Customs, Excise and Gold Tribunal - Delhi
S.T.P. Ltd. vs Collector Of C. Ex. on 21 June, 1990
Equivalent citations: 1990(29)ECC157, 1991(51)ELT132(TRI-DEL)
ORDER
G. Sankaran, President
1. By the impugned order, the Collector (Appeals) upheld the Asst. Collector's Order No. l-Val/85 dated 2-5-1985 on the classification under the First Schedule ('CET', for short) to the Central Excises & Salt Act, 1944, of several products manufactured by the appellants.
2. The facts of the case, briefly stated, are that the appellants manufacture several coal tar products. They filed a classification list No. 26/83 effective from 1-3-1983. 23 products were listed therein, grouped under 5 heads -
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Heading Assessee's claim
__________________________________________________________________________________________
(a) Partially distilled tars Item 11(5), CET with duty exemption under
Notification No. 121/62 dated 13-6-1982 and
133/82 dated 22-4-1982.
(b) Blends of pitch with creosote oil Item 11(5), CET with benefit of the above or
other Coal Tar Distillation notifications.
products.
(c) Diesel Oil not elsewhere Item 9, CET with benefit of Notification
specified 147/78 dated 5-7-1978.
(d) Goods not elsewhere specified Item 68, CET with benefit of Notification
85/83 dated 1-3-1983 and 234/82 dated
1-11-1982 (serial No. 20)
(e) Bitumen & Coal Tar Black Item 14II(ii) with benefit of Notification
86/83 dated 1-3-1983.
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3. The dispute before the Assistant Collector covered only 21 products. There was no dispute in respect of the products shown at serial Nos. 19 and 20 of the classification list, namely, Shalijet Sealing Compound and Shalijet Primer.
4. The description of the products now in dispute before us, the results of the analytical test conducted by the Chemical Examiner and the Assistant Collector's order are summarised below :-
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Sl. No. in the Description Gist of the results of chemi- Assistant Collector's order.
Classification of the cal test.
list. product.
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1 2 3 4
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1. Distilled Tar The sample has the charac- Classification under Item
teristics of partially distilled 11(5), as claimed by the as-
coal tar from which some of sessee, is accepted but not
the higher fractions have eligible for the benefit of
been removed. exemption under Notifications
121/62 dated 13-6-1962 and
133/82 dated 22-4-1982 because
the notification covered tar
but not partially distiled tar.
2. Road Tar 3 The sample has the charac- Provisionally approved
teristics of partially distilled under Item 68, CET. The
coal tar from which some of lower authority was
the higher fractions have directed to draw samples
been removed. for test to ascertain con-
formity with IS Specifica-
tion No. 216:1961 for Road
Tar.
Road Tar 2 -do- -do-
3. Soft Pitch The sample is coal tar pitch The claim was for Item
11(5), CET with the benefit
of Notification 121/62 as
amended. The Assistant
Collector classified Soft
Pitch, Soft Medium Pitch,
Hard Medium Pitch and
Hard Pitch (serial Nos. 3 to
6) under Item 68, CET for
the reason that Item 11(5)
includes only blends of
pitch with creosote oil or
with other coal tar distilla-
tion products but does not
include straight run coal tar
pitch.
4. Soft Medium -do- -do-
Pitch
5. Hard Pitch -do- -do-
6. Hard -do- -do-
Medium
Pitch
7. Special The sample is coal tar pitch. Since the IS Specification
Hard Pitch for coal tar pitch did not
cover these grades, they
would fall under Item 68.
Benefit of Notification No.
121/62 denied.
8. Electrode The sample has the charac- -do-
Pitch teristics of coal tar pitch.
9. Pitch The sample is composed of Classified under Item 11(5)
Creosote pitch blended with creosote as claimed but without the
Mixture oil and contains some benefit of Notification
higher coal tar distillation 121/62 since it exempted
fractions. only coal tar which is dif-
ferent from blends of pitch.
10. Tar Seal for -do- Classified under Item 68.
Gas Holder Notification 121/62 not ap-
plicable since the product
was not Tar.
11. Modulate The sample is coal tar pitch. It is neither tar nor blend of
pitch. It is used as base
material for water proofing
products. Classified under
Item 68.
12. Plasticised -do- Classification under Item
Pitch 68 since the product is of
specific nature used for
protection from electrical
resistance and soil.
