedings and the recording of findings on the disputed facts. The judgment underscores the importance of interpreting the notification's language and determining the ordinary usage of the goods in question to ascertain their eligibility for exemption under the Central Excise Rules.