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TMI Blog2003 (9) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and seizure of documents and after examining the process of manufacture, it revealed that the items had been mis-declared by the appellants and paid lesser duty while the item appeared not to be transformer oil feed stock . It was only spindle oil requiring its classification under 3817.00. Vide show cause notice dated 28-4-2000, the details of the allegations were brought out including the statement of concerned persons and details of the documents seized. The demand for duty was raised for five years from November 1995 to February 1999 by invoking larger period on the allegation that the appellants had wilfully suppressed and mis-declared various facts with intent to evade payment of appropriate Central Excise duty on the Transformer Oil Feed Stock (Transformer Oil Grade II) and recovery of column over head material (Spindle oil - Grade II). The show cause notice relied on the Chemical Examiner s report based on the samples drawn for the latter period which opined that the aromatic constituent is pre-dominant and exceeds non-aromatic constituents in the representative samples. The specific allegations in paragraphs 12 15 of the show cause notice are extracted herein bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3817.00 of the Tariff Act. (Mahazar SL. No. DC-3/TPL factory) (E-11). Shri D. Sundaram-Chief Manager (Marketing) of TPL vide his statement dated 27-10-99 admitted that TO feed stock was sold by M/s. TPL as TO-GR-II . Shri Hanumantha Rao - Manager (QA), when he was shown the IOM, dated 2-9-94 cited above, admitted that the company had decided to sell the TO feed stock as TO-GR-II. From the foregoing it is evident that M/s. TPL were manufacturing/producing TO feed stock and they marketed the same as TO-GR-II . 2. In paragraphs 14 to 42 of the SCN, the allegations have been elaborated and the documentary evidence relied on is stated therein. In paras 43 to 54, the facts pertaining to mis-representation and justification for invoking extended time period under proviso to Section 11A(1) of the Central Excise Act is stated besides bringing out other omissions and mens rea on the part of the appellants. 3. The appellants filed their reply dated 30-1-2001 to the show cause notice. They denied the allegations and elucidated as to how the classification in terms of chapter notes; HSN explanatory notes and in terms of the manufacturing process besides the marketing pattern indicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are either sold directly as SPO (SPO Grade II) or mixed with HA to produce SPO Grade I in which the LAB composition will be 15% max and the balance will be HA. For SPO Grade II, composition will be 35% of LAB and balance HA. The entire process is controlled by DCS (Distributed Control System). 3. Therefore LAB which consists of Benzene which is an aromatic compound as confirmed by technical literature, though can be classified under Heading 27.07, it was classified under Heading 38.17 because the later was a specific heading and it was preferred to the former (27.07) which is a general heading. A copy of the Ministry of Finance s letter M.F. (D.R.) Letter No. 83/4/86-CX.3, dated 15-5-1986, contained in Calcutta II Collectorate Trade Notice No. 188/86, dated 4-9-1986 - reported in 1986 (26) E.L.T. T.17, which classified LAB under Heading 38.17 is enclosed marked as Annexure - A. 4. During the manufacture of LAB the following by-products and side stream products are produced :- Name of by-product Tariff Heading Name of Side Stream Product Tariff Heading Heavy Alkylate Spindle Oil Transformer Oil 38.17 ------ ------ Normal-Par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kerosene and Benzene is a petroleum product and the correct classification for LAB should be Chapter 27 and Heading 27.07. However the Ministry of Finance classified it under Heading 38.17. A reference is drawn to page - 873 of the Words and Phrases of Central Excise and Customs 2nd edition, enclosed marked as Annexure - C. The Entry at page - 873 for LAB clearly shows that the Supreme Court has classified it as a petroleum product. As mentioned earlier, Petroleum and its products will fall only under Chapter 27 of the Central Excise Tariff and not under Chapter 38. 