Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs Navdeep Chemicals (P) Ltd. on 1 July, 1988
Equivalent citations: 1988(18)ECR322(TRI.-DELHI), 1988(37)ELT62(TRI-DEL)
ORDER
P.C. Jain, Member, (T)
1. Brief facts so far as material to the decision of this case are as follows :-
The respondent company manufactures a product 'Navdiflx' which had been classified under Tariff Item 68. Later on a sample was drawn In 1981. Test result of this sample was communicated to the respondent company. Thereafter the respondent company herein came up with a plea that their product was liable to be assessed under Tariff Item 15AA as organic surface active agents (OSAA), organic surface active preparations etc. and would be entitled to an exemption vide Notification 208/69, dated 27-8-1968. A sample has, therefore, again drawn. The Chemical Examiner by his report dated 9-7-1982 informed that the sample Is in the form of colourless liquid and It is an aqueous preparation containing an organic compound formaldehyde and ammonium chloride. It does not possess any functional property of OSAA laid down In para 3 of Board's letter F.No. 94/1/81-CX.3 (TA 20/82), dated 21-4-1982. The claim for exemption was on the ground that surface tension value of liquid contained by treating one gram of OSAA or surface active preparations as the case may be with 100 ml. of distilled water from that of the latter Is not more than 20 dynes per centimetre at the same temperature.
On 8-10-1983 the respondent company herein represented that Amlgen Is treated as OSAA under Tariff Item 15AA as per Board's letter No. 24/26/68-CX.3, dated 23-11-1988. Accordingly, their product 'Navdiftx' which Is like 'amlgen' would also be classified under the said Tariff Item.
On the aforesaid representation a fresh sample was drawn and submitted for chemical test under test memo No. 69/83. The respondent company had also submitted a test result carried out by Italab Pvt Ltd., Bombay which was also forwarded to the Chemical Examiner alongwlth the aforesaid sample. The sample of Navdlflx was further tested by the chemical examiner and the rest result obtained on the sample under reference confirmed the findings as reported earlier vide chemical examiner's report dated 9-7-1982 mentioned supra.
Since the respondent company was dis-satisfied with the aforesaid findings of the chemical examiner, Baroda, the sample was sent to the Chief Chemist, New Delhi who communicated the test result under a letter dated 25-7-1984 as follows :-
'The sample is in the form of free flowing colourless liquid. It Is an acqueous solution of amine resin, an artificial resin. It does not have surface active properties."
On the basis of test results and after granting the respondent company a personal hearing the adjudicating authority classified the product 'Navdifix' under Tariff Item 15A(I) of CET.
On appeal before the Collector of Central Excise (Appeals), New Delhi, the respondent company herein got the aforesaid adjudication order set aside on the ground that 'the report of the Chief Chemist which apparently has led to the determination of the classification of the Items is not very explicit and as the contention of the appellants in respect of the product is supported by the reports from other two laboratories, reportedly equipped with the modem facilities for testing textile chemicals into which category the impugned item belongs, I feel that this would merit re-examination". The Impugned order directed that the item should be got tested from an independent body like the University Department of Technology, Bombay, who would be having the necessary know-how and the equipment for testing the Item. On the basis of such a report, the Assistant Collector would take a decision on the question of classification.
2. The Collector of Central Excise, Vadodara, the appellant herein, has fled appeal against the aforesaid impugned order of the Collector of Central Excise (Appeals), New Delhi (at Bombay). Apart from, contesting the merits of the question involved herein, the appellant-Collector has also stated that It Is not appropriate to say that the departmental laboratories situated at Baroda and New Delhi are not well equipped as has been said by the Collector (Appeals).
. Learned SDR appearing for the department has urged that the finding of the Collector (Appeals) would have very far reaching repercussions If the test results obtained in the departmental laboratories are not accepted in the absence of any specific allegation of bias and prejudice. The allegation made herein is that the report of the departmental laboratories is not explicit, is vague and does not give the various parameters of the properties which a surface active agent or a preparation is required to have. Learned SDR has stated that these allegations are not correct inasmuch as the report Is very specific that none of the six properties referred to in the Board's letter, namely :-
(I) Solubility (II) Amphipethic structure
(iii) Orientation at interfaces
(iv) Absorption at interfaces
(v) Micelle formation
(vi) Functional properties such as detergency, foaming wetting, emulsifying, soiubilising, dispersing.
are available in respect of the respondent company's products. In view of this dear report of the chemical examiner and the Chief Chemist there was no ground for the Collector (Appeals) to hold that the reports of the departmental laboratories are not explicit.
3. Learned advocate appearing for the respondent company has urged that the test results of the departmental laboratories as communicated do not give parameters of the product tested In any specific terms. All the reports are of stereo-type nature and repeat that they do not fulfil any of the properties of surface active agents or surface active preparation as stated in the Board's letter dated 21-4-1982. By way of comments on the appeal and the grounds mentioned therein the respondent company has urged that it was for the first time after testing of the sample by the Chief Chemist that they were informed about the product being "an acqueous solution of amine resin an artificial resin". The report is lacking about the molecular weight of the compound and the degree of polymerisation. In the absence of any of these parameters It cannot be categorically stated that the product could merit to be classified under Tariff Item 15A(i). Learned advocate for the respondent company has strongly urged that the impugned order is correct In law and based on fair play and justice. The matter is required In terms of the Impugned order to be re-examined so far as the question of classification of the product is concerned.
4. We have carefully considered the pleas advanced on both sides. We agree with the learned SDR that in the absence of any specific allegation regarding non-availability of a particular equipment with the departmental laboratories which vitiates the test report of those laboratories or in the absence of any specific allegations of bias or prejudice, it will not be appropriate to say by way of general remarks that the report of the departmental laboratories is not correct. If this is permitted to be done, every assessee against whom the departmental report Is not favourable would like the sample to be tested by another 'Independent' laboratory. After the report of the Chief Chemist was communicated to the respondent company, and If they were dls-satisfled with the report they could, if they so desired request to cross-examine the Chief Chemist about the manner of testing, the equipment for testing and other technical aspects. The points regarding molecular weight and degree of polymerisation do not appear to have been raised before the adjudicating authority during the course of hearing. The respondent company cannot be allowed to make a grievance on these counts at this stage, even when the test result as found by the Chief Chemist was reported to the respondent company. As regards the properties of a surface active agent or surface active preparation, we do not consider that the report of the departmental laboratories is non-explicit or vague. The reports very clearly spell out that none of the properties mentioned supra of the products falling under Tariff Item 15AA are available for the product under consideration. In view of this dear finding, we do not see as to what purpose would have been served about the percentage of various properties so much emphasised by the learned advocate for the respondent company. Percentages are required to be given In the course of a test result where they are necessary for the purpose of classification of a product under the Central Excise Tariff. Tests undertaken at the departmental laboratories are with reference to the strict needs for classification under the Tariff. These tests are not required to be taken for giving a complete structure of a product and its various properties without reference to the Tariff.
5. In view of the foregoing discussion, we find merit in the appeal of the Collector of Central Excise, Vadodara that there is no justification for setting aside the order-in-original on the ground that the reports of the departmental laboratories are vague or non-explicit and that the same required to be tested by an 'independent' body. Accordingly, we set aside the impugned order and allow the appeal.