Customs, Excise and Gold Tribunal - Delhi
Union Carbide India Limited vs Collector Of Customs on 30 October, 1985
Equivalent citations: 1986(6)ECR157(TRI.-DELHI), 1986(24)ELT325(TRI-DEL)
ORDER
S. Venkatesan, Sr. Vice-President
1. These 9 appeals relate to the same appellants, namely, M/s. Union Carbide India Ltd., Bombay. They relate to the importation of four different products. The issues involved and the arguments advanced are, however, common and therefore they were taken up together.
2. The appeals relate to the levy of additional duty of customs (commonly referred to as "countervailing duty" or "c.v.d.") on 9 consignments of goods imported by the applicants. Two of the consignments consisted of chemicals known as "DISTEARYL THIODIPROPIONATE" or "DSTDP". Two other consignments consisted of a chemical known as "Anti-Oxidant T.B.M.-6P" (the "P" standing for "pure grade"). Two consignments consisted of "SUMILIZER BHT", otherwise known as "DBPC". The last three consignments consisted of a product with the proprietary name "SANTONOX R", which is described as "dialkyl phenol sulflde". It will be convenient to refer to these products by their short or proprietary names. On importation of the products they were charged to basic customs duty and also to countervailing duty equivalent to the excise duty under Item 65 of the Central Excise Tariff, which covers "The following rubber processing chemicals, namely :-
(1) Accelerators (2) Anti-oxidants The appellants claimed refund on the ground that they should have been charged to the lower rate of countervailing duty with reference to Tariff Item 68, i.e. "All other goods, not elsewhere specified". On the claims being rejected at the Assistant Collector's level they filed 9 appeals to the Collector of Customs (Appeals), Bombay. In his combined Order-in-Appeal against which the present appeals have been filed, the Collector rejected all the 9 appeals and the appellants have, therefore, come up to the Tribunal with these 9 appeals.
3. At this stage we are constrained to point out that nowhere in the order of the Collector of Customs (Appeals) has the full date of the order been given. The date of issue has, no doubt, been shown, but only as "28/2". We trust that such omission of basic and important particulars like the full date of the order will be avoided in future.
4. All the appeals were taken up together.
Shri M. Chandrasekharan, the learned Advocate of the appellants, submitted that the issues arising in the appeals already stood concluded by the previous decisions of the Tribunal in the following cases :-
(1) Indian Oil Corporation Limited, Calcutta v. Collector of Customs, Calcutta [Order No. 250/83-C, dated 19-5-83 in Appeal No. C. 721/78-C];
(2) Hico Products Limited v. Collector of Central Excise, Bombay [Order No 580/1983-D dated 13-9-83 in Appeal No. C. 27/78-D, reported in 1983 E.L.T. 2483];
(3) Indian Oil Corporation, Madras v. Collector of Customs, Madras [Order No. 580/83-C dated 19-12-83 in Appeal No. C. 150/79 C]; and (4) Indian Oil Corporation, Calcutta v. Collector of Customs, Calcutta [Order No. 267/84-C, dated 17-5-84 in Appeal No. C. 855/78-C).
In all those cases the Tribunal had held that before any chemical could be classified under T.I. 65, it would be necessary for the Department to establish that the said chemical was predominantly used as a rubber processing chemical. Shri Chandrasekharan submitted that in none of the cases before us had the Department established that the goods were predominantly used as rubber processing chemicals. They had been classified under T.I. 65 on the ground that they were used as "Anti-oxidants" and that they could be used as anti-oxidants in the processing of rubber. Shri Chandrasekharan submitted that there was no dispute that the appellants were using the goods as anti-oxidants, but this was not for the processing of rubber, but in the manufacture of polyethylene. In the light of the decisions relied upon by him, the mere fact that certain goods were used as anti-oxidants would not bring them within the scope of T.I. 65, unless they could also be described as rubber processing chemicals, and this could only be done if the Department could prove that the predominant use of the goods was as an anti-oxidant in the processing of rubber.
