9911796707
TMI Blog1998 (12) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... essees submitted a classification list for this product under CET sub-heading 28.04 and paid duty at the rate of 15% ad valorem with effect from 1-3-1987, they submitted a classification list for this product under CET sub-heading 28.51 and paid duty at the same rate. After 1-3-1988, they submitted a classification list for the same product under Heading 26.15 and availed of the benefit of total exemption under Notification 19/88, dated 1-3-1988. 3. The Department was of the view that the assessees had deliberately changed the classification of the goods from Heading 28.51 to 26.15 by wilful mis-statement and suppression of facts in order to wrongly avail of exemption under the above mentioned notification and thereby evaded duty on clearances between 1-3-1988 to October 1990. A sample of the so-called vanadium sludge was drawn and analysed by the Chief Chemist of the Central Revenue Control Laboratory and it was found to contain mainly sodium orthovanadate, moisture and some amount of Sodium Hydroxide as an impurity associated during the process of manufacture. Sodium orthovanadate has chemical formula Na3V12 H2O and it is a separate chemically defined inorganic compound. The Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present themselves with regard to this report. Lastly he contends that the demand for the period March 1988 to October 1990 is barred by limitation since right from the commencement of the manufacture of this item, the appellants have been describing it as vanadium sludge, classification lists describing the item as above, have been approved from time to time, samples of the product have been drawn in 1982 and 1990 and RT 12 returns were regularly filed for clearance of vanadium sludge and even in 1986-87 when the appellants claimed classification under Chapter 28, there was an Exemption Notification 119/86 dated 1-3-1986 for goods falling under Heading 26.01 and 26.02 and therefore, the appellants did not deliberately changed the classification of the product from Chapter 28 to Chapter 26 for the purpose of wrong availment of Notification 19/88 covering the goods under Chapter 26. For the same reason, he also pleads against imposition of penalty. 6. In reply, the learned DR draws our attention to the report of the Chief Chemist (page 104-105 of the paperbook) wherein the Chief Chemist has opined that the disputed product is a separate chemically defined inorganic compound and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemical formula Na3 Vo4 12 H2O. 8. We find that the Adjudicating authority while coming to the conclusion that the item in dispute is deliberately manufactured through the process of chilling and crystallising of spent liquor and hence cannot be called sludge, has relied upon the report of the Chief Chemist of the Central Revenue Control Laboratory, New Delhi and on the report dated 23-4-1992 of Dr. M.C. Chattopadhaya, Professor of Inorganic Chemistry in the University of Allahabad. The Chief Chemist s report is as under : A sample from the Centrifuged material was drawn and analysed in the laboratory. It was found to contain mainly sodium orthovanadate, moisture and small amount of sodium hydroxide as an impurity associated during the process of manufacture. Sodium orthovanadate has chemical formula Na3 Vo4 12 H2O. Sodium orthovanadate is a separate chemically defined inorganic compound. It is deliberately produced in the process by cooling the spent liquor at low temperature and subjecting the liquor to the process of crystallisation. Thus it is not sludge (residue) as contemplated under Heading 2620. It contains permissible impurities as mentioned in Explanatory Notes, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onate and sodium oxalate, sodium fluoride and sodium aluminate and therefore, cannot be identified by a single formula or structure and hence cannot be classified under Chapter 28 which covers separate chemical elements and separate chemically defined compounds. They submitted that there is no technology by which sodium vanadate even with 95% purity can be extracted from vanadium sludge; that the disputed product is not deliberately produced but emerging on recyling of spent liquor that the item is a residue not suitable for any of the end uses mentioned in para 7 of HSN Explanatory notes at page 302 and it is different from the sodium vanadate mentioned therein and that the presence of sodium carbonate, sodium fluoride, sodium phosphate in varying proportions to the extent of approximately 28% to 30% in the product, cannot be treated as permissible impurities in the product, as set out in that HSN Explanatory notes at page 228-C that the above points would have been elicited and verified during the cross-examination of the Chief Chemist whose report forms the basis of proceedings. They submitted that the denial of opportunity of cross-examination of the Chief Chemist, which was ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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