Customs, Excise and Gold Tribunal - Mumbai
Alchemie Pvt. Ltd. vs Commissioner Of Central Excise on 25 August, 1999
Equivalent citations: 2000(117)ELT745(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. Two common questions are involved in these four appeals, two by the assessee and two by its directors. The first is whether by concentrating spent liquor/wash containing 4 to 6% caustic soda, obtained in concentration of 16-18% and removing impurities, a new product liable to excise duty emerges. The second is whether sodium hypochlorite manufactured by the assessee was exempted from duty by Notification 31/89 of 1st March, 1989.
2. On the first question, the adovate for the appellant invites our attention to the decision of the Tribunal in CCE v. Bakul Aromatics & Chemicals Ltd., 1989 (43) E.L.T. 758. In this decision, the Tribunal held that a process of concentration of formic acid from 65% to 85% in removing excess water did not amount to manufacture. It said that by such concentration, a commodity commercially differently known, or had any function, or character and use and name did not emerge. The ratio of this decision has been made applicable to purification of acetic acid in the Tribunal S.D. Fine Chem Pvt. Ltd. v. C.C.E., 1997 (91) E.L.T. 610. We do not see why the ratio of this decision does not apply to the facts of the case before us. It is not the department's case that concentrating the liquor from 4% to 15% results in the emergence of a new commercially distinctly identifiable commodity. In the two orders-in-appeal passed by two different Commissioners, the reason advanced is that the goods are marketable. The fact of the goods being marketable by itself not justify the conclusion that they are the result of manufacture. In the two cases we have referred to formic acid of the lower concentration and the acetic acid of the lesser degree have not been found not to be marketable. There is therefore, insufficient basis to conclude that the goods in question are the result of manufacture as it has been defined by the courts, that they are so different from spent liquor that a new different commodity can be said to have come into existence. Apart from removal of cotton fluff and other impurities the resultant product has the same characteristic except for the concentrate as its old one. Nor is it possible to say that the change in the concentrate itself results in the emergence of a new product.
3. On the other issue, the decision of this Tribunal in C.C.E. v. Century Textile and Industries Ltd., 1991 (53) E.L.T. 421, C.C.E., Chandigarh v. Punjab Alkali, 1997 (19) RLT133 are cited by the appellant. In the first decision, the Tribunal had held, after referring to technical literature, that bleach liquor included sodium hypochlorite is entitled to benefit of Notification 195/86 which exempts bleach liquor. The Notification 4/94 with which we are concerned also exempts bleach liquor completely. The ratio of this decision, which has been confirmed by the appeal against that decision in the Supreme Court being dismissed has been applied to the goods in the matter before the Tribunal in the second decision. The departmental representative relies upon the order impugned in the appeal. The order merely says more or less that the product is not eligible to the exemption without indicating any reason therein.
4. On merits it will have to be held that the appellant succeeds with regard to both these issues. In addition, the notice for duty in Appeal E/284/98 is entirely barred by limitation. Notice invoking the extended period contained in the proviso to Section 11A of the Act. The department was however, fully aware that appellant manufactured bleach liquor and was clearing it without payment of duty. The assessee would have brought to the notice of the department its manufacture of this commodity and on payment of duty under the notification by the declaration, which it filed from time to time.
5. In addition, demand for interest in both the matters under Section 11A and penalty under Section 11AC in Appeal No. E/3865/98 would not be maintainable, in view of the fact that the notices were issued long before these two sections were enacted. Penalty upon the assessee and its Director in any case not being imposable in view of our finding on the demand for duty.
6. Accordingly, all the four appeals are allowed. Impugned order set aside. Consequential relief.