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TMI Blog2018 (6) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... or trading goods namely Axxanol 77C, Axxanol 33C and Axxanol 33. They were carrying out their trading activity within the manufacturing premises itself. The appellant was importing Axxanol 33C which is classifiable under heading 38119000 under Customs Tariff Act, 1985. It appeared that appellants produce the products namely Axxanol 33CD and Axxanol 33 by reducing concentration of Axxanol 33C using locally purchased lab ethanol; that the resultant products are classifiable under Chapter Heading 38112900 of Central Excise Tariff Act, 1985. 1.1 While the assessee imported the Axxanol 33C in 208 litres drums, the product Axxanol 33CD made out of Axxanol 33C was marketed in 35 litres/208 litres drums, and sold under a separate set of trading inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rits on the ground of limitation. The appellants imported Axxanol 33 C which is a rust preventive Oil concentrate from USA. This concentrate is diluted with addition of ethanol and spirit and after dilution, the goods are sold to local industries. Axxanol 33C is marketed in 208 Litres drums and Axxanol 33 CD made out of the above product was marketed in 35 Litres/208 Litres drums. The appellants had on some times cleared the concentrate as such; that even after dilution and addition of ethanol and mineral spirit, the use and character of the product remain the same hence the appellants were under bonafide belief and understanding that they were merely trading goods and not connected in any activity of manufacture. The trading invoices clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. A.R Shri S. Govindarajan supports the impugned order. He submits that the imported goods can never be marketed as such and need not only certain further processes but also suitable packing to market to industrial consumers. Hence the process undertaken by the assessee definitely amounts to "manufacture" so as to render the product as marketable to consumers. 5. Heard both sides and have gone through the facts of the case. 6. The issue that comes for decision is whether the process of diluting imported Rust Preventive Oil AXX33C in 208 litres drums, diluting the same in concentrations of 1:9, 1:24, 1:49 would fall within the ambit of Chapter Note 9 to Chapter 38 of the First Schedule of the CETA, 1985 and hence liable to payment of Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treatment to render the product marketable to the consumer, shall amount to 'manufacture'." From a comparison of these chapter notes, it becomes evident that Chapter Note 8, which is only for products of Heading 3808, addition of chemicals and other ingredients like inert carriers or solvents etc. would render the process as amounting to „manufacture‟. On the other hand, Chapter Note 9, which covers all other products of Chapter 38, such processes of dilution etc. are not brought within the scope of "deemed manufacture". Thus dilution of the impugned product in a solvent, in this case by addition of mineral spirit/ethanol, by itself will not render the process thereof as amounting to manufacture for the purposes of Chapter Note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he scope of product "manufactured" by the appellant. It is also to be noted that the imported Axxanol came in 208 litres drums and the diluted Axxanol also was sold in cans/drums either of 208 litres or 35 litres, depending on the requirement of the consumer. In any case, as found by the adjudicating authority himself, the consumers of the appellants were industrial consumers only and hence the packing, either in the same quantity of 208 litres as was imported or even in the 35 litres cans/drums can only be termed "industrial packing / bulk pack" and not as a retail pack. In the circumstances, we are not able to agree with the findings and conclusions of the adjudicating authority that "if a product kept in bulk pack, which is not meant for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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