Notification 121/62 not ap-
plicable.
13. Tar Stil Tar The sample is composed of The Assistant Collector
pitch blended with creosote classified these products
oil containing some lower under Item No. 1411(5)
and higher coal tar distilla- against the assessee's claim
tion fractions. for Item No. 11(5).
14. Tarstil Spe- The sample is composed of -do-
cial pitch, blended with
creosote oil. It contains
some higher coal tar distil-
lation fractions.
15. Shalimastic -do- -do-
L.C.
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(The dispute before us is only in respect of these items, according to the submissions of the Learned Counsel. Arguments were addressed only in respect of these items.)
5. We have heard Shri Gopal Prasad, Consultant, for the appellants and Shri L.C. Chakraborty, Departmental Representative, for the respondent.
6. Shri Gopal Prasad drew our attention to passages from the book "Materials Handbook" by George S. Brady and Henry R. Clauser, 12th Edition. On page 807 it is stated that tar is a black solid mass obtained in the destructive distillation of coal, peat, wood, petroleum, or other organic material. When coal is heated to redness in an enclosed oven, it yields volatile products and the residue coke. Upon cooling the volatile matter, tar and water are deposited, leaving the coal gases free. Various types of coal yield tars of different qualities and quantities. It is further stated that coal tars are usually distilled to remove the light aromatics which are used for making chemicals, and the residue tar, known as treated tar, or pitch, is employed for roofing, road making, and for bituminous paints and waterproofing compounds. Coal-tar pitch is the most stable bituminous material for covering underground pipes.
7. From the above, it may be seen that, as contended by Shri Gopal Prasad, the residue tar, remaining after distillation of coal tar to remove the light aromatics, is known as treated tar or pitch. These two terms are used synonymously and connote one and the same thing. The further contention is that Notification 121/62 dated 13-6-1962, as amended by Notification 133/82 dated 22-4-1982, which exempts tar from excise duty would be applicable to pitch. (This refers to Soft Pitch, Soft Medium Pitch, Hard Pitch, Hard Medium Pitch, Special Hard Pitch and Electrode Pitch - Serial Nos. 3-8). These products, however, do not, according to the Revenue, fall under Item 11(5) which covers only blends of pitch with the specified materials and not straight run pitch which consequentially falls under Item 68, CET. In this connection, Shri L.C. Chakraborty refers us to the Tribunal's decision in the case of Indian Aluminum Co Ltd. v. Collector of Customs, Cochin - 1988 (38) ELT 69 holding that coal tar pitch is not coal tar or partially distilled tar and that, hence, pitch is ineligible for the benefit of Notification No. 121/62. We have perused this decision. The goods in that case were pitch (aluminium grade) and the Customs had charged additional duty of customs under Item No. 68, CET. The importers' claim was for classification under Item No. 11(2), CET with the benefit of Notification No. 121/62 on the basis that the description "partially distilled tar" in Item No. 11(2) covered pitch. [The wording of Item 11(2) as reproduced in para 7 of the decision is the same as that of Item 11(5) in force during the material time]. The Tribunal considered the matter at length and held that coal pitch was an item distinct from coal tar or partially distilled tar.
8. We do not see any reason to deviate from the above-referred to decision. Respectfully following the same, we uphold the classification of items at Serial Nos. 3 to 8 under Item 68, CET. Notification No. 121/62 applies only to tar falling under Item No. 11(5). Therefore, it does not apply to the subject pitches.
9. Re: Items at Serial Nos. 1 and 2
The Learned Consultant submits that Notification 121/62 does not distinguish between tar and partially distilled tar or tar of various types. Though the Learned D.R. supports the orders of the lower authorities denying the benefit of the notification, we do not see any good reason to deny the benefit. The term "Tar" should, in the absence of any contrary indication, covers tars of all types including partially distilled tar. Conformity with I.S.I. Specifications for different types of tars cannot be a determinant, for these specifications are quality control specifications. Any deviation from the specifications would not mean that the products cease to be tars so long as they are known in trade as tars. We, therefore, uphold the appellants' claim for the benefit of Notification No. 121/62 in respect of these products.