5. Dealing with a possible argument that the classification of goods should not be linked with their end-use unless such a condition was incorporated in the Tariff Item, Shri Chandrasekharan cited the judgment of the Delhi High Court in the case of Mis. Metal Forgings Private Limited v. Union of India and Ors. 1985 (20) E.L.T. 280 (Del.). In that case the Hon'ble High Court was dealing with the classification of certain forged products of iron and steel. However, in the course of its judgment it made an observation [vide para 19 of the judgment] as follows : -
"The condition of the article at the time when it leaves the factory gate is the determining factor for the purpose of levy of excise duty. End use of the goods cannot determine their classification in general except where classification is related to the function of the goods as in Tariff Item No. 65."
Shri Chandrasekharan argued that this would show that with reference to Tariff Item 65 the use of the goods was relevant. (Actually it appears to us that this does not have much bearing on the present cases).
6. Shri Chandrasekharan also referred to an observation of the Collector (Appeals) to the effect that "the appellants have admitted that the imported chemicals were rubber processing chemicals in the nature of anti-oxidant". He submitted that this observation was not correct, Apparently, the Collector was referring to the letters addressed by the appellants to the Department wherein it has been stated that the goods could also be used as a rubber anti-oxidant. On the above grounds, Shri Chandrasekharan submitted that the appeals should be allowed.
7. Appearing on behalf of the Department, Shri Sundara Rajan submitted that Government had filed appeals against all the four orders of the Tribunal on which Shri Chandrasekharan had relied. He further submitted that the present cases could be distinguished from those covered by those orders.
8. Shri Sundara Rajan submitted that it was clear from the literature furnished by the appellants themselves that the goods were admittedly used in the manufacture of polyethylene as "anti-oxidants". The literature furnished by them also showed that they were anti-oxidants. He referred to the definition of the term "anti-oxidant" as "A substance which added to food retards or prevents oxidative deterioration of food and does not include sugar, cereal, oils, flours, herbs and spices" in Rule 58 of the Prevention of Foods Adulteration Rules, 1955. He further submitted that one of the products, namely "SANTONOX R" had been approved as an anti-oxidant for foods by the Food and Drugs Administration of the United States. He therefore stressed that there could be no doubt that all the products could be described as "anti-oxidants". With reference to Shri Chandrasekharan's argument that the appellants were not using these products for the processing of rubber, but of polyethylene, and that their predominant use had not been established as in the processing of rubber, Shri Sundara Rajan submitted that polyethylene was chemically a polymer. Rubber was also a polymer. Therefore, anti-oxidants for the processing of polyethylene could also be classified as anti-oxidants for the processing of rubber, which was another polymer.
9. For these reasons, Shri Sundara Rajan submitted that the appeals should be rejected.
10. In reply, Shri Chandrasekharan submitted that Tariff Item 65 clearly specified rubber processing chemicals. The case of the Department throughout had been that the goods were anti-oxidants which could be used in the processing of rubber. The argument that, because rubber was a polymer and polyethylene was also a polymer, an anti-oxidant used in the processing of polyethylene could also be considered as an anti-oxidant used in the processing of rubber, was now sought to be advanced for the first time. Shri Chandrasekharan submitted that this argument was fallacious. If such an argument were to be allowed, an expression such as "alloy of iron" could be stretched to cover an alloy of copper, on the ground that iron was a metal and copper was also a metal. Shri Chandrasekharan submitted that the arguments advanced by him, based on the Tribunal's previous orders, still held good, and that the appeals should be allowed.
11. We have given our careful consideration to the arguments advanced on both sides. Before we come to the facts of the individual cases, we would like to take note of the position emerging from the previous orders of the Tribunal, on which Shri Chandrasekharan relied.
12. In its Order No. 250/83-C, dated 19-5-1983 in the case of Indian Oil Corporation Limited, Calcutta, the Tribunal dealt with the question whether "Alkylated Phenol" was a rubber chemical within the scope of Tariff Item 65. The Tribunal observed that almost every chemical has more than one use and it would not be proper to classify it with reference to only one of those uses unless that one was the predominant or common use. On the evidence placed before the Tribunal in that case it was unable to hold that the predominant or common use of the Alkylated Phenol was as a rubber anti-oxidant. It accordingly set aside the classification of the goods under T.I. 65.
13. In its Order No. 580/1983-D dated 13-9-1983 in the case of Hico Products Limited v. Collector of Central Excise, Bombay (1983 E.L.T. 2483), the Tribunal was dealing with the product D.B.P.C. which is also the subject-matter of appeals Nos. 910/85 and 911/85 before us.
