9911796707
TMI Blog1985 (2) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by adding 55% water to it, was claimed by Sandoz as eligible for duty exemption in terms of Central Excise Notification No. 101/66 dated 17-6-1966 on the ground that in its manufacture duty paid organic surface agent was being used. This claim was made in Classification List No. 21/79 dated 19-6-1979. It appears that the 1st product is not being cleared as such into the market, but only its diluted version in the form of the 2nd product. By an order dated 31st October, 1980, the Assistant Collector of Central Excise, Thane held that Sandoz was supposed to pay excise duty on the 2nd product when it was cleared for removal and not at the earlier intermediate stage. He ordered that Sandogen NH Liquid be classified under Item No. 15AA C.E.T. without the benefit of the exemption claimed. Being aggrieved with this order, Sandoz filed an appeal before the Appellate Collector of Central Excise, Bombay. It was urged before him that Sandoz NH Conc. was itself an organic surface active agent dutiable under Item 15AA C.E.T. and that by its dilution with water, no new product came into existence and that the said dilution did not amount to manufacture within the meaning of the Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was not marketable. Since the goods were marketed only in the diluted form, the diluted product, as finally cleared from the factory of Sandoz, should bear the burden of duty. In this view, the Central Government issued a notice on 1-10-1981 to Sandoz calling upon them to show cause why the Appellate Collector s order should not be set aside or why such order as deemed fit after consideration of the submissions of Sandoz should not be passed. By a letter dated 5-3-1982, Sandoz denied the allegations contained in the said notice. The aforesaid proceedings initiated by the Central Government were pending as on the date of constitution of this Tribunal and, in terms of Section 35-P(2) of the Central Excises and Salt Act, 1944, they were transferred to it for disposal as if they were an appeal filed before the Tribunal. 2. We have heard Shri N.V. Raghavan Iyer for the Appellant-Collector and Shri R.K. Habbu, Advocate, for Sandoz. We have also perused the records of the case. 3. The salient submissions of the learned Departmental Representative may be summarised thus : (i) Sandogen NH Conc. were not goods in the commercial sense of the term because they were not marketed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only organic surface active agents, but also surface active preparations. A preparation could be the result even of addition of water. (v) Concluding, Shri Raghavan Iyer submitted that if the Bench came to the conclusion that Sandogen NH Conc. was not goods , the impugned order should be reversed. If, on the other hand, it is held to be not goods , the matter might be remanded to the original authority to decide the applicability of exemption Notification No. 101/66 with reference to the conditions set out therein. 4. The submissions of the learned Counsel for Sandoz may be summarised thus : (i) Classification lists similar to No. 21/79 dated 19-6-1979 were being filed for several years by Sandoz and they were paying duty on Sandogen NH Conc. under Item 15AA C.E.T. All this time, Sandoz was not required to pay duty on the diluted product Sandogen NH liquid/dermagen PR liquid by virtue of Notification No. 101/66. The Collector of Central Excise, Bombay had issued a Trade Notice No. 151 (M.P.)/Surface active agents (2)/1966 dated 27-9-1966 on the subject of surface active agents and surface active preparations. The notice clarified the question whether a composite unit man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court decision in 1980 E.L.T. 696 applied squarely to the facts of the present case. In that case, as well as this case, the process was conversion of the solid form into liquid form by addition of solvent. (vii) The show cause notice did not disclose any evidence on the point of marketability or otherwise of the concentrated product. The reviewing authority could not set up a new case different from what was before the lower authorities. 5. We have carefully considered the submissions of both sides. From the above classification list dated 28-5-1973 produced before us by the Counsel for Sandoz, it is clear that Sandogen NH Conc. was being marketed by Sandoz. The notation on the classification list reads thus : Since we have to sell the product urgently, we are clearing on payment of duty at 10% ad valorem. In case the item is found non-excisable, the duty paid may kindly be refunded to us. It also bears a notation manufactured for the first time . The fact that no invoices have been produced evidencing sale of the goods, as Shri Raghavan Iyer has pointed out, would not, in our view, take away from the evidentiary value of the approved classification list as to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reparation prepared for an industrial process connected with textile industry. 7. Notification No. 101/66 says against the aforesaid Serial No. that the goods covered by the Serial No. would be exempt from whole of the excise duty leviable thereon if the goods are made out of duty-paid surface active agents or surface active preparations. In the present case, we have found that Sandogen NH Conc. is a product excisable and dutiable under Item No. 15AA C.E.T. The preparation made out of the duty paid concentrated product would be eligible for the benefit of exemption. 8. The claim of Sandoz that the process of conversion of Sandogen NH Conc. into Sandogen NH Liquid is not manufacture from the excise point of view, is inconsistent with and contradictory to its claim for the benefit of duty exemption in terms of Serial No. 4 of Notification No. 101/66. However, we do not consider it necessary to go into this aspect further in view of our finding that, firstly, Sandogen NH Conc. is excisable and dutiable under Item No. 15AA C.E.T. and, secondly, that Sandogen NH Liquid is eligible for duty exemption in terms of Serial No. 4 of Notification No. 101/66. 9. In the result, we set ..... X X X X Extracts X X X X X X X X Extracts X X X X
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