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TMI Blog1999 (8) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... 084/93 (a) 29-1-1992 1-8-1991 to 31-12-1991 Rs. 20,46,994.23 Nil (b) 3-8-1992 1-1-1992 to 29-2-1992 Rs. 10,77,390.00 Nil (c) 1-10-1992 1-3-1992 to 31-8-1992 Rs. 19,96,362.88 Nil (d) 25-2-1993 1-9-1992 to 31-1-1993 Rs. 19,83,411.76 Nil Rs. 71,04,159.47 (2) E/R-349/96 28-1-1994 7-1-1989 to 31-7-1991 Rs. 47,59,343.40 Rs. 30.00 lakhs 3. Brief facts of the cases are as under : - 3.1 The appellants are engaged, inter alia, in the manufacture of blended or compounded lubricating oils. They also process a product called 'Super TT' which the appellants claim to be a blended lubricating oil ordinarily used for lubrication. The undisputed process of manufacture of the said product as given by the appellant firm in their appeal memos, is as under :- 'Base Oils are taken to the blending kettle, heated to remove moisture. Additives are added and mixed well. Temperature reduced and MTO and green dye added and mixed well, to get the final product.' 3.2 As admittedly, the flash point of the 'Super TT' is below 94°C, the same is not classifiable under Heading 2710.60 of the Tariff as the same takes into its ambit lubricating oils having flash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstances, it cannot be said that they had suppressed or mis-declared any facts from the Department justifying invoking of larger period of limitation. He submitted that the demand in Appeal No. E/R-349/96 was wholly barred by limitation as the entire period covered is beyond the normal period of limitation of six months whereas in Appeal No. E (SB) 5084/93, a part of the demand would be beyond the limitation period. 5. As regards the merits of the case, the learned Advocate argued that admittedly, they are manufacturing lubricating oils. Their product is known in the market as lubricating oil and is actively recommended by the manufacturers of two wheelers like TVS Suzuki etc. for lubrication purposes. He drew the attention of the Bench to the Dealer's Certificate and the End-Use Certificates issued by the two wheelers manufacturers in support of his submissions that the product is used for lubrication by mixing the same with petrol and is known in the market as lubricating oil. The product is containing petroleum mineral oil to the extent of 70% or more. Drawing the attention of the Bench to the extracts from the technical books and chemical dictionaries, and the owne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identiary value of the Chief Chemist's Report, he made a reference to Gujarat High Court decision in the case of Stadfast Paper Mills v. D.R. Kholi & Others reported in 1983 E.L.T. 744 (Guj.) wherein it was held that the report of the Chief Chemist must be confined to the supply of data obtained by him through chemical analysis and it is not his function to give an opinion as to the classification of the product. He submitted that the Board's Circular F. No. 88/2/91-CX-3, dated 9-4-1993 only excludes the lubricating preparations falling under Heading 3403 from the scope of Notification No. 120/84-C.E. and is silent about the entitlement of benefit of lubricating oils falling under sub-heading 2710.99. In any case, these Circulars are not binding in character, submitted Shri Cama and relied upon Supreme Court's decision in the case of Bengal Iron Corporation v. Commercial Tax Officer reported in 1993 (66) E.L.T. 13 (S.C.). He submitted that as laid down by the Hon'ble Supreme Court in the case of Delhi Cloth & General Mills Co. Ltd. - (1980 E.L.T. 383 (S.C.) and Collector of customs v. Bhor Industries Ltd. reported in 1988 (35) E.L.T. 346 (S.C.), Commercial Parlance Test is the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escription given against sub-heading 2710.60, he emphasised on the words - 'that is to say' - in support of his submission that only lubricating oils having flash points above 94oC are lubricating oils. He also referred to Tribunal's decision in the case of Collector of Central Excise v. I.P.C.L. reported in 1990 (46) E.L.T. 173. As regards the common parlance Test, he argued that when there is a clear and unambiguous definition in the Tariff heading, the same has to be given preference. He placed reliance on the Supreme Court's decision in the case of Collector of Central Excise, Hyderabad v. Fenoplast (P) Limited, which is reported in 1994 (72) E.L.T. 513 (S.C.) and in the case of Electronic Components Industries v. C.C., Cal. reported in 1997 (92) E.L.T. 511 (Tribunal). He argued that the appellants' product might be known as lubricating oil in the market, but if