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TMI Blog1995 (7) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that during the manufacture of Boroline, the appellant uses the following raw materials - (a)Liquid Paraffin (light) (b)Liquid Paraffin (heavy) (c)Liquid Paraffin (hard) (d)Microcrystalline wax (e)Lanolin (wool-fat) (f)Boric Acid I.P. (g)Zinc Oxide I.P. (h)Talcum Powder (i)Perfume 3. In the process of manufacture, the three types of paraffin, Microcrystalline wax and Lanolin are charged in single process and melted at a temperature 90 to 100o C. Resultant liquid is then transferred to mixing vessel where Boric Acid, Zinc Oxide and Talcum Powder are added. After this mixture is stirred, homogenised and cooled, perfume is added. The resultant product after maturation is Boroline. He said that a sample of the product was drawn at the hot liquid stage and tested to see whether it conformed to the requirement of white petroleum jelly. The test report of the Central Revenue Control Laboratory indicated the sample to mainly contain petroleum jelly and lanolin. It was on this basis that a show cause notice was issued and the demand confirmed. He argues that the process of manufacture of Boroline is a continuous process. The mixture at the hot liquid stage is not a pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by limitation because the Sector Officer has been informed in August 1982 of the raw materials used and the brief process of manufacture. It is, further, claimed that the Department have been taking samples time to time and visiting the factory. In its letter dated 30th August 1982, the appellant company has furnished the list of raw materials to the Inspector. The process of manufacture was stated to be sieving, grinding, melting, mixing, homogenising, cooling, feeling and packing . It is not possible from the list of ingredients, and the exceedingly brief history of the manufacturing processes to come to the conclusion as to whether any intermediate product emerges, and if so, the nature of that product. This is particularly the case since the appellant claims that there is no hiatus between the two stages of manufacture. Any number of visits by the officers, therefore, would not have enabled them to see whether petroleum jelly had emerged as an intermediate product. We are also of the opinion that the appellant s reliance upon the Supreme Court decision in the Padmini Products case is mis-placed. The Hon ble Supreme Court had, in the decision no doubt observed that for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bons . The Merck Index describes it as a purified mixture of semi-solid hydrocarbons . In these works, specific characteristics of petroleum jelly also known as petrolatum such as melting point specific gravity etc., are furnished. The Explanatory Notes to the H.S.N. provide that for petroleum jelly falling under Heading 27.12, it must have a congealing point, as determined by the rotating thermometer method (ASTM D 938), of not less than 30o C, a density at 70oC of less than 0.942 g/cm3, a worked cone penetration at 25oC, as determined by the method ASTM D217 of less than 350, a cone penetration at 25oC, as determined by the ASTM D 937 method, of not less than 80. No such specification is prescribed in Chapter XII or elsewhere in the Central Excise Tariff for petroleum jelly. It is now well settled that where the terminology in the Central Excise Tariff corresponds to that in the HSN, the Explanatory Notes have persuasive value to arrive at the scope and meaning of the Heading 27.12 and its sub-headings are identically worded in the HSN of the Central Excise Tariff. It is needless [to stress] that the structure of the Central Excise Tariff is based on the HSN and headings in Chap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the appellant undertook petroleum jelly came into existence. Neither the show cause notice nor the Collector s Order deals with this aspect. The Collector seeks to justify the failure to retest the sample on the ground that the appellant was informed in the letter of 18th February 1994 that the fees had not been deposited as provided in Rule 56 of Central Excise Rules. This letter was written four years after the request for re-test was made and the appellant rightly pointed out in its reply that the fee was not a pre-condition provided under Rule 56. It pointed out that the request for retest was made within three months of the result of test report. These arguments have not been considered. The provision for retest specifically exists in order to satisfy a grievance that a manufacturer may have as a result of the test. In view of the specific reasons advanced by the appellant in its response to test report, it was only reasonable and fair that the sample was retested. After all, the appellant could have been told about the fee for retest at the earliar stage. As the matter now stands, the appellant s request for retest has been ignored, and the Collector s Order, which does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector, and denied the manufacture of petroleum jelly. They have stated, after giving the details of manufacture, that what emerged at steip I was not commercially known as White Petroleum Jelly and that it is not marketable and not exigible and not classifiable under sub-heading 2710.10. On this aspect, the department has not advanced any evidence and there is no market enquiry nor any retest carried out as requested by the party. Therefore, the whole order gets vitiated and it is required to be set aside and I agree with my Learned Brother for de novo consideration and the Learned Original Authority should reconsider the appellant s case in the light of their written submissions, technical literature, market enquiry and the case law referred by them. 13. It was also contended by the Learned Advocate, that there is no shelf life of the intermediate product and also that there was no suppression and therefore, the demands are hit by limitation. As we have set aside the order on merits and the burden of the classification is still required to be discharged by the department, hence, the question of holding the appellant having suppressed its production does not arise at all. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more of these stages various permutation combination of atoms, ions, radicals, or molecules may be involved and material may pass through various phases and various states [such as solid (amorphous or crystalline), semi-solid, liquid or gaseous, colloidal or ionic]; And in a continuous chemical process these may be just passing phase(s) or identifiable stages but that by itself is not sufficient to label any particular phase, stage or state as an intermediate product because in the phrase intermediate product both the words are equally important; hence the material should not only be one generated at an intermediate stage but one identifiable as a product and for being treated as excisable it must also be marketable as such. In this respect we have also to see whether the equipment used or the process involved was so designed and planned as to produce or manufacture or obtain an intermediate product or by-product for marketing or self use. 19. In the present case label of petroleum jelly is sought to be given to the material at a point at which it assumes the form of a semi-solid mass during an ongoing reaction process. But while doing so one has to keep in mind the above fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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