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TMI Blog2005 (11) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... various grades of Activated Bleaching Earths viz. Rice Bran Oil, for Cotton Seed Oil, SF, SC-100, SC-60 RB/SPECIAL 999, etc. for the purpose of decoloursation. The Commissioner (Appeals) has noted that de-colourising agent has to have strong adsorption properties in case of Cotton Seed Oil than that of Soya oil for decolorising them. He has noted that this process carried out by the assessee is a process of manufacture and the product, in view of the changes brought out by several processes carried out by the assessee, would go out of Chapter 25 and in the end it would be classifiable under CH 38.02 as Activated Bleaching Earth. The Com missioner (Appeals) has relied on the HSN Notes and also the material evidence in the matter. 3. The learned Counsel submits that there is no process of manufacture. The item remains as such even after the processes carried out by them and it has to be classified only under CH 25.02. He submits that the Tribunal ruling, holding similar activity as a process of manufacture and that it goes out of Chapter 25 and gets classified under Chapter 38.02 as rendered in the case of Manek Chemicals Pvt. Ltd. v. CCE, Ahmedabad - 2002 (145) E.L.T. 335 (Tri.-De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arth are heated and subjected to chemical treatment, then Alumina, Iron Calcium oxide and Magnesium Oxide, will be converted into Sulphates rd superficial changes also occur after such chemical treatment. The findings recorded in paras 5 to 12 of the Tribunal's ruling in the case of Manek Chemicals Ltd. (supra) are extracted herein below:- "5. We have examined the rival submissions and arguments. The appellants have a grievance that their "final" submissions of 29-12-2000 were not considered by the adjudicating authority. We will be considering them in the appropriate context. The first question to be considered is regarding the classification of the product. The process of manufacture of the product, stated by the appellants in the memorandum of appeal, is as under "Fine clay powder (bentonite) is purchased from the open market and the same is mixed with hydrochloric acid (HCI) or sulphuric acid (H2SO4). The clay is then stirred at higher speed in mixer tanks, wherein steam is also applied to accelerate the process. As a result of such stirring, slurry is obtained, which is passed through filter press for filtering. As a result of this process, wet cake is obtained, which is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product would be called activated clay. The HSN Notes further say that, when the activation of clay is done by treatment with acid, as in the appellants' case, the product is mainly used for decolourising animal/vegetable/mineral oils, fats or waxes. It is pertinent to note in this context that the product cleared by the appellants during the material period was meant to be used for decolourising vegetable/mineral oils, fats, waxes etc. 6. In view of the appellants' declaration that their product was activated earth and in view of the unquestionable scientific fact (as adopted into the HSN and there from into our Tariff) that activation is the effect of modification/change of superficial structure, the statement dated 23-11-98 given by Shri D.V. Patel disowning his earlier statement dated 19-11-98 that there was partial change of structure of clay in the process of manufacture appears to be bereft of bona fides, and so does his "final" submission made to the Commissioner in letter dated 29-12-2000 which was also in the nature of retracting the statement of 19-11-98. It is Shri D.V. Patel's statement dated 19-11-98 that is found to be consistent with the description 'activated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Since activated natural mineral products like activated clay have been specified under CET Heading No. 38.02, they cannot fall under CET Heading 25.05. The appellants have claimed the classification under CET Heading 25.05 on the strength of Chapter Note 2 of Chapter 25 which reads as under:- "2. Except where their context otherwise requires, heading Nos. 25.01, 25.03 and 25.05 cover only products which have been washed (even with chemical substances, eliminating the impurities without changing the structure of the product), crushed, ground, powdered, levigated, sifted, screened, or concentrated by flotation, magnetic separation or other mechanical or physical processes (except crystallisation), but not products that have been roasted, calcined, obtained by mixing or subjected to processing beyond that mentioned in each heading or sub-heading." The above Note says that Headings 25.05 etc. cover only those products which have been washed, crushed, ground, powdered, etc. The Note, how ever, lays down an exception, i.e., where the washing is done with chemical substances (like the acid used by the present appellants) for eliminating impurities and where it is accompanied by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payment of duty. M/s. MCPL had, of course, claimed classification of their product under CET Heading 25.05, which entry carried 'nil' rate of duty. But that was a mere claim and not a case of misclassification, for it was the department's job to classify the goods and only the proper officer of the department could classify or misclassify the goods. To state that claiming classification of excisable goods under a particular Tariff entry for avoidance of duty is a case of mis- classifying the goods for evasion of duty will itself be a gross misstatement. Further, the fact remains that the department did not object to M/s. MCPL's claim for classifying their product under Heading 25.05 at any point of time during the material period. Therefore the allegation of mis classification against M/s. MCPL would not hold ground. When M/s. MCPL declared their product as "activated earth", they were aware of the classifiability of the product as "activated natural mineral product" under CET Heading 38.02. The department was also equally aware of the fact. Where both the assessee and the department were aware of the material facts, it cannot be held that there was suppression of facts by the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise, once the confiscation is set aside, the penalty under Rule 209A, which is dependent on the confiscabilily of the goods, will also have to be vacated. 12. In the result, Appeal No. 809/2001 is allowed and Appeal No. 808/2001 is partly allowed as under:- (a) M/s, MCPL's product, cleared under the trade name "Bleach-9" during 1995-96 to 17-11-98, is classifiable as activated natural mineral product under CET Heading 38.02 and chargeable to duty accordingly. (b) The demand of duty on the above product cleared during the period beyond the normal period of six months preceding the date of the show cause notice is barred by limitation. The Commissioner is directed to work out the duty for the said normal period and recover the same from M/s. MCPL in accordance with law. (c) The confiscation of the seized goods is set aside and consequently the redemption fine stands vacated. (d) The penalties imposed on M/s. MCPL are set aside." 6. In terms of the above findings, the facts are identical in the present case. By applying the ratio thereto, we find no merit in this appeal and reject the same. E/100/2000: 7. In this appeal, the commissioner (Appeals), in OIA No. 648/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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