the same does not conform to the definition as given in the Tariff, the same cannot be considered as lubricating oil and the benefit of the Notification cannot be extended. Countering the arguments of the appellant firm that duty was being paid in accordance with the approved classification list, in which case even six ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal duty of Customs leviable under Section 3 of the Customs Tariff Act, 1975 (51 of 1975), has been paid. Explanation. - For the purposes of this notification, all stocks of mineral oils obtained by a manufacturer for producing lubricating oil and greases, except such stocks as are clearly recognisable as being non-duty paid, shall be deemed to have discharged appropriate duty of excise leviable under Section 3 of the Central Excises and Salt Act, 1944 (1 of 1944) or the additional duty of customs leviable under Section 3 of the Customs Tariff Act, 1975 (51 of 1975). [Notification No. 120/84-C.E., dated 11-5-1984 as amended by Notifications No. 78/86-C.E., dated 10-2-1986; No. 256/88-C.E., dated 30-9-1988; and No. 94/89-C.E., dated 1-3-1989]" 9. A reading of the Notification shows that there is no mention of Tariff heading in the said Notification. The exemption has been granted to lubricating oil simpliciter. Now the question arises as to whether the description given against sub-heading 2710.60 can be considered to be the definition of lubricating oil and the oil having flash point below 94°C cannot be considered as lubricating oil. The appellant firm has referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers like TVS, Suzuki etc., make it evident that the appellants' product is being marketed by them as a lubricating oil and is being treated by the various persons who use the same as lubricating oil. The other manufacturers of similar products, like Bharat Petroleum Corporation Ltd. and Castrol Oil Co. Ltd. have also certified that they are availing the benefit of the self-same exemption Notification for their similar product. In our views, the market parlance and how a product is known and traded in the markets is an important criteria for classification of the product, as laid down in the several authorative judgments. All the above materials clearly establish that the product 'Super TT', is nothing but lubricating oil. It may not be classified under sub-heading 2710.60 because of it flash point being below 94oC. That is why, the same has been classified as others under Heading 2710.99. It is not that only Oils having flash point will be above 94oC and would be considered as lubricating oil and the rest of the lubricating oils would not be entitled to be considered as lubricating oils. The reference to the flash point under sub-heading 2710.60, in our views, is only for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definition of lubricating oil extracted from Hawley's Condensed Chemical Dictionary, 11th Edition, and mentioned in the report, favours the appellantsinasmuch as no flash point has been mentioned therein. The said Report is being reproduced for better appreciation of facts :- "The point at issue in the file is whether blended/compounded lubricating oils and greases falling under Chapter 34.03 are covered by the Notification No. 120/84-C.E. The Notification No. 120/84 exempts blended or compounded lubricating oils and greases, i.e. to qualify for this Notification the product should primarily be a lubricating oil or lubricating grease. Lubricating oil is defined in the technical books as under :- IS: 4639-1968. Oil usually refined primarily intended to reduce friction between moving surfaces. Lubricating oil (Lube oil) - A selected fraction of refined mineral oil used for lubrication of moving surfaces, usually metallic and ranging from small precision machinery (watches) to the heaviest equipment. Lubricating oils usually have small amounts of additives to impart special properties such as viscosity index and detergency. They range in consistency from thin liquids to grease- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been given in the Tariff which can, further, be sub-divided into different sub-headings depending upon the flash points. Accordingly, we do not find any merit in this contention of the Revenue. 