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TMI Blog1993 (11) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... to 11-4-1988, the Department drew samples from time to time arid approved the classification lists and the Assistant Collector had with him two test reports before the Classification Lists were approved in 1986-87. 6. The process of manufacture was also seen time and again by many central excise officers visiting the factory and some of these visits were by surprise. 7. RT-12 assessment was also finalised by officers upto December 1987. 8. As early as 8-4-1985, the Chemical Examiner had reported that the sample is in the form of yellow coloured brittle lumps. It has a characteristic of estergum, an artificial resin . 9. Subsequently a show cause notice, dated 13-6-1985 was issued by the Superintendent asking them to show cause why it should not be classified under Tariff Item 15A but without giving any reason except that Assistant Collector has intimated that it was on the basis of test report obtained from Calcutta Customs. When another sample of Durone-10 was drawn and sent to Chemical Examiner, New Delhi, he reported that it was rosin based artificial resin in the form of yellowish coloured brittle flake and powder . 10. However, despite the above show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he show cause notice does not allege or state that it was not a derivative of rosin. Not only that the fact was even otherwise confirmed by two test reports. 17. No test report says that rosin was a natural polymer. Further it could not be a higher polymer. Its molecular weight was only between 1200 to 1300 and it could never be used for the manufacture of the modified natural polymer. 18. It was also their contention that Note 4(f) under sub-heading 39.13 HSN excludes rosin derivatives from that sub-heading. 19. It is also their contention that the re-test report, dated 11-7-1988 confirms that Durone-10 was a derivative of rosin and this re-test having been sought by the Department itself was binding and inclusive. It was their contention that the Department was always in dilemma because sometimes it called Durone-10 as estergum, sometimes rosin derivative and sometimes a modified natural polymer and now it was being called a high polymer. In a situation like this when the Department was itself in doubt, the benefit should go to the appellants. 20. The Board s letter issued in 1985 also shows that the estergum did not fall under Tariff Item 15A. 21. The appellants had al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Chief Chemist (on the Department s side) it appeared that while the appellants were using Pentaerythritol, they were also using glycerine. It was also admitted by the Chief Chemist that basically the process consists of esterification of rosin and no polymerisation is involved. 26. The learned Counsel also accepted that this was the basic process and for this purpose, Pentaerythritol as well as glycerine have been used. 27. The learned Advocate also reiterated his submissions with reference to the technical material, the written write-up and other documents filed by him. In particular, he referred to the exemption Notification No. 142/82-C.E., dated 22-4-1982, regarding effective rate of duty on estergum, the classification lists filed by them, the process of manufacture indicated by them and the extracts from Hawley s Condensed Chemical Dictionary and Encyclopaedia of Polymer Science and Technology. 28. Regarding non-declaration of glycerine and his other submissions, he cited the Supreme Court judgment in the case of Shrisht Dhawan (Smt.) v. M/s. Shaw Brothers [1992 (1) SC Cases 534] in which it has been held that non-disclosure of fact not required by statute to be dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naturally occurring esters). 34. H.S.N. Heading 39.05 in fact describes estergums as Artificial resins obtained by esterification with glycerol or other polyhydric alcohol . 35. The rosin itself is a mixture of a number of naturally occurring chemical compounds and the product of their esterification is also a material of complex composition. Again natural rosin can be modified and stabilised by a number of physical and chemical processes to yield rosin derivative(s). 36. The Encyclopaedia of Polymer Science and Technology Volume 12 mentions at page 140 as follows: Rosin and Rosin Derivatives Rosin or colophony, is a thermoplastic acidic product (resin) isolated by widely different procedures from exudates or living pine trees and from freshly cut and/or aged bole and stump wood or various species of pine."... Rosin is a clear, pale yellow to dark amber, thermoplastic resinous solid.... 37. The forms of rosin include: (1) Gum Rosin or Pine Gum (2) Wood Rosin etc. 38. Rosin is an acidic resin Composition: Rosin is a complex mixture of mutually soluble, naturally occurring high molecular weight, organic acids and related neutral materials. The acidic cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Tariff Heading 39.13 which covered natural polymers and modified natural polymers was not attracted. 48. This brings us to the question of the appellants actions, the correctness or incorrectness thereof and the liability if any. 49. In this context, we note that the appellants had declared their product merely as Durone-10 in the Classification List. This was by itself not sufficient as the assessee is expected to describe product in such sufficient details as may enable the officers to identify the products and classify them properly and determine their eligibility or otherwise to the Notification, if any applicable and arrive at a correct rate of duty. 50. There was, however, an equal responsibility cast on the assessing officer to call for such information as may be necessary or to make such enquiries as may be called for before finalising the assessment. 51. In the instant case the appellants product has been repeatedly subjected to testing and classification had been approved after enquiry and testing. Therefore, the approval could not be faulted with. 52. It is also noteworthy that the Board had issued a Tariff ruling No. 13/1965, dated 31-7-1965 (F. No. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty. 57. We also take note of the fact that the appellants submission to the effect that they had discharged the duty liability in terms of approved classification list and this has not been controverted or shown to be wrong. In this respect we also note their alternative contention that even if the product was classifiable under Tariff Item 15A during the relevant period (prior to new tariff), the duty liability stands duly discharged inasmuch as estergum was chargeable to effective rate of duty 10% ad valorem only as for Notification No. 142/82, dated 22-4-1982 and the effective rate of duty on goods falling under 15A and identifiable as estergum was also 10% ad valorem only whereas they had paid duty at I0%/12% as per approved classification list. We also take note of the submission that even if the Department s contention was accepted, that they were not only classifiable under 15A, but chargeable at the rate of 40 per cent of duty as held by the Collector even then the demand is time-barred for the period beyond the normal period of time, inasmuch as the Department itself was not sure of its stand and changed it from time to time the benefit of extended period of time was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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