7. Heading 27.10 of HSN specifically includes spindle oils, lubricating oils vide Explanatory Note A of Heading 27.10. Of course the Explanatory Note reconfirms that the spindle oils and lubricating oils should consist predominantly Non-aromatic constituents. Textbook on the subject confirm that Benzene is an aromatic compound. It is not in dispute in this case, that when M/s TPL commenced manufacture in the year 1994 of spindle oil, the preparation consisted of a blend of Heavy Alkylate and LAB Raffinate. Therefore in respect of preparation of spindle oil in the year 1994 the department readily accepted that it ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etroleum spirit containing small quantities of added anti-knock products (e.g., tetraethyllead dibromoethane) and anti-oxidants (e.g., para-butylaminophenol) (2) Lubricants consisting of mixtures of lubricating oils with widely varying quantities of other products (e.g., products for improving their lubricating properties (such as vegetable oils and fats), anti-oxidants, rust preventives, anti-foam agents (such as silicones). These lubricants include compounded oils, oils for heavy duty work, oils blended with graphite (graphite suspension in petroleum oils or in oils obtained from bituminous minerals), upper cylinder lubricants, textile oils, and solid lubricants (greases) composed of a lubricating oil with about 10 to 15% of soaps of aluminium, calcium, lithium, etc. (3) Transformer and circuit-breaker oils (not used for their lubricating properties) which are stabilised specifically refined oils with added anti-oxidants such as Ditertiarybutylparacresol. It may be noted that the above Explanatory Note (C) clearly shows that the products mentioned in (A) and (B) of Explanatory Note should be classified under Heading 27.10 unless these products are specificall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for particular use. Hence the predominance of non-aromatic substance holds good for products given under explanation C also. 19. According to the chemical examiner s report the samples contain predominantly of aromatic substances. Thus the Mixed Alkyl Benzene dispatched by the notice under a different nomenclature (invoiced as spindle oil grade I II) would not find a place under 2710 since the foremost requirement of predominance of non-aromatic substance in the product is not met. 6. The rest of the paragraphs of the finding portion deals with the aspect pertaining to suppression and the judgments relied by the Commissioner to confirm the demands. 7. We have heard learned Advocate Shri S. Ignatius for the appellants and Shri V.T.K. Nayanar, Joint Chief Departmental Representative for the Revenue. 8. Learned Advocate argued at considerable length on the written submissions besides relied on the HSN Explanatory notes and on large number of judgments to strengthen his argument to show that the item cannot be classified under chapter 38 by any stretch of imagination and it has to be classified only under chapter Heading 2710.90. He pointed out that the main ingredient u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Benzene was only 25% and during the course of manufacture, the aromatic content was sent back and not utilized at all. He submitted that there could not have been a report suggesting that mineral oil as well as aromatic content to be predominant. He pointed out that even if the report is relied, the classification has to be only under chapter heading 27.07 and not under chapter 38. He relied on IS specification 355-1992 and also the statement of Shri Ramamurthy. He pointed out that for distinguishing the item between chapters 27 38, the important factor is petroleum content therein. If the petroleum content is 70% and more, it will fall under chapter heading 27.10 and if it is less than 70%, it will fall under Chapter 38. It is his contention that constituents of main final product is more than 70% of the petroleum oil and, therefore, chapter 38 clearly discarded. He pointed out that the Commissioner has not given any finding on this aspect of the matter. He also filed a report which was given to them by the department and obtained from Chennai Petroleum Corporation. He submits that although this report has not been relied, but even as per this report, the facts pertaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analogy, the subject goods namely the mixture of LAB and HA cannot be classified under 27.10 and should fall under 38.17. He also pointed out to some of the documents which had been relied with regard to the appellants claiming as to whether the product of chapter 38 can be classified under chapter 27. He pointed out that the enormous evidence and statements clearly establishes the fact of suppression, mis-representation and hence larger period was invocable. 10. In counter, learned Counsel again reiterated his submissions and pointed out to all the documents filed to assert that subsidiary chapter heading 38 in any case will not be attracted in view of chapter headings and explanatory notes. 