14. In its order in this case the Tribunal had made the following points :-
(1) A substance is an anti-oxidant if it performs the function of an anti-oxidant (namely to delay the oxidation of paints, plastics, rubbers etc.). But in order to make that substance assessable under T.I. 65 it has to be capable of being described not only as an anti-oxidant but also as a rubber processing chemical;
(2) It is well established that although for invoking an exemption notification it is for the assessee to establish that his goods are covered by that notification, for applying a tariff item there is a burden on the Department to establish that the goods are covered by that item;
(3) If certain goods have several alternative uses and the use as a rubber processing chemicals is not the predominant use, it would not be correct to describe the goods as "rubber processing chemicals" merely because that description finds a place in the Central Excise Tariff. In such a case the goods could with equal or greater justification be described as "petroleum processing chemicals" or as "plastic processing chemicals" etc.;
(4) It is true that the end-use of the goods is not relevant, in the sense that the use to which a particular consignment of goods is put cannot determine the classification of those goods generally. But where the classification is related to the function of the goods (as in the case of T.I. 65) the predominant use of those goods is very relevant and important.
Following those principles the majority of the Bench held that the classification of the DBPC under Tariff Item 65 could not be sustained. (One Member, in a minority order, took the contrary view).
15. In its Order No. 580/83-C dated 19-12-1983 in the case of Indian Oil Corporation, Madras v. Collector of Customs, Madras, the Bench was concerned with "AJkylated Phenol", which is said to be another name for DBPC. The Bench observed that the question of predominant use and other aspects of the case for and against the classification of such goods under T.I. 65 had been discussed at great length in the Tribunal's decision in the case of Hico Products and that it did not see any reason to differ from the said decision. Accordingly, in that case also the classification under Tariff Item 65 was set aside.
15A. In its Order No. 267/84-C dated 17-5-1984 in the case of Indian Oil Corporation Ltd., Calcutta v. Collector of Customs, Calcutta, the Bench was again concerned with the classification the "Akylated Phenol". Following the previous orders of the Tribunal, the Bench allowed this appeal also, and set aside the classification under T.I. 65.
16. As already mentioned, the Tribunal's order in the Hico Products case contained a detailed discussion regarding the scope of T.I. 65, and the relevant considerations were laid down (vide para 14 above). Although there was a dissenting order in that case, the subsequent Order No. C-580/83 in the case of Indian Oil Corporation, Madras, passed by a Bench of three other Members, recorded that it did not see any reason to differ from the decision in the Hico Products case. We also do not find any reason to depart from the decision or the reasoning in the majority order in the Hico Products case. Accordingly, we propose to decide these appeals in the light of the principles enunciated in the Hico Products case.
17. However, before we do so, we would like to take note of the additional arguments which Shri Sundara Rajan sought to advance. The argument that these goods are actually used as antioxidant do not advance his case, because that is not in dispute, and that also is not the deciding factor. Therefore the definition of "Anti-oxidant" in the Prevention of Food Adulteration Rules, 1955, and the approval of "SANTONOX R" by the U.S. Food and Drugs Administration as an anti-oxidant for foods would not make any material difference.
18. As regards the argument that because polyethylene is a polymer and rubber is also a polymer, a chemical used for processing of polyethylene can be termed as a rubber processing chemical, we do not find any force in this argument, which is in the nature of a play upon words. As pointed out by Shri Chandrasekharan in his reply, such an argument could lead to very far-fetched or illogical conclusions.
19. We shall now take up the appeals, seriatim. For convenience, we have annexed a list of the appeals, showing in each case the number of the Order-in-Original and the description of the goods.
APPEAL NOS. 906/85 AND 907/8520. These two cases relate to the import of "DSTDP" from the U.S.A. by the "Pelopor" and "Edward Rutledge" respectively. In both the Bills of Entry the goods have been described by their chemical name, together with the description "chemical non-hazardous" and "chemical NOS". In one Btll of Entry, against the heading for the Central Excise Tariff Item, Item No. 65 has been shown, apparently by the appellants.
