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TMI Blog1988 (4) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... thout accounting for the same in RG1 register, without completing other Central Excise formalities and without payment of duty and contravened the provisions of Rules 9(1), 52A, 53, 173B, 173C, 173G, 173F and 174 read with Rule 226 ibid. The appellants were asked to explain why the aforesaid Central Excise duty should not be recovered from them under Rule 9(2) ibid and why penalty should not be imposed on them under Rules 9(2), 226 and 173Q of the Central Excise Rules. After considering the replies to the show cause notices and granting personal hearing to the appellants, the Collector of Central Excise held that the contravention s indicated in the show cause notices were established and he confirmed the demands for duty under Rule 9(2) of the Central Excise Rules, 1944. He also imposed penalty of Rs. 1,000/- only on the appellants under Rules 9(2), 173Q and 226 ibid. 2. Collector of Central Excise held that Central Excise Tariff Item 14AA did not lay down the minimum purity to identify goods for the purpose of classification under that Tariff Item. The standard laid down by ISI would not be relevant for classification of Bicarbonate of Soda under the said Tariff Item. He held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) ELT 169 (S. C.) - Union Carbide India Ltd. v. Union of India and Others. (iii) 1987 (31) ELT 623 - Shakti Insulated Wires Pvt. Ltd. and Another v. Union of India and Others. (iv) 1987 (31) ELT 671 - Brammer V. Link Belting India Ltd. and Another v. C.L Nangia, Appellate Collector of Central Excise, Bombay and Others. 4. Arguing for the respondent, Smt. Chander has stated that Sodium Bicarbonate consumed during the period 1-12-1985 to 28-2-1986 was covered by Item 14AA of the First Schedule to the Central Excises and Salt Act, 1944 and the same product consumed during the period from 1-3-1986 to 1-4-1986 was covered by Heading 2805.30 of the Schedule to the Central Excise Tariff Act, 1985. Tariff Item 14AA covers chemicals. It is, therefore, to be seen whether Sodium Bicarbonate produced by the appellants is chemical. Heading 2805.30 of the Schedule to Central Excise Tariff Act, 1985 read with Note 2(a) of Chapter 28 of the Schedule clearly covers Sodium Bicarbonate in impure form. For the purpose of classification under Tariff Item 14AA and Heading 2805.30 purity is immaterial. It is to be seen whether Sodium Bicarbonate is produced. If the product is Sodium Bicarbonate, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgued that classification of a product under Central Excise Tariff Item 14AA is not dependent on the purity of the goods. So long as the product falls within the Tariff description, it is classifiable under that Tariff Entry irrespective of the purity of the goods. So far as the classification under New Central Excise Tariff Act, 1985 is concerned, she has drawn our attention to Chapter Note 2(a) in Chapter 28 of the Central Excise Tariff Act, 1985 and the Tariff Heading 2805.30 and has argued that this Tariff Heading is specific for Sodium Bicarbonate and according to Chapter Note 2(a) Sodium Bicarbonate in impure form will also fall under this Heading. She has relied upon a number of judgments in support of her arguments. One of the judgments relied upon by her is the Supreme Court decision in the case of Indian Aluminium Cable Limited v. Union of India and Others, reported in 1985 (21) ELT 3 (S.C.), in which it was held by the Hon ble Supreme Court that Specifications issued by the Indian Standard Institution are for ensuring quality control and have nothing to do with the class to which the goods belong in a Tariff Schedule . In the case of South Bihar Sugar Mills Ltd. and Ano ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Collector of Central Excise, Pune and in the decision reported in 1987 (27) E.L.T. 292 (Tribunal) in the case of Kores India Limited v. Collector of Central Excise, Bombay. In the-case of M/s. Dai-ichi Karkaria Private Limited, the facts were that the appellants - M/s. Dai-ichi Karkaria Private Limited manufactured detergent products falling under Tariff Item 15AA of the Central Excise Tariff. Sulphonation was a part of the process to make detergent products. The process involved in the manufacture of detergent products was burning of sulphur with air which brought into existence, at an intermediate stage, Sulphur Dioxide (SO2). That gas passed over some catalysts in the continuous and uninterrupted process and the said gas contained Sulphur Trioxide (SO3). The appellants removed SO3 without payment of duty. A show cause notice was, therefore, issued demanding duty over a period of time. The Additional Collector, who adjudicated the case, imposed a penalty of Rs. 1,000/- on the said appellants and demanded duty on sulphur trioxide. The matter came up in appeal before this Tribunal. The appellants submitted that Sulphur Trioxide (SO3) was only an intermediate product in