11. We have carefully considered the submissions made by both sides and have perused the entire records including the documents filed and written submissions given by both sides. We are required to first examine as to the contents which go to form the final product which the appellants' claim to be Transformer Oil which is marketed as Spindle Oil . It is stated by the appellants as noted from the submissions that the product has come into existence only from petroleum product namely K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lts and technical opinion from the Department of Chemistry, Anna University and signed by the Professor and Head of the Chemistry Department. The extract of these reports is taken out below :- REPORT Company : M/s TAMILNADU PETROPRODUCTS LTD. Sample : SPINDLE OIL GRADE I II SAMPLES Analysis of Spindle oil grade I and grade II (labeled as SPO Gr. I and SPO Gr. II respectively) samples was carried out at the Quality Assurance Laboratory of M/s. Tamilnadu Petroproducts Ltd., Manali, Chennai 600 068 on 7-12-2002.The following tests were performed as per ASTM or UOP reference manuals. 1. Density 2. Colour 3. Flashpoint 4. Viscosity 5. Composition. 1. Density The densities of the sample oils were determined as per ASTM D-1298 using Leimco make density scopes. The temperatures of the sample oils were noted at the time of density measurement and the observed density values were converted to density values at 15C by referring to correction factors from Petroleum Measurement Tables Vol. III (Table 53 B) for reporting. The densities of spindle oils grade I and grade II are given in Table 1. Table 1. Density data on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Column oven initial temperature 50 C initial time 0 min heating rate 8C/min final temperature 350 C final time 20 min The composition of the SPO Gr. I sample was determined from the chromatographic data as given below. Linear alkyl benzene (LAB) content 11.34% Heavy alkylate (HA) content 88.66% Gas chromatographic analysis of SPO Gr. II sample Temperature programmed gas chromatographic analysis was carried out using DB-17 column (fused silica capillary column coated with 0.25mm methylphenyl-polysiloxane) of 30 m length (0.32 mm i.d.). Hydrogen, gas was used as carrier gas at a flow rate of 1.4 ml/min and detector was Flame ionization detector maintained at 250 C. The injection port temperature was kept at 250 C. The temperature programme conditions are given below. Temperature programming- Ramp 1 Column oven initial temperature 100 C initial time 2 min heating rate 2C/min final temperature 180C final time 0 min Temperature programming- Ramp 2 Column ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he product under relevant headings. As pointed out by the appellants, the chapter heading 27.07 refers to Oils and other products of the distillation of high temperature coal tar; similar products in which the weight of the aromatic constituents exceeds that of the non-aromatic constituents . Chapter sub-heading 2707.90 refers to Other while other sub-heading refers to specific items. Since the product has been obtained by distillation of high temperature coal tar which includes kerosene also and since according to the Chemical Examiner s report if the weight of aromatic constituent exceeded that of the non-aromatic constituent, then the classification under chapter sub-heading 2707.90 cannot be ruled out. There is no reason given as to how this heading is required to be ruled out in the light of Chemical Examiner s report itself. However, we find from the report of the Professor Head of Department, Department of Chemistry, Anna University dated 9-12-2002 which is an expert opinion which is on Molex, Paraffin feedstock for its aromatic content, it states that the total aromatics content in the Molex, paraffin feedstock used for the manufacture of the main product LAB was dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s minerals in any proportion (even exceeding 70% by weight) covered by a more specific heading in the Nomenclature or based on products other than petroleum oils or oils obtained from bituminous minerals. This is the case with the anti-rust preparations of heading 34.03, which consist of lanolin in solution in white spirit, the lanolin being the basic material and the white spirit acting merely as a solvent and evaporating after application. It is also the case with disinfecting, insecticidal, fungicidal etc., preparations (Heading 38.08), prepared additives for mineral oils (Heading 38.11), composite solvents and thinners for varnishes (Heading 38.14) and certain preparations of Heading 38.23, such as starting fluid for petrol (gasoline) engines, the fluid consisting of diethyl ether, 70% or more by weight of petroleum oils and also other constituents, the diethyl ether being the basic constituent. 