21. Literature regarding the goods under the heading "THIODIPRO-PIONATE ANTIOXIDANTS" was filed by the appellants. The literature shows that it is a secondary anti-oxidant for use in polyolefins. It has also been mentioned that under the Food Additives Regulations (evidently of the U.S.A.) this product has been approved as an anti-oxidant in food packaging materials. There is no mention of possible use in the processing of rubber.
22. In their letter dated 15-7-1983 enclosing the refund claim in the case of the "PELOPOR" consignment, the appellants had stated that the DSTDP was an anti-oxidant and was used by them for the manufacture of polyethylene. They stated that the higher rate of duty was charged because the material could also be used as a rubber chemical. In their covering letter dated 2-3-1982 to the refund claim in the case of "Edward Rutledge" consignment, the appellants stated that the C.V.D. was levied at 15% based on the assumption that the material could be used in the manufacture of rubber products. They asserted that they did not manufacture any rubber products, nor did they have any connection whatsoever with the rubber industry.
23. In this Order No. S/6-C-3376/83-R dated 8-9-1983 relating to the "Pelopor" consignment, the Assistant Collector observed that "DSTDP" was a rubber processing chemical (anti-oxidant) and that the importers, vide their letter dated 15-7-1983, had themselves accepted that it could also be used as a rubber chemical. He accordingly held that the classification under T.I. 65 was in order. In his order No. S/6-1708/82-R dated 9-11-1983 relating to the "Edward Rutledge" consignment the Assistant Collector recorded that the literature available in the file indicated use as a secondary anti-oxidant for use in polyolefins. He further recorded that the compound was included in the "book dealing with compounding ingredients for rubber, 1979 Edition" (no other title or author given) under the name EVANSTAB 18 as anti-oxidant. He accordingly held that the goods were rubber anti-oxidants.
24. As already stated, appeals to the Collector (Appeals) against the Assistant Collector's orders were rejected by that authority by a combined order. We are reproducing below the findings of the Collector (Appeals) which are common to these as well as the other seven cases :
"I have gone through the records of these 8 (sic) appeals and I have taken into consideration the submissions made by the appellants representative at the time of hearing. I find that the issue to be determined is about the assessment of the imported Distearyl Thiodipropionate, Tertiary Butyl 3 Methyl Phenol to C.V.D. It is, therefore, essential to analyse the Tariff structure of rubber chemicals (antioxidants). In the Central Excise Tariff Item 65 of the C.E.T. reads as follows :
"Rubber processing chemicals". The following, namely : (1) Accelerators (2) Antioxidant.
The appellants have admitted that the imported chemicals were Rubber processing chemicals in the nature of anti-oxidant. The only thing that they have disputed is that they used the imported rubber processing chemicals (anti-oxidant) in the manufacture of polyethylene as a direct additive and therefore the imported chemical (patently rubber processing chemical in the nature of antioxidants) should have been assessed to c.v.d. under Item 68 of the C.E.T. This logic appears to be fallacious. The goods have to be subjected to c.v.d. in all these cases on the basis of their commercial characteristics. Had similar goods been manufactured in India, they would have been subjected to excise duty under Item 65 of the C.E.T. as antioxidants and not under Item 68 of the C.E.T. since the tariff description under Item 65 of the C.E.T. is specifically for rubber processing chemicals in the nature of accelerator and antioxidants. Since in this case the appellants themselves have admitted that the imported chemicals were rubber processing chemicals in the nature of antioxidants, their use by the appellants in the manufacture of polyethylene as a direct additive will not determine their assessment to c.v.d. under Item 68 of the C.E.T. In other words, since the imported goods were specifically covered by Item 65 of the C.E.T. they ought to have been assessed to c.v.d. under Item 65 of the C.E.T. and since this is what was done by the lower authority and was confirmed by the Assistant Collector, I find no reason to interfere with these orders in all these appeals."
