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TMI Blog2018 (7) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... e For the Appellant Shri S Govindarajan, AC (AR) For the Respondent ORDER Brief facts are that the appellants are engaged in the manufacture of Mosquito Coils falling under Chapter Heading No.3808.10. The Officers of Preventive Unit visited the premises on 31.8.2005 and found that they had cleared 'pre-mix' (a commodity used for the manufacture of mosquito coils) to their sister units s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner (Appeals) confirmed the demand, interest and imposed penalty. Aggrieved by such order, the appellants are now before the Tribunal. 2. On behalf of the appellant, the Ld. Counsel, Shri. D. Santhana Gopalan submitted that the pre-mix powder is merely a mix of natural powders. Mere mixing of two or more essences in certain proportion does not bring into existence any new product; the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not classifiable under Chapter heading 3824. 3. Without prejudice to the above argument, the Ld. Counsel submitted that the entire exercise is revenue neutral. The fact that the pre-mix was stock transferred to their sister unit is not disputed. Such pre-mix is used for manufacture of mosquito coils at their sister unit which are then cleared on payment of duty. Thus if the pre-mix powder is assu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that the intermediate product of Chapter No.38 will also get classifiable under the same chapter provided the intermediate product has the essential character of final product. As per HSN Notes vide page-583, 584 and 581, Chapter Heading 3824 also includes those consisting of mixtures of natural products. Therefore the pre-mix is an intermediate product which has distinct character and is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nirlon Ltd. vs. CCE, Mumbai 2015 (320) E.L.T. 22 (S.C.) has observed that there can be no malafide or intent to evade payment of duty when the entire exercise is revenue neutral. The jurisdictional High Court in the case of Tenneco RC India Pvt. Ltd. (supra) has taken a similar view. The pre-mix powder having been cleared to their sister units, the entire exercise being revenue neutral one, the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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