16. Revenue has not shown as to how the product in question would fall under this exclusion heading of explanatory notes of Heading 27.10. The exclusion clause would apply to those items which are covered by more specific heading. In the explanatory notes to Heading 27.10 in para (A), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants with regard to constituent and inputs being more than 70% of the petroleum product should be taken into consideration. Further claim of the appellant that the manufacturing process itself disclosed that aromatic content is negligible has not been adverted to by the Commissioner which should be looked into closely. Further plea that it is a non-aromatic constituent which is pre-dominant by weight should be looked into. The fact that the appellants are pleading that the exclusion clause in terms of HSN notes of chapter Heading 27.10 is not applicable to the facts of the case should also be scrutinized. Further their plea that mixed alkyl benzene and mixed alkyl naphthalenes under Chapter 38 and more particularly Chapter Heading 38.17 is not attracted for the reason that the constituents are not mixed alkyl benzene and mixed alkyl naphthalenes other than those of Heading 27.07 or 29.02 should also be examined. Further their plea that there is no mis-declaration and that there was intention to evade duty in the matter and that they have been declaring the product which has been rightly classified all along has not been appreciated in the light of the submissions put forth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omers but invoiced as Spindle Oil . Statements were recorded from various functionaries of the M/s. TPL. Show cause notice was issued to M/s. TPL demanding differential duty of Rs. 71,87,396.00 invoking penal clauses under Section 11 AC read with Rule 173Q of the CE Rules and the main contentions made in the show cause notice are : (1) The TO feed stock manufactured by M/s. TPL from the recovery of column overhead material was initially cleared as Heavy Alklate (Petolube) under Ch 3817.00 of the CETA which attracted C.E. duty at the rate of 20%. (2) M/s. TPL subsequently decided to market the TO feed as TO Grade II and cleared the same vide chapter Heading 3817.00 of the CETA. (3) M/s. TPL renamed their TO feed stock (TO Grade II) as Spindle Oil/Spindle Oil GR I under Chapter Heading 2710.90 at lesser rate of duty (i.e. 10%) in view of the objection regarding rate of duty raised by the Transformer OIL manufacturers to whom TO Grade II was supplied under sub-heading 3817.00. This oil is stated to contain 85 to 90% of the HA and balance LAB and is obtained during the course of Alkylation. (4) M/s. TPL had already taken advantage of the classification list already filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Process Reaction with Benzene LAB + HA (By product) LAB (in the overheads) HA+mid boilers (in the bottom) Distillation HA Mid boilers Contains approx 30% of LAB) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f LAB. Even if kerosene is not there, LAB can be prepared from alternative sources which can supply the necessary paraffins. The Encyclopedia of Chemistry on Petrochemical feed stocks submitted by M/s. TNPL along with miscellaneous petition, page 819 reads as follows :- The Kerosene product is now being largely replaced by dodecyl benzene from dodecane obtained by the polymerisation of propylene . Therefore, it is incorrect to say that since Kerosene is used for the generation of Paraffins in the manufacture of LAB, LAB should be treated as a petroleum product. In the miscellaneous petition, the appellants have submitted as under :- Kerosene has an aromatic content of 25%. The entire aromatic content except a small residue is removed in the process of extraction of normal Paraffin and sent back along with the return Kerosene and LAB raffinate . 21.2 He submitted that this has no relevance in determining the classification. He has further submitted that the appellants have enclosed a test report from Anna University on a sample of MOLEX Paraffin feedstock to the effect that the total aromatic content in the MOLEX paraffin feedstock is negligible (0.45%). The purpose of prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturing process of the goods. I find that the appeal was filed 26-12-2001 and came up for the first time on 29-10-2002 on which date the Counsel for the appellants prayed for time to produce expert opinion and the expert opinion given by Professor Head, Department of Chemistry, Anna University, Chennai dated 9-12-2002 was filed in the Court on 12-12-2002, which has been extracted in the order recorded by learned brother on page 19 to 22. 23. The test report of the Anna University clearly indicates that it is a mixture of LAB and HA, HA is more than 75. Further the different statements of various Senior functionaries of the M/s. TPL relied upon in the show cause notice clearly indicate what is LAB and what is HA. Dr. T Elangovan, Head of the Department (R D) who is a Doctorate in Chemistry has stated that after alkylation process (i.e. reaction of Benzene and Olefen) the LAB is separated from the product mixture. As a result, a stream which is a mixture of Alkyl Benzene (LAB HA) is obtained and this stream is used to develop Transformer Oil and Spindle Oil. The Spindle Oil contains upto 15% LAB with balance HA and Transformer Oil contains upto 30% of LAB with balance HA alon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refer to the Affidavit dated 11-12-2002 of