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TMI Blog1983 (9) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 7-9-1970, the appellants were called upon to show cause why excise duty to the tune of ₹ 4,66,294.57 should not be demanded from them, for the period 1965 to 31-5-1970, in terms of Rule 10A of the Central Excise Rules (hereinafter referred to as the Rules). In reply, the appellants relied upon 2 letters to them from the Department advising that the Chemical Examiner, Madras had, on test, found that the two products were alkyd resins. They also referred to the fact that on this basis, the Department had permitted clearance of the 2 products during the entire period as alkyd resins, exempted from excise duty. It was contended that, in the circumstances, the Department was estopped from making the demand. They also contested the correctness of the Chemical Examiner s revised opinion that the 2 products were not alkyd resins but polyester resin, on the basis of which the demand had been made. They also contended that, if at all, Rule 10 and not Rule 10A applied to the facts of the case. The Asstt. Collector, after holding adjudication proceedings, held that on the basis of the Chemical Examiner s opinion and the end-use of the two products, they were unsaturated polyester res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 966) to polyester resin and that, in any event, the Department would be estopped from pressing the revised classification for any period prior to the issue of the show cause notice. 9. The appeal was heard on 2-9-1983. Shri Ramasubramaniam, the learned Counsel for the appellants, drew our attention to Notification No. 156/65, dated 23-9-1965 which was in force during the material time. This exempted alkyd resin from excise duty. There was no explanation or definition of the expression alkyd resin . In contrast, Notification No. 122/71, dated 1-6-1971 contained an explanation of the said expression in the following terms :- Explanation. - For the purposes of this Notification :- (i) the expression alkyd resins means synthetic resins manufactured by the inter-action of polybasic acids and/or anhydrides (excluding maleic acid/anhydride and fumeric acid except when used to the extent not exceeding two per cent calculated on the quantity of main polybasic acid/anhydride ingredient e.g. phthalic anhydride in the resins to reduce cooking time and improve the colour of the resin) polyhydric alcohols and mono basic fatty acids and includes chemically modified alkyd resins and l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Chemical Examiner himself on 22-5-1970. He has said : It is worthwhile to mention that technologically the line of demarcation between Polyester resins and Alkyds is not sharp . The Condensed Chemical Dictionary (10t edition) (HAWLEY p. 833) describes Polylite as a trade mark (of Reichhold Chemicals, Inc., N.Y.) for a group of 100% reactive alkyd resins dissolved in styrene and other monomers (emphasis supplied). Encyclopaedia of Chemical Technology Volume 1 (page 517) by Kirk Othmer describes the following classes of alkyd resins :- Phthalic alkyd resins; Maleic alkyd resins; Miscellaneous class. It goes on to say that an exception to the above classification has been made in the case of new casting and low pressure laminating resins. These resins include the unsaturated polyester alkyds and copolymers of vinyl and maleyl compounds. Certain physical and chemical properties and their method of application distinguish them from all the other types of alkyds products described so that it is most convenient to treat them as a separate group , (page 518) (Emphasis supplied). Again, two new groups of resins were developed during World War II that have already assumed mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Type . The earlier reports were on the basis of party s declaration on the T.Ms. and the absence of the precise information of the composition of the products under reference. Further it is worthwhile to mention that technogically the line of demarcation between Polyester Resins and Alkyds is not sharp . x x x x As the majority of the Technical references describe `Polylite as Polyester synthetic resin and more especially as printed write-up of manufacturers also mention `Polylite as Polyester Synthetic resin, the sample of `Polylite 8001 , resin would merit to be considered as Polyester resin. The earlier reports on the samples of Polylite 8001 and Polylite 93-410 drawn from M/s. Reichhold Chemicals Ltd., Madras, may therefore be amended to read as Synthetic resins of Polyester Type . The manufacturers however have declared the products Polylite 8001 and Polylite 93-410 as Alkyd on the respective test memos. 14. It may be seen that the Chemical Examiner s report does not contain any reason to show that the appellants products polyester resins were not alkyd resins. We have already seen that polyester resins are, in technical parlance co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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