10. Re: Pitch Creosote Mixture; and Tar Seal for Gas Holder - Serial Nos. 9 and 10.
These are blends of pitch with creosote oil and contain some higher fractions of coal tar distillation. Though they are covered by Item No. 11(5) CET, they are not covered by Notification No. 121/62 which covers only tar and not blends of pitch with creosote oil or with other coal tar distillation products, as rightly pointed out by the D.R. We do not accept Shri Gopal Prasad's contention that the term "tar" in the notification would cover such products. For one thing, as explained by Shri A.C. Misra, Divisional Manager, Coal Tar Operations of the appellant company before us during the hearing, these are made by adding back heavier fractions of distillation, e.g., creosote oil, to tar fractions to give special properties. In other words, they are not tars as obtained by distillation of coal etc. but tar fractions with some heavier distillation fractions added or "cut-back" to them. For another, while these blends are brought into the tariff items' scope by the inclusive clause, the notification simply refers to tars. It will not be correct to give the term an extended meaning as the Learned Consultant would have us do.
11. Re : Modulate and Plasticised Pitch (Serial Nos. 11 and 12).
For the same reasons as in the case of the products at serial numbers 3 to 8, these products, in our opinion, have been correctly classified under Item 68, CET and the benefit of Notification No. 121/62 correctly denied.
12. Tar Stil Tar; Tarstil Special; Shalimastic L.C. and Jet Set Primer - Serial Nos. 13 To 16.
These are composed of pitch blended with creosote oil containing some lower and/or higher coal tar distillation fractions, as is the case with the products at serial numbers 9 and 10. For the same reasons, these products are classifiable under Item No. 11(5) but without the benefit of Notification No. 121/62.
13. The impugned order is modified to the extent indicated above with consequential relief to the appellants.
S.L. Peeran, Member (J)
14. I have gone through the order prepared by Hon'ble President and agreed to by learned Sister Member Judicial on 9-4-1990. I am unable to persuade myself to agree to his views. I am finalising my views as drafted by me on 28-2-1990 as below.
15. The appellants M/s. Shalimar Tar Products Ltd., Calcutta have sought for setting aside both the order in appeal dated 30-9-1985 passed by C.C.E. (Appeals) Calcutta and also order in original dated 2-5-1985 passed by the A.C.C.E., Dhan-bad.
16. They have sought for classification of 22 items under various tariff items of the C.E.T. Schedule. They had filed classification list No. 26/83 effective from 1-3-1983 in supersession of their list No. Nil dated 31-12-1975 under Rule 173B of Central Excise Rules, 1944 for approval by the proper officer of the Central Excise. They have submitted that 20 out of the 23 items of which they had sought approval, 22 items except Item No 2 in their list were approved. Item No 2 namely Road Tar was provisionally approved by the proper officer.
17. In the revised classification list, the appellants claimed classification of items No. 1 to 16 under T.I. 11(5) ; items Nos. 17 and 18 under T.1.9; Items Nos. 19 to 22 under T.I. 68 and item No. 23 under T.1.14(II) (ii) later on changed to T.I. 11(5).
(a) Partially distilled tars (SI. No. .. Under TI 11(5) with exemption under 1to8) Notification Nos. 121/62 dated 13-6-1962 & 133/82 dated 22-4-1982.
(b) Blends of pitch with creosote oil .. TI 11(5) CET with benefit of the supra or other coal tar distilla- notifications tion products (SI. No. 9 to 16)
(c) Diesel Oil not elsewhere speci- Item 9 CET with benefit under Notifi-
fied (SI. No. 17 & 18) cation 147/78 dated 5-7-1978
(d) Goods not elsewhere speci- .. Item 68 CET with benefit of Notifi-
fied (SI. No. 19, 20, 21,22) cation 85/83 dated 1-3-1983 T& 234/82
dated 1-11-1982 (SI. No. 20)
(e) Bitumen & Coal Tar black .. TI 14II (ii) with benefit of Notifica-
(SI. No. 23) tion 86/83 dated 1-3-1983.
18. They have submitted that show cause notice dated 16-6-1984 was issued by the Assistant Collector of Central Excise Dhanbad seeking their explanation for reclas-sification and approval of their products as noted below "Items No. 1 to 8,10 to 12 and 16 to 22 under T.I. 68; item No. 9 under T.I. 14(II) (5); and Item Nos. 13,14,15 and 23 under T.I. 14.1(5). They filed their objections and after conclusion of the hearing, the Assistant Collector passed the order in original by which he has classified the various items under various headings.
