1998 (11) TMI 195 - AT - Customs

Summary

Issues Involved:
1. Eligibility for exemption under Notification No. 23/55.
2. Classification and distinction between Barytes and Precipitated Barium Sulphate (Blanc Fixe).
3. Justification for confiscation, penalty, and fine.
4. Allegations of suppression or misdeclaration.

Issue-wise Detailed Analysis:

1. Eligibility for Exemption under Notification No. 23/55:
The primary issue was whether Precipitated Barium Sulphate (Blanc Fixe) is eligible for exemption under Notification No. 23/55, which covers Barytes. The appellants argued that Blanc Fixe, being chemically identical to Barytes, should be covered under the same exemption. They cited various judgments and technical literature to support their claim that Blanc Fixe is a form of Barytes and should thus be exempted.

2. Classification and Distinction between Barytes and Precipitated Barium Sulphate (Blanc Fixe):
The appellants contended that Blanc Fixe is essentially Precipitated Barium Sulphate, which is chemically the same as naturally occurring Barytes. They provided ISI specifications and technical literature to demonstrate that both substances have the same chemical formula (BaSO4) and similar uses, particularly as extenders in paints. The Tribunal reviewed technical documents, including the Encyclopedia of Chemical Technology and Hawley's Condensed Chemical Dictionary, which confirmed that Blanc Fixe and Barytes are chemically identical, with the only difference being that one is naturally occurring and the other is precipitated.

3. Justification for Confiscation, Penalty, and Fine:
The Collector had ordered the confiscation of 9,300 kgs of Blanc Fixe and imposed a penalty of Rs. 2,00,000/- under Rule 173Q of the Central Excise Rules, 1944, for contravention of Rules 174 and 173G(4). The Tribunal found that the Collector did not properly consider the technical literature and Board's circulars provided by the appellants, which clarified that Blanc Fixe should be treated as Barytes. The Tribunal concluded that there was no misdeclaration or suppression of facts by the appellants, and thus, the imposition of penalty and fine was unjustified.

4. Allegations of Suppression or Misdeclaration:
The department alleged that the appellants had suppressed the fact that their product was not naturally occurring Barytes but Precipitated Barium Sulphate, thereby wrongly claiming exemption. The Tribunal found that the appellants had accurately described their product in their declaration and had provided sufficient evidence to show that Blanc Fixe is covered under the exemption notification. The Tribunal noted that merely claiming an exemption does not constitute an offense, and there was no evidence of any suppression or misstatement of facts by the appellants.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal. It held that Blanc Fixe is covered under the exemption notification for Barytes, and there was no justification for the confiscation, penalty, or fine imposed by the Collector. The Tribunal emphasized that the department had not substantiated its claim that Blanc Fixe and Barytes are distinct commodities, and thus, the appellants were entitled to the exemption.