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TMI Blog1990 (12) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... ation list in respect of Soda Ash and Ammonium Chloride Fertilizer and had been clearing the goods after following the proper procedure and payment of applicable duty. His further claim is that he had furnished to the jurisdictional authorities the complete details of the process of manufacture, the reactions that take place in the process and all other details at the time of furnishing the classification list initially. 1.2 On 29th November 1984, the jurisdictional Inspector of Central Excise Customs wrote a letter to the appellants contending that the appellant manufactures Sodium Bicarbonate at the intermediate stage which is liable to Central excise duty under erstwhile Tariff Item No. 14AA(1); it also contended that since there was no exemption notification in respect of its usage in the manufacture of Soda Ash, Sodium Bicarbonate was liable to duty. Accordingly, the Inspector called upon the appellant to file a classification list of the goods at the intermediate stage and the price list in respect of alleged Sodium Bicarbonate. The Inspector also called upon the appellants to furnish information with regard to the quantity of alleged Sodium Bicarbonate manufactured by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndioxide to produce Sodium Bicarbonate which is then used as chemical for domestic and pharmaceutical purposes etc. In the production of Sodium Bicarbonate, it was also stated that one has to control certain serious and dangerous chemicals like arsenic, lead, copper and iron. None of these operations are being performed in the process of manufacture undertaken by the appellant. 1.5 The concerned Superintendent of Central Excise vide his letter dated 29th March, 1985, referring to the letter of the jurisdictional Inspector directed the appellant to commence paying central excise duty at 15% ad valorem from 1-4-1985. The Superintendent of Central Excise also directed the appellant to furnish classification list and price list and also obtain a central excise Licence in addition to maintaining RG-1 Account and observing other Central Excise formalities before using the alleged Sodium Bicarbonate in the manufacture of Soda Ash. Since the Superintendent was insisting with regard to the figures of production of the alleged Sodium Bicarbonate the appellant informed vide its letter dated 29th July 1985 (Annexure K to the appeal) that he had produced 16975.27 tonnes (up to 5 AM of 29-7- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Collector has observed that the department itself had written to the appellant to apply for a Central Excise Licence and commence paying duty. The letters were written on 29-11-1984, 29-3-1985 and 17-4-1985. Despite this, however, the company did not do anything in the matter. It is evident that the Central Excise Officers did not resort to coercive measures like search of factory etc. only due to the consideration that the company is an undertaking of the Punjab Government. In fact, the company has taken the benefit of this indulgence by not furnishing promptly the information and it was only on 29-7-1985 that they furnished the information. One of the circumstances under which provisions of Section 11A can be invoked, is contravention of any provisions of Act or of the Rules made thereunder within an intent to evade payment of duty. In this case it is very clearly established that despite being asked repeatedly to do so the party did not take out a Central Excise Licence or pay duty and removed the goods without payment of duty in contravention of Rule 9(1). Hence, the extended period (of 5 years) has rightly been invoked in this case . 1.10 Having regard to the overall f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be taken on record by the Tribunal under its Misc. Order No. 108/1989-C dated 1-6-1989 by which two affidavits of Experts namely (i) Sarat Kapilram Vakil and (ii) Sukh Chain Lal Jain have been admitted. The department has not furnished any counter affidavits. Apart from the aforesaid two affidavits, the learned advocate has also said that technical literature from various authoritative books have also been brought on record. He also submits that some further judgments of the Supreme Court namely (1) 1989 (40) E.L.T. 280 (S.C.) - Bhore Inds. and (2) 1989 (43) E.L.T. 214 (SC) - Ambalal Sarabhai Enterprises. They have also been pronounced making the law clearer than it had been hitherto. In view of these developments there are cogent reasons and grounds for this Bench not to feel bound by the earlier judgment of the Tribunal in the matter of the appellant himself, mentioned supra. 