Shri D. Senthil Kumar, Head of the Department of LAB plant in M/s. TPL. The affidavit states that Benzene has been used as an input and there is no doubt in it. But the final compound viz. LAB and HA are fully aromatic. The term Aromatic content used in Chapter 27 Note (2) does not mean the percentage of aromatic substance used in the synthesis of a compound. It means the percentage of aromatic substances present in a blend of different compounds. In the instant case, the Transformer oil feed stock is a blend of LAB and HA. The percentage of aromatic content in the blend does not mean the percentage of benzene which has gone into the production. The affidavit, in my opinion, is highly misleading as regards the calculation of the aromatic content in the blend as well as contrary to the facts stated by the responsible and qualified Senior functionaries of the Company and as such the contentions raised in the miscellaneous petition has no scientific basis and are devoid of merits. Therefore, it is an admitted position that the subject products are mixed Alkyl Benzene. 25. As regards the correct classification to be adopted, I find that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstituents exceeds that of the aromatic constituents. The heading does not include oils with a predominance of aromatic constituents obtained by the processing of petroleum or by any other process. These goods will go to heading No. 27.07 (3). The oils described in para (1) (2) above, to which various substances have been added to render them suitable for a particular use provided that the products, contains by weight 70% or more of petroleum oils as basis. For example petroleum spirit containing small quantities of added antiknock product, lubricants, consisting of mixtures of lubricating oils with others products in small quantities for improving the lubricating properties. Since the goods under category (3) above are nothing but oils described in (1) (2) to which various substances have been added to render them suitable for particular use, the inevitable conclusion is that these goods are also predominantly non-aromatic in nature. Therefore, the contention of the appellants vide page 6 of the appeal that petroleum oils or preparations made therefrom will not be governed by the requirements of excess of non-aromatic constituents is not correct and therefore not tenable. All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under residuary entry. Further as held by the adjudicating authority, it is the well settled proposition of law that the condition of the article at the time when it leaves the factory gate is the determining factor for the purpose of classification and its end use is not relevant unless the law requires so as held in the case of Glaxo Laboratories v. UOI reported in 1985 (21) E.L.T. 72 (Bombay) and in the case of Metal Forgings v. UOI reported in 1985 (20) E.L.T. 280 (Del). Further, the Tribunal in the case of Harichand Shri Gopal v. CCE, Meerut reported in 1996 (83) E.L.T. 281 (T), has held that excisability of a product is not dependant on the label which a manufacturer assigns to it. In the instant case, merely because Mixed Alkyl Benzene invoiced as Spindle Oil to meet the customers needs and consigned to manufacturers of Transformer oil does not mean that what was cleared was Spindle oil. Therefore, I find that the lower authority has passed a detailed speaking order and the order reflects application of mind and I do not find any infirmity in the order of the lower authority holding that the products in question are rightly classifiable under Heading 3817 since it includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PROPOSAL AS YOU HAVE SUGGESTED VIDE PARA 4, AS THERE IS NO MUCH DIFFERENCE BETWEEN TRANFORMER OIL SPINDLE OIL. ALSO, WE ARE ALREADY HOLDING THE REGN.CERT. FOR MFG. SPINDLE OIL. AND ALSO, PLEASE ARRANGE TO GET A REVISED P.O. MENTIONING THE PRODUCT NAME AS SPINDLE OIL FROM THE BUYER. REGARDS. Sd/- (S. RAMAMOORTHI) Thus the Records clearly show that M/s. TPL have been clearing the goods under 38.17 and they were prompted by the need of the customers to change the nomenclature of the item as Spindle Oil and they did so clearly with a view to evade payment of duty. They have intentionally changed the nomenclature of the goods and the tariff heading thereto, is established by the above correspondence exchanged between the Senior Officers of the appellants Company. Therefore, mens rea on their part is established by evidence on record. In the background of the evidence as discussed above, the charge against the appellants that they have suppressed the fact from the department is brought home by evidence on record. Therefore, the proviso to Section 11A has been correctly invoked. So far as penalty under Section 11AC is concerned, I find that the Commissioner has taken into cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e view taken by the department was that