25. It will be seen that the Collector (Appeals) has gone by the fact that (according to him) the appellants themselves had admitted that the imported chemicals were rubber processing chemicals in the nature of antioxidants. In reaching this conclusion he had apparently relied on the observations in the orders of the Assistant Collector to which we have already made reference. We do not find that the contents of the appellants' letters accompanying their refund applications bear out that conclusion. The Collector (Appeals) has justified his coming to a decision based overwhelmingly on the alleged admission of the appellants. The most that could be said against the appellants was that they had admitted that the goods could also be used as rubber processing chemicals ; but, as held by the Tribunal in the Hico Products case, which had been followed by the same Collector (Appeals) in an earlier case vide para 36 below, this by itself would not absolve the Department of its responsibility to show that the goods came within the scope of the tariff item. We have also mentioned that in one Bill of Entry the appellants themselves had referred to T.I. 65 with reference to countervailing duty. Though the Department has not referred to this, we have taken note of it, as it could be argued to be an implicit admission that the goods were classifiable under T.I. 65. We shall deal with this aspect in greater detail with reference to the appeals relating to SANTONOX R. For the present we need only say that the mere mention of T.I. 65, perhaps in view of the practice being followed by the Custom House to apply that item, would not disentitle the appellants from contesting the classification before us Nor would it absolve the Customs authorities from discharging their burden of showing that the goods would come within the scope of T.I. 65. This would only be the case if they could be shown to have their sole or predominant use as antioxidant for the processing of rubber. From what has been stated above it will be seen that that has not been done, but reliance has been placed on certain words used by the appellant which would not bear the construction sought to be put upon them. We, accordingly, find that in these two cases the goods were wrongly classified under Item 65. Since no other alternative specific tariff items have been suggested, the classification should be under T.I. 68 as claimed by the appellants.
APPEAL NOS. 908/85 AND 909/8526. These two cases relate to imports of "TBM-6P" by the "Jaladurga" and "Alcoutim" respectively. In the Bill of Entry relating to the "Jaladurga" consignment the goods have been described by their full chemical name. In the Bill of Entry relating to the "Alcoutim" consignment they have been described by their full chemical name, the shorter name "TBM-6P", and the amplification "raw materials". In this Bill of Entry T.I. 65 has also been shown, apparently by the appellants.
27. The goods were imported from a French manufacturer. The literature furnished shows that they are an anti-oxidant. Various uses have been shown, including use for low and high density polyethylenes, in PVC, in certain rubbers, in paraffin wax used in the manufacture of waxed liners and waxed boards for food wrappers, etc. There is nothing to indicate that the use in rubbers is the predominant use.
28. In his order on the "Jaladurga" consignment, the Assistant Collector referred to the literature submitted by the appellants. He held that "although the goods may have multifarious uses one of its well recognised and established uses is as rubber antioxidant. The rubber antioxidants fall under Item 65 C.E.T." In his order on the "Alcoutim" consignment, the Assistant Collector observed that the literature produced showed that the product under reference had uses in rubbers. He went on to observe "in view of this, the party's contention that it is not rubber chemical, is not correct and therefore the claim is not admissible".
29. It will be seen that in both the orders the Assistant Collector held that the mere fact that the goods could be used in the processing of rubber would bring it within the scope of T.I. 65. This is plainly contrary to the criteria adopted by the Tribunal in the several cases referred to above. We have already seen that the Collector (Appeals) has gone mainly on the basis of certain admissions stated to have been made by the appellants. In these two cases even the Assistant Collector himself has not referred to any such admission, but has based his decision on a reasoning which has not been approved by us. We, accordingly, hold that in these two cases also the Department had not discharged its burden of showing that the goods came within the scope of T.I. 65. Accordingly, we hold that the goods should have been classified under T.I. 68.
APPEAL NOS. 910/85 AND 911/8530. These two appeals relate to the importation of DBPC by the "Vishva Ambar" and "Benny Skou" respectively. The goods were imported from Japan under the proprietary name "Sumilizer BHT". In each case the Bill of Entry showed the goods under their chemical name. In one case Item 65 was shown with reference to countervailing duty.
31. The literature filed by the appellants showed that the goods could be used for rubber, for plastics, and perhaps for other uses also. There is nothing in the literature to show that the predominant use is in the processing of rubber.