3.1 Elaborating his preposition on the basis of Brij Lal Lohia s judgment of the Supreme Court, learned advocate has submitted that in that -case following were the facts :- The assessee, a dealer in jute had claimed that he had made a gift of Rs. X to his brother B and another sum of Rs. Y to his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xing statute which is an All India Statute for the sake of uniformity and consistency in the application of taxing statute and for avoiding the challenge of discrimination in application and administration of tax matters.] (2) 1978 (2) E.L.T. J 111 - Bharat Carpets Ltd. v. UOI [Order passed in revision is quasi judicial order and is final and conclusive qua the parties. If department does not respect the said it is illegal on the part of the department]. (3) 1978 (2) E.L.T. J 552 - Mercantile Express Co. Ltd. [The Customs authorities are bound by their own decisions in administering taxing statutes and cannot modify their own decisions at their sweet will. The Customs are bound by their precedents in administering taxing statutes involving the very basis of taxation in respect of a particular article and not leave it to them to modify their own previous decisions but to leave it to them to apply to Courts or Parliament or Legislatures as the case may be to put the law beyond doubt]. (4) 1988 (33) E.L.T. 684 - Para 10 Mahindra Re-Rolls Industries and Another v. UOI Others [A judgment or a verdict given by the competent authority is binding, whether it be wrong, right o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken on record by virtue of the misc. order of the Bench as mentioned above. The other material on record is technical literature from authoritative books bringing out as to how the product under consideration is known in the market. Such technical literature is produced day in and day out by both sides before the Tribunal. There is hardly any scope for any investigation into the statements given in these authoritative texts. Further material by way of judgments of the Supreme Court also do not call for any further investigation. The judgments clarified only the legal position which has hitherto been prevailing. The learned advocate had also urged that there is an inconsistency in the plea of the learned DR on this issue with the plea on the first plea regarding the binding character of the Tribunal s earlier judgment, on the lower authorities. Since the lower authority is bound by the decision of the superior authority, he would hardly be in a position to undertake an enquiry with an open mind against the Tribunal s earlier judgment. The Collector, urges the learned advocate, would find himself in an embarrassing position to go against the earlier judgment of the Tribunal. 4.1 We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e evidence on the point specified by them or not specified by them. and does not say that in all such cases of production of additional evidence the matter must necessarily be remanded to the adjudicating authority. We observe that the department has been given sufficient opportunity to rebut the affidavits evidence by any other counter affidavit but the Revenue has not chosen to do so. In the overall facts and circumstances of the case we do not find any justification to remand the case in view of the additional material brought on record, as urged by the learned DR. 5.0 Issue No. 3 - This is the main issue. Question is whether the impugned product can be treated as Sodium Bicarbonate liable to duty under erstwhile T.I. 14AA(1). Learned advocate has urged that it is a well settled proposition of law that before any goods could be levied to excise duty they should be marketable. The following citations have been relied upon by him :- (1) 1989 (43) E.L.T. 132 - Tata Oil Mills Ltd. v. CCE (2) 1989 (40) E.L.T. 280 - Bhor Industries Ltd. v. CCE (3) 1989 (43) E.L.T. 214 - CCE v. Ambalal Sarabhai Enterprises. The learned advocate has also stressed that the impugned product ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance the mixture of Chemicals containing Crude Sodium Bicarbonate in the above form is not known and cannot be known also as Sodium Bicarbonate or Sodium Bicarbonate with impurities as it only exists in the process of manufacturing of Soda Ash and cannot be used anything else." 5.1 Similarly, the affidavit of Shri Sukh Chain Lal Jain who also claims to have a very high qualifications and extensive experience, has the following to say on the impugned product :- That a mixture of chemicals in wet form containing Sodium Bicarbonate in the intermediate stage of manufacture of Soda Ash is not known as Sodium Bicarbonate or as Sodium Bicarbonate with impurities. That during my 48 years of experience I have not known that the aforesaid mixture of chemicals has at any point of time come to be bought or sold ordinarily in the market. Technically it is not workable due to recyling of Carbon-Dioxide upsetting balance. That in commercial parlance the mixture of Chemicals containing Sodium Bicarbonate is not known or cannot be known as Sodium Bicarbonate or as Sodium Bicarbonate with impurities." 