19. The appellants filed an appeal before the Collector of Central Excise (Appeals) Calcutta who by his order in appeal dated 1-3-1983 has also not accepted the appellants' claims. In the present appeal, the appellants have sought for classification of all the items except No. 17,18, 21 and 22 under T.I. 11(5) and have sought for exemp-tion from payment of duty under Notification 121/62 and 75/84 CE. They have also asked for exemption from payment of duty under Notification 121/62 and 75/84 also for the items 1 and 9 as shown in their revised classification list though these are classified under No. 11(5). We have annexed in the schedule below the 16 items in dispute which were subject matter of the classification and respective classification approved by the lower authorities. The appellants have submitted that they have no dispute with regard to the items 17 to 23 in their classification list. They have submitted that there is a dispute with regard to the items 1 to 16 of the CL. They have sought for classification of items 1 to 16 under T.I. 11(5). The Collector in the order-in-appeal has classified these items into A, B, C, D, E as follows :
Items A Partially Distilled Tars 1-8 B Blends of Pitch with Creosote oil or other Coal tar distil- 9-16 lation products.
C Diesel Oil Nos. 17-18
D Goods not elsewhere specified 19-22
E Bitumen & Coal Tar Black 23
The appellants had claimed before the Collector for classification of Items 1 to 16 of the classification list under T.I. 11(5), Item Nos. 17-18 under T.I. 9, Items 19 to 22 under T.I. 68 and Item No. 23 under T.I. 14(11) (ii) later changed to 11(5).
SCHEDULE ________________________________________________________________________________________ SI No. Description of Gist of the results ofchemi- Classifica- Assessee in the the product cal test tion done by claim CL list AC ________________________________________________________________________________________ 1 2 3 4 5 ________________________________________________________________________________________ A. Partially Distilled Tars
1. Distilled tar It contains 20% by Vol. of Till TI 11(5) fractions distilling between 180°c to 305°c. The residual matter left after distillation is pitch like solid melting point 45 c (appx.). The sample has the characteris-
tics of partially distilled coal tar,
2. Road Tar 3 It contains about 20% by Provisionally -do-
Vol of fractions distilling approved
between 180°c to 305°c. The under TI68
residual matter left after
distillation is pitch like solid
melting point 45 c (ap-
prox.). The sample has the
characteristic of partially
distilled coal tar.
Road Tar. 2 -do- -do- -do-
3. Soft Pitch The sample is coal tar pitch -do- -do-
in the form of black
coloured brittle solid
4. Soft medium -do- -do- -do-
pitch
5. Hard pitch is coal tar pitch in the form -do- -do-
of black coloured brittle ir-
regular lumps
6. Hard Medium is coal tar pitch in the form TI68 -do-
Pitch of black coloured brittle
7. Special Hard is coal tar pitch in form of TI68 -do-
Pitch black coloured brittle ir-
regular lumps
8. Electrode pitch Sample has the characteris- TI68 -do-
tic of coal tar pitch
B. Blends of Pitch into Creosote Oil or other Coal Tar Distillation Products ________________________________________________________________________________________
9. Pitch Creosote The sample is composed of 11(5) with- TI 11(5) mixture pitch blended with creosote out benefit oil contains some higher under coal tar distillation fraction Notification 121/62
10. Tar Seal for is composed of pitch TI 68 No -do-
gasholder blended with creosote oil benefit of
contains some higher coal Notification
tar distillation fractions 121/62
11. Modulate The sample is coal tar pitch TI68 -do-
in the form of black
coloured hard pasty mass
12. Plasticised is coal tar pitch in the form TI 68 No -do-
Pitch of black coloured brittle benefit of
solid mass Notification
13. Tar Stil Tar The sample composed of TI 14II (5) -do-
Pitch blended with creosote1
oil contains some lower and
higher coal tar distillation
fraction.