continuous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule to Central Excise Tariff Act, 1985 provides that except where the context otherwise requires, the Headings of this chapter apply to separate chemical elements and separate chemically defined compounds whether or not containing impurities. Therefore, Bicarbonate of Soda containing impurities is fully covered by Heading No. 2805.30. Although there is no such Note in respect of Central Excise Tariff Item 14AA, this Tariff Item specifically covers Bicarbonate of Soda. Therefore, once Bicarbonate of Soda is manufactured, it clearly falls within the description of these two Tariff Item and Heading, one relating to the period prior to 1 -3-1986 and the other for the period from 1-3-1986. In the present case, Bicarbonate of Soda is produced by the appellants in the course of manufacturing Soda Ash and Ammonium Chloride. Therefore, irrespective of purity of Sodium Bicarbonate manufactured by them, it is clearly covered by these Tariff Item and Heading for the purpose of Central Excise classification. Although the Indian Standard Institution Specification lays down the minimum purity of 99% for Bicarbonate of Soda, as held by the Hon ble Supreme Court, the I.S.I. specification is not rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming, threading and redrawing. After the cans were trimmed, threaded and redrawn, they were reeded, beaded and anodized or painted. It was at that point only that cans became a distinct and complete component capable of being used as flashlight case for housing battery cells and having a bulb fitted to the case. It was in those facts of the case that the Supreme Court held that cans on which duty was demanded were not goods to be liable to Central Excise duty under Tariff Item 27. In the present case before us, Bicarbonate of Soda came into existence within the Tariff description. It is a different matter that the entire quantity of Bicarbonate of Soda was consumed by them captively and the same was not sold in the market. That does not take away the product from the preview of Central Excise duty after the amendment of Rules 9 and 49 of the Central Excise Rules retrospectively by the Finance Act, 1982. 8. The decision of Delhi High Court reported in 1978 ELT (J 121) in the case of Delhi Cloth and General Mills Company Limited and Another v. Joint Secretary, Government of India and Another also does not help the case of the appellants. In the said case, Calcium carbide in naked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bberised . In the course of manufacture of V. Link Belting, the petitioners utilised cotton fabrics, rubber compounds and volatile solvents as raw materials. This process of manufacture was an uninterrupted process which went through various stages of production. After application of the rubber compound the cotton fabric was cut into pieces and those pieces were placed one over the other as per requirement and thereafter they were vulcanised to form sheetings of maximum size of 18"/24". The said sheeting was not a commodity or article for use or consumption save and except as an article in the process of manufacture of V. Link Beltings and the same was distinct from cotton fabrics rubberised . It was observed that the distinction was not only in the process of manufacture but also in the character, marketability and use. On the basis of those facts it was held by the Hon ble High Court that no Central Excise duty under Item 19 of the Central Excise Tariff was leviable on those cotton fabric sheets. 9. In view of the above discussions, the judgments relied upon by the learned Advocate are not applicable to the facts of the present case. In the case before us, Bicarbonate of Soda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 29-11-1984 from the Inspector, Central Excise vide copy at page 40 of the paper book, letters dated 29-3-1985 and 17-4-1985 of the Superintendent of Central Excise vide copies at pages 43 and 48 of the paper book respectively, all addressed to the appellants, copies marked as Annexure-C to the appeal Memorandum, that the appellants were informed that Sodium Bicarbonate manufactured by them was liable to Central Excise duty under Tariff Item 14AA(1) of the Central Excise Tariff and they were asked to obtain Central Excise licence, file classification list and observe other Central Excise requirements. The appellants neither took Central Excise licence nor observed other Central Excise requirements including payment of duty. They have, therefore, deliberately contravened the provisions of law to evade payment of duty as indicated in the show cause notices and the impugned order. Demanding duty under Rule 9(2) of the Central Excise Rules and imposition of penalty under Rules 9(2), 173Q and 226 of the Central Excise Rules, are, therefore, according to the provisions of law and are justified in the facts and circumstances of the case. 10. In the light of the aforesaid discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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