Customs, Excise and Gold Tribunal - Tamil Nadu
Anglo French Textiles vs Commissioner Of C. Ex. on 11 March, 1999
Equivalent citations: 1999ECR210(TRI.-CHENNAI), 1999(113)ELT82(TRI-CHENNAI)
ORDER S.L. Peeran, Member (J)
1. This appeal arises from Order-in-Appeal No. 47/91(TRY), dated 26-8-1991 holding that 'Mineral Khaki Dye Liquor' is manufactured by the appellants in their factory and their goods require to be classified under sub-heading 3206.90 and as a result the demands raised by show cause notice dated 1-12-1989 for the period 1-6-1989 to 30-11-1989 and by show cause notice dated 10-5-1990 for the period 1-12-1989 to 30-4-1990 have been confirmed.
2. Shri P. Karunakaran, Administrator Officer along with Shri C. Durairaj, Manager (Excise) appeared for the appellants and contend that the appellants had taken their contention that the said item is not 'goods' as they are not marketable and not in stable condition. It is stated that said contention taken-up by them was considered by the Tribunal in the proceedings initiated for the earlier period and the Tribunal by its Order No. 756/98, dated 27-3-1998 was pleaded to upheld their contention and allowed the appeal. He submits that as the matter is totally covered, therefore the appeal is required to be allowed.
3. Heard ld. D.R.
4. On careful consideration of the submissions, we notice that appellant's contention pertaining to the item being not marketable and not goods was considered in their case in the above cited order and the Tribunal recorded the findings in paras 6 and 7 is hereunder :-
"6. On a careful consideration of the submissions, I find that the appellants have made out a point on the ground of manufacture and that the item cannot be considered as goods. The burden of proof to show that the item is dutiable and classifiable is on the revenue. This has to be discharged in terms of market survey and expert opinion to prove the point that such mixing brings a change and the change resulted in production of new goods. In the present case, the department has not proved that the item is marketable. In the written submissions and the write-up, the appellant has specifically urged that they purchase from open market Sodium Bichromate, Sulphuric Acid, Mollasses and Ferrous Sulphate, after payment of Excise Duty leviable under different chapters. It was stated that the Sodium Bichromate Sulphuric Acid and Molasses are added together, they get basic Chromium Sulphate. Ferrous Sulphate and Water are added with Basic Chromium Sulphate and utilised in the processing department of their Mill. They had urged that they are/not manufacturing or producing any such goods intended for marketing and that the said substance is not sold in the open market as process of two or more formulated standardised and prepared forms or prepared due forms undertaken in the preparation of due bath for dyeing or printing purposes. It has been urged that mixtures are not susceptible of preservation. Such mixtures are not marketable as it is likely to deteriorate when it is kept for more than a week's time. The processors use only a mixture of inorganic metal salts totally free of any Synthetic organic material. This particular plea has not been considered by the Additional Collector. It is a fundamental principle in the Excise Law that the department has to discharge the burden with regard to marketability and also with regard to mixture being considered in the Trade. Such an exercise has not been done nor the Revenue has relied on chemical report or expert opinion in this regard. We also notice that the department has issued Trade Notice to clarify in some cases that such preparation do not bring into existence to goods. Further it is also seen Collector by Order No. 1/89, dated 24-5-1989 has dropped the proceedings by applying Notification No. 18/89, dated 6-4-1989, which has been issued Under Section 11C of the Central Excises and Salt Act, 1944. Be that as it may, even for classification under Chapter 32, the item has to satisfy the description under the heading under which it is required to be classified. As for example as "Tanning Extract" under Chapter sub-heading 32.01 or "organic synthetic" under 32.02 or "colouring matter of vegetable or animal origin" under 32.03 or "synthetic organic colouring matter" under 32.04 or as "colour lakes" under 32.05 or "other colouring matters; preparations as specified in Note 2 to this Chapter, other than those of Heading Nos. 32.03, 32.04 or 32.05" inorganic products of a kind used as luminophores, whether or not chemically defined. The Revenue is required to satisfy that the item has thus indeed satisfied all the ingredients and characteristic of sub-heading in this case, no such exercise has been done by the Revenue to show that it satisfies the criteria laid down under the Chapter Note. In the case of jyoti Laboratories v. Collector of Central Excise, Cochin, 1994 (72) E.L.T. 669 (T) wherein it is held that Synthetic Organic Dye 'Ujala' a physical mixture of already standardised, formulated and prepared ingredients, namely acid violet dye (98.5%), Ranipal (1.16%) and ultramarine blue (0.34%), dissolved in boiling water not a new product attracting subheading 3204.90 of Central Excise Tariff Act, 1985. In this regard, the Tribunal has also noted various judgments in support of the appellants case particularly in the case of Bush Boake Allen (India) Pvt. Ltd. v. Collector of Central Excise vide Order No. 1246/90-C, dated 13-11-1990 and that of C.C.E. v. Mallaya Fine Chemicals Pvt. Ltd. vide Order No. 1245/90-C, dated 13-11-1990, a similar view has been taken into consideration by the Tribunal to hold that the product 'Ujala' cannot be under Chapter 3204.90 of the C.E.T. as claimed by the department. Therefore, under the facts and circumstances of this case merely to hold that the product has come into existence on mixture being utilised captively without proper evidence, cannot be accepted.
7. Further it is noticed that the appellants had been declaring about their product and also about their manufacturing activity. The department was well aware of the same and therefore, it cannot be urged that there are suppression of facts leading to invocation of larger period. It is also noted that there is no cause shown for imposition of penalty in the result, the impugned order is set aside and appeal is allowed."
5. On consideration of the above findings, we notice that same is totally applicable to the facts of the present case. Respectfully following the ratio thereof, the impugned order is set aside and the appeal allowed.