14. Tar Stil special The sample composed of -do- -do-
pitch blended with creosote
oil contains some higher
coal tar distillation frac-
tion
15. Shalimastic LC -do- -do- -do-
16. Jet Set Primer is composed of pitch TI68 -do-
blended with creosote oil
containing some higher and
middle coal tar distillation
fraction
C. Diesel Oil H.C.S
17. Heavy Creosote is a higher fraction of coal (Not in dis- -do-
Oil tar distillation product and pute)
has the characteristic of
creosote oil
18. Light Creosote It is composed of Aromatic (Not in dis- -do-
Oil hydrocarbon having boiling pute)
point higher than Xylene. It
has the characteristic of
light creosote oil coal tar
distilled
19. Shali Jet sealing TI68
compound
20. Shali Jet sealing -do-
primer
21. Disinfectant -do-
fluid
22. Winter Wash -do-
Oil
Bitumen & Coal Tar Black
Shalimastic HD TI 14(II)(ii)
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20. The Assistant Collector had classified the products under dispute by taking into consideration the report of the Chemical Examiner. The report of Chemical Examiner about items 1 to 12 of the classification list, says that the sample is Coal tar pitch; "while the report of Item No. 8 of the classification list, says that the sample has the characteristics of Coal tar pitch. For items 9 & 10 the report says sample contains higher coal tar distillated fraction. For 13 - Sample in the form of a black coloured thick viscous liquid having colour of Coal Tar. For 14 & 15 - sample composed of pitch. Item 16,17 & 18 are described as Coal tar pitch and obtained by blending with creosote oils or other coal tar distillates and therefore, the appellants had sought for classification under Tariff Item No. 11(5) of CET and claimed exemption under Notification No. 121/62.
21. While the Assistant Collector had classified the items under Item 68 instead of Item 11(5) as claimed by the appellants including the exemption of duty under Notification 121/62. Item No. 12 which is plasticised pitch has been classified under T.I. 68 by the Assistant Collector. The Chemical Examiner's Report about this product is that this is nothing but coal tar pitch. The appellants therefore, have sought for classification of this item under T.I. 11(5). The classification of product 'Modulate' which is falling within Sr. No. 11 has been classified under T.I. 68 by the Assistant Collector. The Chemical Examiner's Report states that it is coal tar pitch. Hence the appellants have sought for classification under T.I. 11(5). The product jet set primer in Sr. No. 21 of the classification list has also been classified under TI 68. Basing on the chemical examiner's report which states that the product is composed of pitch blended with creosote oil containing some higher and mild coal tar distillation preparation. Hence they have again sought for classification under TI 11(5).
22. The appellants have submitted that the products Tarstil Tar, Tarstil Spe-cial, Shalimastic LC and Shalimastic HD are anticorrosive waterproofing paint and is known as 'Bituminous and coal tar' and have sought all these items under Item 11(5). They have submitted that the first three products are basically pitch with other coal tar distillation products. These four products have been classified under TI 14(5). The ap-pellants have submitted that products obtained by Coal tar distillation are to be classified under T.I. 11(5). They further submitted that distilled tar, road tar, soft pitch, soft medium pitch, Hard pitch, Soft hard pitch, Electrode pitch, Pitch creosote mixture, Tar Seal for Gas holder, Modulate, Plasticide Pitch, Tarstil Tar, Tarstil Special, Shalimastic LC Jet set primer are to be classified under T.I. 11(5), in view of the word "including" in Item 11(5). They have further submitted that in view of Notification No. 121/62 read with Notification 75/84 these products are exempted from duty. They have disputed the classification of the products Winter wash oil and disinfectant fluid as Pesticides as falling under TI 68. It is their case that these products are entitled for benefit of Notification No. 234/82-C.E., dated 1-11-1982 (Sl. No. 20) as amended. They have also sought for tarstil tar, tarstil Shalimastic HD and Shalimastic LC under TI 11(5) instead of classification made by Asstt. Collr. under TI 14(1) (5) Paint and Emulsion not elsewhere specified.
23. The Collector of Customs has rejected the claim of the appellants that the product distillation tar should get exemption provided under Notfn. 121/62-C.E., dated 13-6-1962 as amended on the ground that it is partially distilled tar whereas the product mentioned in the exemption notification is tar only. He has also held that the products special hard pitch and Electrode pitch manufactured by the appellants are not included in the 1st specification mentioned for Coal tar pitch and hence he has rejected their claim under TI 11(5). He has also rejected the claim of four items of pitches under TI 11(5). The Collector has held that product creosote oil (both heavy and light) is classified under TI 9 as per the Chemical Examiner's Report. He has denied the appellants the benefit of Notfn. 234/82 in respect of disinfected fluid. Thus, the Collector has also rejected the claim of the appellants for classification of the product under TI 11(5) and to grant them the benefit under Notfn. 121/62 dated 13-6-1962 and Notfn. No. 133/82 dated 22-4-1982.
