9911796707
TMI Blog1994 (10) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... henyl is a preparation consisting of Rosin, Castor Oil, Caustic Soda and is used as a disinfectant and, therefore, the same is classifiable under Heading 3801.90 (revised 3808.90) attracting duty at the rate of 15% ad valorem. The other product, namely, Antiseptic Lotion branded as Dispel is manufactured from DCMXC Chloroxylemols Turpinol, Denatured Alcohol and Soap Solution. This product also falls under the same Heading, namely, 3801.90 (revised 3808.90). In reply, it was contended by the appellants that the said products manufactured by them were covered by the Medicinal and Toilet Preparations and as such the goods were exempted from duty upto 28-2-1986 under Notification No. 234/82, dated 1-11-1982. It was further contended that, they were not aware of the changes brought about by the Central Excise Tariff Act, 1985 as a result of which these goods have been brought under the purview of the excise liability and further that Phenyl is a product coming under the purview of the Drugs and Cosmetics Rules, 1940 as disinfectant fluid, and therefore, it is classifiable under Chapter 30 and is also exempt from payment of duty. Likewise, the Antiseptic Lotion is a drug and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Customs, Kanpur, 1988 (35) E.L.T. 725 (Tri.) = 1988 (17) ECR 779. It was further submitted that it has been the consistent view of this Tribunal that the classification being a basic question, the Tribunal has to consider the appropriate Heading, even though the ground had not been urged before the lower authorities. He clarified that the question of classification could be decided in the light of the evidence available on the record and the technical literature sought to be produced by way of additional evidence can also be referred to while challenging the classification of the goods. The learned JCDR, Shri Sidarath Kak, has no serious objection if the appellants are permitted to raise the said new ground and for that purpose to refer the technical literature. After considering the record we find that the said new plea could be decided on the basis of the evidence available on the record and, therefore, we allow the appellants to raise the said plea regarding the classification of the subject goods. ON MERITS 6. At the outset, the learned counsel submitted that though it was the case of the appellants all through before the adjudicating authority as well as in the Memorandu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... henyle is classifiable under the New Tariff under Heading 3808.90. For ready reference the relevant observations of the Tribunal may be reproduced as under : 6. The dispute therefore is whether phenyle is classifiable under Tariff Item 3808.10 or 3808.90. 7. This Tribunal in M/s Bengal Chemicals Pharmaceuticals Pvt. Ltd. case following the order of the same assessee reported in 1990 (48) E.L.T. 436 held that phenyle is a disinfectant. After 1st March, 1986, the chapter Heading 38 read as follows : 3801.20 - Insecticides, Fungicides, Weedicides and Pesticides. After 1st March, 1987 the relevant tariff heading read as follows : 38.08 - Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant growth regulators, disinfectants and similar products. 3808.10 - Insecticides, fungicides, herbicides, weedicides and pesticides 3808.90 - Other" 8. A reading of the tariff schedule after 1-3-1987 makes it clear that after 1-3-1987 `disinfectant is added to the tariff item and insecticides etc. are classified under Tariff Item 3808.10. The remaining, namely, anti-sprouting products, plant growth regulators, disinfectants and similar products are c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with. It is on the initiative of the appellants that the Central Excise Officers concerned visited the factory of the appellants and collected samples and promised to guide them. On 6-1-1987 the appellants wrote to the concerned Central Excise Authorities enquiring about the result of the test of the sample and also for a clarification regarding the excisability of the product. However, there was no response from the Department and all of a sudden the factory of the appellants was searched on 20-1-1987 and the goods were seized and a case was registered against them. In a nutshell, his submission was that this background circumstances of the case would prove that because of the genuine doubt about the excisability of the product, the whole industry was in the dark and by no streach of imagination it can be said that the appellants suppressed the fact or made a wilful mis-statement with intent to payment of central excise duty. To buttress his submission, he cited the case of Collector of Central Excise, Hyderabad v. M/s Chemphar Drugs Liniments, Hyderabad, 1989 (40) E.L.T. 276 (SC) = 1989 (21) ECR 182 (SC), wherein the Apex Court held that the extended period of limitation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned Association the Central Board of Excise Customs clarified vide their letter F. No. 125/5/86-CX, dated 10-11-1986 confirming that phenyl was classifiable as disinfectant. They also claimed that after November, 1986 they had approached the range staff for ascertaining the formalities to be complied with and it was on the initiative of the company that the Central Excise Officers visited their factory and drew samples for test. The appellants also stated that on 6-1-1987 they had also written to the Department enquiring about the result of the test of the sample and also requested for a clarification regarding the excisability of the product but on 20-1-1987 their factory was searched. 12. The learned counsel for the appellants has reiterated these points before us. He has contended that the Collector while invoking the extended period for confirmation of the demand has not dealt with these points and held that by clearing the goods during the relevant period without filing any declaration and without payment of duty the company had contravened the Central Excise Rules for which ignorance of law could not be an excuse. It is seen that the appellants have not placed before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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