16. We may observe here that though it is a settled principle of law that in a fiscal provision, the benefit of exemption should be construed strictly as laid down by the Honourable Supreme Court in the case of M/s. Swadeshi Polytex Ltd. v. Collector of Central Excise reported in 1989 (44) E.L.T. 794(SC), the strictness of construction of exemption that Notification dues not mean that the full effect in the exemption notification should not be given by an circuitous process of interpretation. The two criteria required for extending the benefit of Notification No. 120/84 , stand fully satisfied by the appellants. We also find that on the same fulfilment of conditions, the benefit of the Notification is being allowed by the Department to the other similarly situated unit and in fact, to the other unit of the same appellant firm at Bombay. In this view also, we hold that the appellants were entitled to the benefit of the exemption Notification. 17. We also find that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E/RR-349/96, we find that in view of our discussions above and in view of the facts and circumstances of the case, the same is not sustainable. Accordingly, the same is set aside. Resultantly, all the appeals are allowed with consequential reliefs to the appellants, if any. Sd/- Archana Wadhwa Member (J) 20. [Order per : P.C. Jain (Contra)]. -I have perused the order proposed by the ld Sister, Mrs. Archana Wadhwa, Judicial Member, I propose to write a separate order. 20.1 Main question before us is whether "Lubricating Oils" having flash point below 94oC, manufactured by the appellants is covered by Notification 120/84-C.E. (as amended) during the collective period 7-1-1989 to 31-1-1993 covered by different show- cause notice involved in these appeals. Contention of the Revenue is simple. According to it, "lubricating Oils" have been defined in the C.E. Tariff sub- heading 2710.60. Therefore, lubricating oils referred to in Notification 120/84-C.E.(as amended) must conform to that definition. In order to appreciate this contention, I reproduce sub-heading 2710.60 :- "2710.60 - Lubricating oil, that is to say, any oil as is ordinarily used for lubrication, excludin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar scheme has been adopted in other sub-headings of Heading 27.10 by defining some other petroleum oils, namely, 'motor spirit' with sub-headings of its different varieties 2710.11 to 2710.19; Kerosene and aviation turbine fuel (sub-heading 2710.21 to 29); refined diesel oil (sub-headings 2710.31 to 2710.34); Diesel oil (2710.40); furnace oil (2710.50). 21.2 I am, therefore, of the view that when any notification exempting any product falling under this chapter uses any of the above expressions, it would have the same meaning, unless the context otherwise means differently, as given in the above various sub-heading for various mineral Oils. For example, a notification [No. 179/73-C.X. (as amended)] uses various expressions, motor spirit Kerosene, R.D.O. or Dio (n.o.s) which is laying down the limits for drawal of duty free samples. It will be difficult to argue with any conviction that those expression should be understood as they are used in commercial parlance without recourse to the definitions as given in various sub-heading of Headings 27.10 mentioned above. For the same reason, expression 'lubricating oil' used in that notification will have to he understood as defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing flash point below 94oC cease to be "lubricating oil" but acquire the general and nameless description 'others' under sub- heading 2710.99. 21.4 As regards a submission of the ld. Advocate that in other commissionerates of Central Excise, similar oil is being extended the benefit of Notification 120/84-C.E. this in our view, is not of consequence, even if it is true, for the reason that this Tribunal is not competent to look into allegations of discrimination in assessments made by one quasi-judicial officer and that by another. In my views, it is but inevitable in the system of judicial process obtaining in this contry under the prevalent laws. Consequently, I hold that benefit of Notification 120/84- C.E.C. will not be available to the super TT oil because of having flash point below 94oC. Next is the question of limitation:(i) whether limitation of five years under Section 11A would apply as has been made applicable by the lower authority, or (ii) show-cause notice would apply prospectively, as has been contended by the ld. Advocate for the appellant. 21.5 I note that the appellant had been clearing the product after approval of its classification under sub-head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ni Textile Mills- [1996(88) E.L.T.639 (S.C.)]. As against the aforesaid plea, ld. SDR has relied on Apex Court's another judgment in Ballarpur Industries Ltd. - [1995 (76) E.L.T .499(S.C.)]