5.2 Learned advocate for the appellant has further pointed out, on the authority of Chem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed in the dryers. NH4HCO3 - NH3 + CO2 + H2O (steam) Ammonium chloride is converted to sodium chloride, NH4CL + NaHCO3 - NaCl + NH3 + CO2 + H2O(steam) and the sodium chloride formed, together with sodium chloride present as such, is left in the soda ash. Any precipitate of magnesium carbonate in the bicarbonate will find its way to the soda ash which, when dissolved, shows turbidity in the solution. When the wet bicarbonate is dried by long exposure at a low temperature to prevent decomposition of sodium bicarbonate, it is difficult to decompose the ammonium bicarbonate completely and to drive off all ammonia from the sodium bicarbonate obtained. For, in a bicarbonate layer as thin as inch, dried at a temperature of 60 to 70 C over steam coils for a period of 12 hours, enough ammonia remains in the dried bicarbonate to give a distinct odor, while about 10 per cent of the bicarbonate has been decomposed to normal carbonate. This is an unsatisfactory, situation, to say nothing of the impurities left in the product obtained. Therefore pure sodium bicarbonate cannot be made directly this way. At first thought it would seem natural to start with this crude bicarbonate from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubber; gold and platinum plating; treating wool and silk; fire extinguishers, prevention of timber mold; cleaning preparations; laboratory reagent; antacid; mouthwash." 5.5 Apart from the foregoing additional technical literature brought on record by both sides, there are specifications prescribed in the Indian Standard No. IS : 2124-1974 which has been the subject of examination in the Tribunal s Order reported in 1988 (37) E.L.T. 155. Both sides have also relied on ISI specification, relevant extracts from which are reproduced below :- 0.3 Sodium bicarbonate is used as baking powder, reagent in analytical chemistry; in the manufacture of effervescent salts and beverages. It also finds use in artificial mineral waters, gold and platinum plating, tanning industry, treating wool and silk, fire extinguishers and ceramics. 2.1 There shall be three grades of the material, namely. Pure Grade, Analytical Reagent Grade and Refined Grade." 5.6 Learned advocate has submitted that it is apparent from the aforesaid technical literature that the impugned product is variously known as crude Sodium Bicarbonate and wet Sodium Bicarbonate ammonia soda but nowhere it is specified as Sodium ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect evidence how these peculiar goods are dealt with in the particular market dealing with those goods but there is evidence how these are to be understood in the light of the specifications of the Indian Standard Institute . [Para 8 of the Report]. (2) 1977 (1) E.L.T. (J 199) - UOI v. Delhi Cloth General Mills [In para 12 of the said Report the Court relied on view of Indian Standards Institution as regards what is refined oil as known to the trade in India rather than on some work of a foreign author in respect of Trade and Practice abroad.] 5.8 Controverting the arguments of the learned advocate Shri S. Chakraborti, learned DR for the Revenue has stated in the first instance that marketability of goods for the purpose of levy of excise duty is not relevant so long as the goods produced are covered by the definition or description of goods in a Tariff Item. This has been held so, according to him, by the Supreme Court in 1978 (2) E.L.T. (J 389) - Para 7 [H.U.F. Business known as Ramlal Mansukhrai Rewari and Another] and 1985 (20) E.L.T. 202 [Oriental Timber]. He also relies upon some judgments of Tribunal reported in 1985 (21) E.L.T. 532 [Ilac Ltd. v. CCE]. He submits t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .8 99.0 A-2 It does not pertain to all grades of commercial Sodium Bicarbonate. From this angle he submits that ISI specifications do not advance the case of the appellant. 5.9. With reference to Condensed Chemical Dictionary, learned DR submits that the impugned product merely needs to be purified since it is stated therein that Sodium Bicarbonate can be produced also by purifying the crude product from the Solvay process. He, therefore, submits that nothing more than purification of the impugned product is called for to produce Sodium Bicarbonate of greater purity. This means that the impugned product is also Sodium Bicarbonate. Relying on the Book Manufacture of Soda , the learned DR submits that there are many patents dealing with the refining of Bicarbonate arising in the manufacture of Soda Ash. This book also reinforced his earlier arguments that the impugned product is a merely an impure form of sodium Bicarbonate. He further relies for the same argument on another Technical Book, namely Industrial Chemicals by Faith, Keys Clarks wherein it has been mentioned that some Sodium Bicarbonate is made, however, by purifying impure Sodium Bicarbonat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcisable goods in the concerned Tariff Items namely 26AA (iron and steel products) and 16B (plywood) respectively. There the tariff descriptions were in such a manner that the excisability arose on the physical shape of the product. The moment the commodity acquired the said physical shape, as described in the Tariff Item, the Supreme Court held the goods to be excisable irrespective of their marketability but the instant case is different. He submits that the present case is more analogous to Bhor Industries and Ambalal Sarabhai. 