24. Shri Gopal Prasad Consultant appearing for the appellants, submitted that both the authorities have committed serious error in overlooking the claim of the appellants. He submitted that the tar is obtained by distillation of coal and that the various products are obtained from coal tar and they are to be covered under Item 11(5). He has relied upon the definition of Coal tar appearing at page 807 of Materials handbook by George S Brady, Henry R Clauser, Twelfth Edition brought out by McGraw-Hill Book Company.
Tar - A black solid mass obtained in the destructive distillation of coal, peat, wood, petroleum or other organic material. When coal is heated to redness in an enclosed oven, it yields volatile products and the residue coke. Upon cooling the volatile matter, tar and water are deposited leaving the coal gases free. Various types of coal yield tars of different quantities and qualities. Anthracite gives little tar, and cannel coal yields large quantities of low gravity tar. In the manufacture of gas the tar produced from bituminous coal is a viscous black liquid containing 20 to 30% free carbon and is rich in benzene, toluene, nephthalene and other aromatic compounds. In the dry state this tar has a specific gravity of about 1.20. Tar is also produced as a by-product from coke ovens.
Coal tars - are usually distilled to remove the light aromatics which are used for making chemicals and the residue tar, known as treated tar or pitch is employed for roofing, road making and for bituminous paints and waterproofing compounds.
Pine tar - is a by-product in the distillation of pinewood. It is viscous black mass and is much used for roofing. It is also sometimes called pitch but pitch is the tar with the pine tar oil removed known as pine pitch".
He has submitted that as per the above definition pitch is a pine tar which are added back to coal tar. He submitted that pitch are of different specification and are available at different stages of distillation of coal tar. He submitted that the TI 11(5) uses the expression blend of pitch. The impugned products are preparations from pitch. Both pitch and tar are preparations from coal tar and therefore they rightly come within the classification TI 11(5) sought for by them and exempted in terms of Notification No. 121/62 and 75/84 as amended by Notification No. 133/82 dated 22-4-1982.
25. Shri L.C. Chakraborty submitted that the classification has been based on the report of the Chemical Examiner. He further submitted that coal tar and partially distilled tar are different. He further submitted that the items 3 to 8 are items of pitch and the Department was justified in classifying them under TI 68. The Asstt. Collector had rightly classified the product Modulate under TI 68 basing on chemical examiner's report. He further submitted that special pitch were not found in ISI specification hence they were classifying under TI 68 and not TI 11(5) as claimed by the appellants. He submitted that jet set primer is also classifiable based on chemical examiner's report. The items tarstil, tarstil special, shalimastic LC and shalimastic HD are also classified under TI 14(5). He submitted that the product coal tar pitch is in the form of black colour brittle solid mass and from the use and nature of their product as base material for water roofing products, is classifiable under TI 68. He relied upon citation 1988 (38) ELT 69.
26. We have heard both the sides, perused the records. The items under which the products which are to be classified are set out in schedule above, the appellants have submitted that they are manufacturing coal tar products in their factory. The products which are manufactured by them, had been listed by them in the classification list No. 26/83 effective from 1-3-83. The dispute arose when their claim for classification of these products were not granted to them under T.I. 11(5) and subsequent exemption from payment of duty under Notification 121/62 as amended by Notification 133/82 dated 22-4-1982. As noted by us, the lower authorities have classified under TI 14(11) and Item 68.
27. The main question that arises for our consideration in this appeal is whether 16 items in dispute items manufactured by the appellants are classifiable under TI 11(5) and whether they are entitled for exemption under Notification 121/62-C.E., dated 13-6-1962 as amended by Notification No. 133/82 dated 22-4-1982. There does not seem to be any dispute with regard to the items 17 to 23 of their classification list. The items 1 to 16 are in dispute. The items 1 to 16 have been sought for classification under TI 11(5) and the benefit under the said notification.
"The TI 11 reads as follows -
Description of goods Rate of duty
COAL (excluding lignite) and
coke all sorts including Calcined
Petroleum coke, Asphalt, Bitumen
and tar
X X X
(5) Tar distilled from coal or lig- " one hundred rupees per
nite and other mineral tars inclu- metric tonne
ding partially distilled tars and blends
of pitch with creosote oils or with
other coal tar distillation products:
...
