TMI Blog1990 (9) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... r referred to as the Rules) was confirmed for six months and were directed to pay duty at the appropriate rate under Chapter 32.14 from 23-2-1986 to 1-4-1986 (inclusive) of the new Central Excise Tariff and penalty of Rs. 40,000/- was imposed under Rule 173Q of the Rules. 3. The appellants in Appeal No. E/3490/89-C have sought for setting aside the order-in-appeal No. 183/Cal.I/89 dated 31-7-1989 passed by the Collector of Central Excise, Calcutta-I who has confirmed the order-in-original No. 85(21)AC/Cal.E/88 dated 16-6-1988 passed by the Assistant Collector of Central Excise, Calcutta E Division classifying Resin Cement (Capping cement) under Heading No. 32.14 of Central Excise Tariff Act, 1985 and duty demand of Rs. 1,57,918.20 for the period March, 1987 to March, 1988 was confirmed. 4. The Revenue in Appeal No. E/1273/89-C, Appeal No. E/1274/89-C and E/1275/89-C have sought for setting aside the order-in-appeal No. 65-67/Cal.I/88 dated 25-2-1988 passed by the Collector of Central Excise (Appeals) Calcutta by which he allowed three appeals of assessee by setting aside the order-in-original No. 85(28)AC/Cal.E/87 dated 6-11-1987 passed by the Assistant Collector of Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the meaning of Central Excises and Salt Act and Rules framed thereunder. 5. The Inspector of Central Excise by his letter dated 11-1-1983 alleged that the assessees were manufacturing capping cement in their factory and called upon them to state as to whether the said mixture was declared to the Central Excise authorities. The assessee by their reply dated 10-2-1983 took the stand that the said mixture was not an excisable commodity and hence the filing of classification list did not arise. The Inspector by his letter dated 17-2-1983 sought from the assessee the manufacturing process of capping cement with its principal raw materials, which the assessee furnished it by their letter dated 29-3-1983. The assessee have contended that the department had dropped the issue and did not raise about the excisability of the said capping cement till the issue was raised again by the department by their letter dated 27-3-1986 by calling particulars from them, which they say, they furnished it by their letter dated 27-3-1986. However, the department was not satisfied witih the contentions of non-excisability of the impugned product. The department drew samples and after the receipt of Test ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant Collector of Central Excise, Calcutta E Division who had confirmed the demand in three show cause notices for the period June, 1986 July to November, 1986 and December, 1986 to February, 1987 for duty sum of Rs. 22,913.06, Rs. 1,29,392.30 and Rs. 82,511.22 respectively. The learned Collector accepted the contentions of the assessee and held that the impugned product does not have any resinous or plastic properties and hence it could not be taken as resin cement and, therefore, not classifiable under Chapter 32. He also held that the product is not marketable and excisable relying upon the ruling of the Supreme Court s decision in Union Carbide case as reported in AIR 1986 S.C. 1097 = 1986 (24) E.L.T. 109 (S.C.). 8. Appearing for M/s. Electric Lamp Manufacturers (India) Ltd., the learned counsel Shri B. Gupta with S/Shri D. Mandal and I. Ghosh stated that capping cement, which is produced by a physical process of mixing ingredients cannot be said to have been manufactured to attract the terms of definition under Section 2(f) of the Central Excises and Salt Act. The material is not goods because it is having a very short shelf life and is also not marketed. In this context, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e material also has a distinct use to which it is put, namely, to bind together the glass tubes and the metal lamp caps. The process involved, according to the learned DR, is not a simple physical mixture of raw material which is evident from the list of contents given in the Test Report of the National Test House. He further pointed out that the Heading 32.14 of the Central Excise Tariff Act, 1985 is specific and the Collector (Appeals) in his order dated 31-7-1989 which is against the assessee had held that the product is different from the ingredients used and has a distinct name, character and use and he has also held that merely because it has a short shelf life, that cannot by itself be a reason for not considering the material as excisable goods. He has also considered the matter in the light of Explanatory Note to Heading 32.14 to the Harmonised Commodity Des.c.ription and Coding System and had found that the impugned product admittedly is composed of resinous metal mixed with other materials and is used for sealing of glass on heating and that it is, accordingly, covered under Heading 32.14 of Central Excise Tariff Act, 1985. 10. We have carefully considered the submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from glues and other adhesives by which they are applied in thick coating or layers. In respect of resin cement, the Explanatory Note 32.14(1)(3) says that these consist of natural resins (shellac, damar, rosin) or plastics (alkyd resins, polyesters) intermixed and usually with the addition of other materials e.g. waxes, oils, bitumens, rubber, brick powder, lime, cements or any other mineral fillers. Therefore, the present material in question also is a pasty material which is applied to the metal cap and which binds the metal cap and the glass shell of the tube light firmly on heating. It is composed of several materials including resin and filler. Therefore, in the light of the Explanatory Note to the HSN as above, its classification under Heading 32.14-CETA, 1985 would appear to be maintainable. It has been contended that the Chemical Examiner s report should not have been relied upon and that the report of the National Test House should have been accepted. However, the Collector in the impugned order dated 22-5-1987 has given his reasons for not accepting this contention by saying that the National Test House report submitted by the Company does not indicate the type and com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has merely been observed, It is also agreed that the product has no marketability . No details of the basis of this agreement are available on record, whereas the Collector (Appeals) in his order dated 31-7-1989 upholding the order of the Assistant Collector (by which M/s. Electric Lamp Manufacturers are aggrieved) states, I also agree with the Asstt. Collector s views that mere non-marketability of the goods cannot make them non-excisable . We also hold that there is no justification for imposing personal penalty on M/s. ELM in the facts and circumstances of the case especially as the Collector of Central Excise in his adjudication order had found that there was no ground to allege suppression of facts by M/s. ELM, and the personal penalty on them is set aside. Therefore, in order that the department should properly discharge the burden cast on it to support the classification of capping cement with evidence of marketability, the impugned orders in all these appeals passed by the Collector of Central Excise, Calcutta and by the Collector (Appeals) are set aside and case is remanded to the Collector of Central Excise, Calcutta-I (in respect of Show Cause Notice dated 27-8-1986) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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