1987 (7) TMI 321 - AT - Central Excise

Summary

Issues Involved:

1. Classification of the product as Maleic Resin or Polyester Resin.
2. Eligibility for exemption under Notification No. 157/81.
3. Validity and relevance of test reports from different laboratories.
4. Admissibility and weight of expert opinions.
5. Impact of subsequent events and seizures on the appeal.

Issue-wise Detailed Analysis:

1. Classification of the Product as Maleic Resin or Polyester Resin:

The primary issue was whether the respondents' product marketed under various brand names (CALPOL 40-00, CALPOL 72-23, etc.) qualifies as Maleic Resin, which would make it eligible for exemption under Notification No. 157/81, dated 29-8-1981. Initially, the respondents classified their product as Polyester resin and paid duty accordingly. However, they later filed a classification list claiming their product as Maleic resin, fully exempt from duty under the said notification. The Assistant Collector of Central Excise rejected this claim based on a report from the Customs House Laboratory, Calcutta, which identified the product as Polyester resin. The respondents disputed this and requested a retest, which was not acted upon. The Collector (Appeals) later ordered a retest and fresh classification, which led to conflicting test reports from different laboratories.

2. Eligibility for Exemption under Notification No. 157/81:

The eligibility for exemption hinged on whether the product met the definition of Maleic resin as per the notification. The definition included synthetic resins manufactured by reacting maleic acid/anhydride and/or fumeric acid with components like polyhydric alcohols, resins, drying oils, terpenes, and unsaturated hydrocarbons. The Assistant Collector, relying on the Chief Chemist's report, concluded that the product was an unsaturated polyester resin and not a Maleic resin, thus rejecting the exemption claim. The Collector (Appeals), however, found the respondents' product to be Maleic resin based on the test report from the Head of the Department of Chemical Engineering, Jadavpur University.

3. Validity and Relevance of Test Reports from Different Laboratories:

The case involved conflicting test reports from the Chief Chemist, Central Revenues Control Laboratory, and the Head of the Department of Chemical Engineering, Jadavpur University. The Chief Chemist's report identified the product as unsaturated polyester resin, while the report from Jadavpur University identified it as Maleic resin. The Assistant Collector dismissed the latter report, arguing it exceeded the scope of the tests ordered by the Collector (Appeals). However, the Tribunal noted that the tests conducted by Jadavpur University were done with the knowledge and acquiescence of the Revenue, and thus could not be excluded from consideration.

4. Admissibility and Weight of Expert Opinions:

The Tribunal examined the relevancy and weight of expert opinions under the Indian Evidence Act, 1872, noting that the real function of an expert is to provide material and reasons for the court to form its own judgment. The Tribunal found that neither the Chief Chemist nor the Head of the Department of Chemical Engineering should have expressed opinions on whether the product met the definition in the notification, as this was a legal interpretation. However, the factual parts of their reports were considered relevant.

5. Impact of Subsequent Events and Seizures on the Appeal:

During the appeal, the Directorate of Anti Evasion seized documents indicating that the CALPOL products were marketed as Polyester resin. The appellant requested a remand to consider these documents along with the current proceedings. The Tribunal rejected this request, stating that the appeal could be disposed of based on the available material without considering the subsequent seizures.

Conclusion:

The Tribunal dismissed the appeal, agreeing with the Collector (Appeals) that the respondents' product met the definition of Maleic resin under Notification No. 157/81, thus qualifying for exemption. The Tribunal emphasized that the definition in the notification should guide the classification, not scientific or technical understandings. The decision did not preclude the Revenue from proceeding against the respondents based on the recent seizures if they could make a case in accordance with the law.