. He further submits that Ballarpur (supra) clearly holds that S.11A can apply only to past recoveries. To make the s.c.n. prospective will be to make the provision of S.11A superfluous. I have carefully considered those pleas. Factual position in Bhawani Textiles was completely different. It has been held by another Bench of the Tribunal in Gujrat State Fertiliser Co. Ltd. v. C.C.E. - [l997(72) ECR 852] that Ballarpur Industries is to be preferred over Bhiwani Textiles inasmuch as that Ballarpur judgment has been delivered by three ld. judges of the Apex Court as against the two ld judges of that court in Bhiwani. Further Bhiwani did not notice Ballarpur. 22. Apart from the foregoing distinction, I also note that Bhiwani had a peculiar factual position, like that in Madhumilan Syntax - [1988 (35) E.L.T. 349 (S.C) relied upon by the Court. In the first case, a classification list at a lower rate had been approved by the Revenue on a date subsequent to the periods of demand; in Madhumilan sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /84-C.E., dated 11-5-1984 (as amended) to the product named Super T.T. having a flash point below 94oC, classified under sub-heading no. 2710.99 of the Central Excise Tariff. The product Super T.T. is mixed in the petrol while filling the petrol tank of the two wheeler. The Member (J) while observing that the product in question was not classifiable under sub-heading no. 2710.60 because of its flash point being below 94°C, proposed that as Notification No. 120/84-C.E. did not make any reference to the heading number and extended the benefit to lubricating oils irrespective of their flash point, the appellants were entitled to the benefit of the said exemption notification. The Member (T) now Vice-President after referring to the definition of lubricating oil as contained in sub-heading no. 2710.60 observed that the expression "lubricating oils" used in Notification No. 120/84-C.E. excluded hydrocarbon oil which had its flash point below 94oC. As the flash point of Super TT was below 94oC, he held that the benefit of Notification No. 120/84-C.E. was not available to the same. The demand for the normal period of limitation was confirmed. 26. The matter was heard on 17-5-199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of show cause notice and not prospectively from the date of notice. 28. I have carefully considered the matter. M/s. Castrol India Ltd. were engaged in the manufacture of two stroke engine oil which they called Castrol Super T.T. In the process of manufacture of Super T.T. base oils were taken to the blending kettle, heated to remove moisture; additives were added and mixed well; temperature was reduced and green dye added and mixed well to get the final product. The flash point of the Super T.T. was below 94oC. The flash point is the minimum temperature to which an oil must be heated so that it gives enough vapour which can form a flammable mixture with air under the condition of test. Flash point is required to be determined in accordance with the tests prescribed in this behalf in the Rules made under the Petroleum Act, 1934. The Castrol Super T.T. had been described by the manufacturers as high performance two stroke engine oil. It is claimed to ensure complete combustion of petrol and to keep engine clean and well lubricated. It has been referred to in the product literature that castrol Super T.T. is a especially formulated lubricating oil consisting of highly re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the scheme of the Tariff could not be assailed on the ground that it had extended or curtailed the commercial understanding of the dictionary meaning or the product. It is an admitted fact that the flash point of the Super T.T. was below 94oC. It was thus not covered by the definition of lubricating oil as appearing in sub-heading no. 2710.60. 31. Under Notification No. 120/84-C.E., dated 11-5-1984 (as amended), blended or compounded lubricating oil and greases, that is to say, lubricating oils and greases obtained by straight blending of mineral oils or by blending or compounding of mineral oils with any other ingredients, subject to certain conditions as provided in that notification were eligible for exemption from the payment of central excise duty. A restricted meaning has been given to the product "lubricating oil" in the Tariff. The same restricted meaning has to be given to the product "lubricating oil" for the purpose of exemption under Notification No. 120/84-C.E., dated 11-5-1984 (as amended). The learned Member (T) now Vice-President has referred to the Supreme Court decision in the case of Steel Authority of India Ltd. v. C.C.E., Bolpur, West Bengal, 1997 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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