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TMI Blog2000 (3) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... and disposed of by this common order. 2. The brief facts of each case are set out hereunder : E/Appeal No 197/92-C : The assessee was engaged in the manufacture of goods falling under Chapters 28, 29, 32, 34, 38 and 39 of the Schedule to the CETA 1985. During the process of manufacture of pesticides, viz. Monocrotophos (MCP) classifiable under CET sub-heading 3808.10 attracting nil rate of duty at the relevant time, an interim product called MMACL came into existence. The product was chemically stable, commercially known and also marketable and classifiable under CET sub-heading 2924.00. Since the assessee failed to declare this interim product, and since the assessee did not pay duty on the same, show cause notices dated 27-2-1991 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 P for the period 1-3-1986 to 30-11-1987. The assessees contended that the impugned product was not a stable compound, it could not be stored for more than 2 to 3 days, that the product available in the market was in the form of flakes which was available from foreign suppliers and that the MMACL which was marketed by M/s. Colour Chem Ltd. in India was in Dichloro Ethane solution while their product was in toluene solution which could not be compared with or equated to either the imported flakes of MMACL or MMACL in DCE solution. They also contested the demand on the ground of timebar. The Adjudicating Authority dropped the proceedings accepting the assessees' contention that MMACL produced by them was not marketable and hence not excisabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... New Delhi (copy of the opinion of the Chief Chemist is enclosed herewith). After detailed examination and an on-the-spot-study conducted at the said factory, it is observed that the said MMACL which emerged as an processed material at the intermediate stage in the manufacture of MCP cannot be marketed as it is in the form of wet cakes which get degraded on exposure to ambient conditions. If the processing or use of the chemical is done under controlled conditions particularly of pressure which should be very low, the conversion of wet cakes, upon further purification, to flakes is possible. It is the latter commodity which is marketable. It is thus clear that considerable activity has to be gone through with appreciable investments in equip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of MCP followed by the two factories is slightly different from each other. The report on the study of process of manufacture followed by both the factories is briefly described below:- It is seen from the mass flow diagram and visit of the plant of M/s. Ciba Ceigy that synthesis of monocrotophos involved chlorination of monoethyl acetoacetamide. The chlorination reaction results in the formation of a mass consisting of chlorinated compounds, water and sodium chloride, chlorinated compounds consists of mostly MMACL - monoethyl chloro acetoacetamide and very small quantity of MMACL2 - monoethyl dichloro acetoacetamide. The chlorination are carried out in dichloroethene solvent system and after chlorination, the reaction mass is neutralised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it is centrifuged to wet cake form whereas in the second case it is further concentrated to obtain MMACL of about 80-85% purity which is kept in molten condition at around 85OC for a very short duration, for immediate conversion to monocrotophos in the next step. It is stated that molten MMACL could not be isolated, stored or transported because - (i) the melting point of MMACL is 80-81OC and if it is allowed to cool down at ambient temperature it solidifies to a hard mass and solidified mass melts at a temperature higher than its melting point and resulting material is unfit for manufacture of MCP. (ii) there is substantial degradation of MMACL at about 343OC or 70OC leading to runaway reaction at high temperatures. The analysis of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re it attains stability and marketability. The Department has not brought on record any material to establish that MMACL in toluene solution (which is the product in dispute in M/s. NOCIL case) or MMACL in centrifuged wet cake form (the product in dispute in M/s. Novartis case) is marketable. The product in dispute cannot be equated either to or compared with either MMACL in flake form which was imported by M/s. Nocil or MMACL in DCE solution (Di-chloro-Ethane solution) cleared by M/s. Colour Chem. Ltd. to M/s. NOCIL and the Department has not shown that MMACL produced in the factory of either of the respondents is comparable to MMACL in flake form (which is of higher purity) or MMACL in DCE solution. Hence the evidence in the form of gate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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