The TI 14 reads as follows -
"Pigments, colours, paints, enamels, varnishes, Rate of duty
blacks and cellulose lacquers -
X X ... X
(II) Varnishes and blacks -
(i) Varnishes Fifteen per cent ad valorem
(ii) Bituminous and coal tar blacks Five per cent ad valorem"
Notification No. 121/62-CE dated 13-6-1962 as amended Notification No. 133/82 dated o 22-4-1982 is as under -
"In exercise of the powers conferred by Rule 8(1) of the Central Excise Rules, 1944, the Central Govt. hereby exempts tar falling under item No. 11 of the First Schedule to the CE & ST Act, 1944 (1 of 1944) with effect from the 24th April 1962 from the whole of the excise duty leviable thereon".
28. Now it has to be seen whether these items can be brought under TI 11 wherein the description of the goods also includes tar. TI 11(5) reads "tar distilled from coal or lignite and other mineral tars including distilled tars and blends of pitch with creosote oils or with other coal tar distillation products". We have noted above the definition of tar, coal tar and pine tar appearing at page 807-808 of materials Handbook. From the reading of the definition of the terms given above, it is clear that the products manufactured by the appellants have to be considered as products coming within the ambit of tar and classifiable under TI 11.
29. TI 14 deals with Varnishes, Bituminous and Coal tar blacks. All the products manufactured by the appellants are tar and distillation of tar. TI 11(5) is a specific entry wherein all the products manufactured by the appellants can be included. Therefore, this TI 14 is not appropriate and applicable in respect of these products manufactured by the appellants for the reasons noted above.
30. With regard to the notification, the exemption is for tar falling under TI 11 of the First Schedule to the CE and SA 1944. A plain reading of the notification simply gives the TI 11. The notification does not restrict itself to any sub-item. We have to take the plain meaning of the notification as can be understood from the reading of the notification. We cannot give a different version and presume that any of the items were excluded in the notification. Tar is mentioned in head note of TI 11, it means the entire Item 11(5) being the description of the tar, the products falling under TI 11(5) are also included in TI 11. Therefore, the various items of tar are included within TI 11 and the benefit of the notification has to be plainly given to all items of tar and tar preparation, which includes coal tar, pitch and preparation of pitch.
31. The appellants' submissions that their products are derivates of tar, can be upheld, by also seeing the report of the Chemical Examiner. The Chemical Examiner's report discloses that distilled tar, Road tar, Soft pitch, Soft medium pitch, hard pitch, hard medium pitch, special hard pitch, electrode pitch and items 9 to 16 like pitch creosote mixture, Tarseal for Gas holder, Module, Plasticised pitch, Tarstil tar, Tarstil special, Shalimastic LC, Jet primer have all been described as blends of pitch with creosote oil or other coal tar distillation products. The Report has also suggested that partially distilled tar confirm to item 11(5) of First Schedule of Central Excises and Salt Act, 1944. When this is the position, we are of the considered opinion that these items fall within the category of Item 11(5) of the CET Act and they are entitled for exemption under the said notification.
32. In the case of Indian Aluminium Co. Ltd. v. Collr. of Cus., Madras as reported in 1988 (38) ELT 69 on which the Revenue has placed reliance, it has to be noted that the item involved was pitch (aluminium grade) intended for making electrodes. The Bench was dealing with the question of imposition of duty under the Customs Tariff and countervailing duty. The C.V. duty was charged under TI 68 while the party had sought for assessment under TI 11(2) of CET read with Notfn. No. 121/62-CE. The Deptt. had not taken chemical test of the samples and the evidence of the as-sessee who disbelieved by the Collector (Appeals) later confirmed by Tribunal. The case in reference is clearly distinguishable from the one in hand. In the instant case, the Deptt. had drawn the samples and the test report of the samples is clearly in favour of the appellants. Moreover, in the present case, the evidence of the appellants has not been rejected by the lower authorities. The Bench had observed in the cited ruling at para 15 that "No evidence has been placed before us that from the pitch which is the residuary product of distillation of tar any further distillation product is obtained". The position in the case in hand is a different one. Therefore, the Indian Aluminium Co. Ltd. case (supra) may not apply directly to the entire facts and circumstances of this case and is distinguishable.
The appeal is allowed with consequential relief.
FINAL ORDER OF THE BENCH In the light of the majority opinion, the impugned order is modified to the extent indicated in paragraphs 8 to 12 of this order with consequential relief to the appellants.
Appeal is partially allowed.