both the products were mixed alkylbenzenes specifically covered under Heading 38.17 (sub-heading 3817.00) of the Tariff Schedule. This tariff entry attracted a higher rate of duty than the entry 2710.90. Accordingly, a show-cause notice was issued demanding differential duty, proposing penalty etc. That was a detailed notice, which relied on statements of a few senior functionaries of the company, chemical examination report on samples of the products, a relevant circular of the CBEC, provisions of the HSN etc. The notice was hotly contested. In adjudication of the dispute, the Commissioner of Central Excise held both the products to be correctly classifiable under Heading 38.17 and, accordingly, confirmed the demand of duty. The differential duty which had already been paid by the company was appropriated towards the demand so confirmed. The adjudicating authority also imposed a penalty of over Rs. 28 lakhs on the company under Section 11AC of the Central Excise Act and a further penalty of Rs. 5 lakhs on them under Rule 173Q of the Central Excise Rules, 1944. 31. Heard both the sides. 32. I note that the process of manufacture of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sformer Oil Grade II. It is not in dispute that Transformer Oil Gr. I is a mixture containing 15% LAB 85% HA and Transformer Oil Gr. II is a mixture containing 30% LAB 70% HA. Each of these products is obtained by mixing requisite amounts of the overhead material of the recovery column and the bottom material of that column. 33. Ld. counsel for the appellants, assisted by the Company s Executive (Quality Assurance) and Chemical Engineer, has confirmed the above process of manufacture. 34. Ld. counsel for the appellants, now on the classification issue, submits that the classification of the goods should be examined with reference to the starting raw material, which is Kerosene. Kerosene is, admittedly, a mineral oil. It contains 25% of aromatic compounds, which will be comprised in the Heart Cut fraction of kerosene. Upon treatment of this fraction with hydrogen gas, the aromatic compounds get segregated along with non-normal paraffins. This mixture is sent back to the kerosene supplier. The point made by the counsel is that almost the entire aromatic content of kerosene gets removed prior to alkylation. In the Alkylation plant, one of the inputs is Benzene. Insofar as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lassification of goods. In this connection, he has relied on the decision of the Supreme Court in CCE, Shillong v. Wood Craft Products Ltd. [1995 (77) E.L.T. 23 (S.C.)]. His focus is on para 18 of the judgment, wherein the Court held that any dispute relating to tariff classification must, as far as possible, be resolved with reference to the nomenclature indicated by the HSN unless there be an express different intention indicated by the Central Excise Tariff Act, 1985 itself. But I note that there is an express provision (Rule 1 of the Rules for the Interpretation of the Schedule to the Central Excise Tariff Act) which requires that classification of goods should be done in terms of the Headings, Chapter Notes and Section Notes in the Tariff Schedule. Even if one chooses to make a reference to the HSN in the facts of the present case, one would only confirm Heading 38.17 as the specific heading for the subject goods. HSN heading 38.17 and Tariff heading 38.17 are identically worded. The HSN note says that the heading covers mixed alkylbenzenes and mixed alkylnaphthalenes obtained by alkylation of benzene and naphthalene. It is pertinent to note that the method of manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct. In the instant case, only two petroleum products are being mixed in certain proportion and by carrying on certain process thereon, the article called LAB comes into existence. In this view of the matter, the short question is that when admittedly two petroleum products are mixed together and third product comes into existence, would it cease to be a petroleum product? In our opinion, no, even thereafter, it would remain a petroleum product. (Emphasis supplied) Obviously the finding of fact regarding the process of manufacture of LAB, recorded by the Court, was based on a set of admitted facts. It is particularly noteworthy that, in the above case, both the sides agreed that LAB was manufactured by a mere mixing of kerosene and benzene. That is not the case at hand. The appellants themselves have categorically admitted that LAB HA result from a chemical reaction (alkylation of benzene) between benzene and olefins. They have never contended that the LAB/HA mixture is obtained by mixing kerosene and benzene. Moreover, any description of the goods under a different statute like the above Sales Tax Act cannot be any aid to determination of its classification under the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X
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