5.14 Discarding of the ISI specifications by the Supreme Court in the case of Indian Aluminium Cables, the learned advocate has submitted that it was in the context of the specific description of the Tariff Item from which the Supreme Court s comments arose. The Tariff Item in that case was aluminium wire rods. The question was whether aluminium properzi rods were wire rods or not and in that context the assessee therein relied upon the ISI specifications. The Supreme Court held that the Tariff description being wire rods and there being no dispute that properzi rods are also known as wire rods the mere fact that the concerned rods did not conform to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, as it stood at the relevant time, in order to be goods as specified in the entry the first condition was that as a result of manufacture goods must come into existence. For articles to be goods these must be known in the market as such or these must be capable of being sold in the market as goods. Actual sale in the market is not necessary, user in the captive consumption is not determinative but the articles must be capable of being sold in the market or known in the market as goods. That was necessary . The extracts of the affidavits of the two experts brought on record by the appellant have already been set out above. No evidence to the contrary had been adduced by the department. Even the technical literature relied upon by both sides and in particular, Industrial Chemicals relied upon by the department (relevant extracts from which have already been set out above), clearly indicates that the impugned product cannot be termed as Sodium Bicarbonate . In fact, the product has been given various names in various books such as crude product, impure product, ammonia soda etc. These various names bringing out the impure and crude character of the impugned product itself is indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant gave whatever information was available with him in July 1985. This is despite the fact that the classification lists, the process of manufacture containing details of chemical reactions etc. were filed before the department and all other information which was required was given by him as promptly as possible. Despite this the department has issued the notice long after the stipulated normal period of six months and therefore, the demand of duty is time-barred. It cannot be held, submits the learned advocate, that there was any wilful mis-statement or suppression of facts or there was any contravention of rules with an intent to evade payment of duty warranting invocation of larger period of 5 years for demand of duty. There was no allegation, he submits, in the show cause notice regarding wilful mis-statement or suppression of facts or contravention of rules with an intent to evade payment of duty. Accordingly, the larger period for demand of duty cannot be invoked. He relies for this proposition on Jay Engineering Works v. CCE [1985 (21) E.L.T. 299-Para 9]. He also states that in order to attract larger period of 5 years for recovery of duty some positive action or withholdin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o set aside. 7.0 As a last attempt the departmental representative submitted that in case the Bench is inclined to differ from the earlier decision of the Tribunal reported in 1988 (37) E.L.T. 155 in the matter of the appellant himself, it would be advisable to set up a Larger Bench so that finality can be given on this issue. Opposing this request, the learned advocate for the appellant has urged that there is no need for a Larger Bench inasmuch as fresh facts and clearer enunciation of law has since been made. In view of these new developments, setting up of a Larger Bench is not called for. This Bench itself is competent to take a decision. He relies on Tribunal s Order No. 344-345/89-A in the case of CCE, Meerut v. Modi Zerox Ltd. apart from citing Supreme Court s judgment in the case of Brij Lal Lohia mentioned in connection with the Issue No. 1. We are inclined to agree with the learned advocate for the appellant. In view of the fresh material having been brought on record there are cogent reasons for differing with the earlier judgment of the Tribunal. Normally a Larger Bench is set up when conflicting judgments of different Benches of the Tribunal are there or likely to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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