1989 (5) TMI 181 - AT - Central Excise

Summary

Issues Involved:
1. Whether the impure SO3 contained in the gas mixture obtained during the manufacture of organic surface active agents is technically SO3.
2. Whether the impure SO3 in the gas mixture is commercially known as Sulphur Trioxide.
3. Whether the extended period of limitation under Section 11A of the Central Excises and Salt Act, 1944 is applicable.

Detailed Analysis:

1. Technical Classification of Impure SO3:
The appellants did not pursue the issue of whether the impure SO3 in the gas mixture is technically SO3 due to the lack of specific technical literature on the matter.

2. Commercial Recognition of Impure SO3:
The primary contention was whether the impure SO3 in the gas mixture is commercially known as Sulphur Trioxide. The appellants argued that the air-SO3 mixture, containing only 5-7.5% SO3, was not marketable as SO3. They supported their claim with affidavits and technical authorities stating that SO3 must have a concentration of over 99% to be known in commerce.

The Tribunal reviewed the process of manufacture, which involves converting sulphur into sulphur dioxide, then into sulphur trioxide, which is then used in the manufacture of organic surface active agents. The Tribunal noted that the air-SO3 gas mixture produced in this process was not known in commerce or technology as sulphuric anhydride, which is required to fall under Item No. 14G of the Central Excise Tariff (CET).

The Tribunal referenced the Supreme Court's judgment in South Bihar Sugar Mills, which held that a gas mixture not known in the market as CO2 and not marketable as such could not be classified as CO2. Similarly, the Tribunal found that the air-SO3 mixture in this case was not known or marketable as sulphuric anhydride.

The Tribunal also considered the Department's reliance on previous decisions and technical literature but found that these did not support the claim that the air-SO3 mixture was marketable as sulphuric anhydride. The Tribunal concluded that the air-SO3 gas mixture did not fall under Item No. 14G CET.

3. Extended Period of Limitation:
Given the conclusion on the commercial recognition of impure SO3, the Tribunal did not find it necessary to address the issue of the extended period of limitation under Section 11A of the Central Excises and Salt Act, 1944.

Conclusion:
The Tribunal set aside the impugned order, concluding that the air-SO3 gas mixture was not anhydride of fuming sulphuric acid and thus not classifiable under Item No. 14G CET. Consequently, the appeal was allowed with consequential relief to the appellants. The issue of the extended period of limitation was not addressed due to the resolution of the primary issue.