32. In their covering letter dated 9-5-1983 to the refund claim on the "Vishva Ambar" consignments, the appellants stated that the higher rate of duty was charged because the material could also be used as a rubber chemical. They added that they were manufacturing polyethylene only and hence the antioxidant should be assessed for the manufacture of polyethylene only. A similar submission was made by the appellants in their letter dated 15-7-1983 accompanying the claim on the "Benny Skou" consignments. In his order dated 25-8-1983 on the "Vishva Ambar" consignment the Assistant Collector observed: "The party vide their letter dated 9-5-1983 has stated that DBPC is an antioxidant and it is used for manufacturing of polyethylene. Being an antioxidant it was correctly assessed to CVD under Item No. 65 of C.E.T. The original assessment is in order".
33. We, therefore, find that the Assistant Collector has relied entirely on a sentence in the letter accompanying the refund claim which does not bear out the construction put by him, or justify the reliance placed by him.
34. In the light of the principles we have already enunciated it is held that the Department in this case did not discharge the burden of showing that the case came within the scope of T.I. 65. The order of the Collector (Appeals) is also based on similar reasoning (but less specific) and therefore his finding also cannot be sustained. In this case also the classification under T.I. 65 deserves to be set aside, leaving the goods to be classified under T.I. 68.
35. As regards the consignment imported by "Benny Skou", we are surprised to find that there is nothing at all in the Assistant Collector's order to support the conclusion reached by him. Orders No. S/6-C-3377 and 3378/83-R dated 6-1-1984 purports to be a combined order relating to a consignment of "TMB-6P" imported by the "Alcoutim" (covered by Appeal No. 909/85) and the present consignment imported by the "Benny Skou". The former consignment was imported from France and the present consignment from Japan. The two products were different and made by different manufacturers. In his order, the Assistant Collector has referred only to the literature of the French manufacturers relating to "TBM-6P" and has totally omitted to make any reference to the present goods imported from Japan. Nevertheless, he has rejected both the claims. This total omission, even cursorily to examine on merits the claim of the party relating to the present consignment, has also gone unremarked by the Collector (Appeals). Therefore, in the present case the lower authorities have not given any basis at all for arriving at their decision. As we have already seen, even in the case relating to the "Vishva Ambar" consignment, where some reasons were given, we had found the conclusion of the lower authorities to be unsustainable. Accordingly, in this case also their finding has to be set aside, leaving the goods to be classified under T.I. 68.
36. We may add that the goods covered by these two consignments and described as "DBPC" are the same as were dealt with in the orders of the tribunal in the Hico Products case and Indian Oil Corporation case and are, therefore, directly covered by those decisions. Further, in his previous order No. S/49-47/83-C dated 31-5-1984 the same Collector (Appeals) had allowed an appeal relating to the same goods, following the Tribunal's order in the Hico Products case.
APPEAL NOS. 912, 913 AND 91437. These three appeals relate to the importation of "SANTONOX R" by the vessels "PELOPOR" and "PRESIDENT ROOSEVELT" and by Aircraft "KU-321". There are some differences between these cases and the previous ones. In regard to the two consignments imported by sea, the description in the Bill of Entry includes the words "Rubber antioxidants". However, in the air consignment the description is only "Santonox R" The goods were imported from the United States, being a product of Mansanto Company. The literature submitted by the appellants describes them as "antioxidants for polyolefins". In their letter dated 20-7-1983 accompanying their claim in respect of the "Pelopor" consignment the appellants submitted that the higher rate of duty was charged because the material could be used as a rubber chemical. They stressed that they were manufacturing polyethylene and not rubber. More or less similar statements were made by them in the covering letters to the other two refund claims. In his order relating to the "Pelopor" consignment, the Assistant Collector observed that in their letter the appellants did not dispute the use of the goods as rubber chemicals. The Bill of Entry showed that the goods had been declared as "rubber antioxidant". He remarked that the literature submitted by the appellants was "an ad hoc literature for use of the goods as antioxidant for the manufacture of polyolefin only", and this did not rule out the use of the goods as antioxidant for rubber. He held that the goods had many alternative uses and had been correctly assessed to duty under Item 65 of C.E.T.
38. In his order on the "President Roosevelt" consignment the Assistant Collector referred to the literature submitted by the appellants in an earlier case, indicating it to be "Dialkyl Phenol Sulfides". He referred to various uses shown for the goods in the literature and observed that it was capable of use in rubber as antioxidant. He also observed that the Bill of Lading under which the goods were shipped described them as "Rubber antioxidant Cyclic Chemicals NOS (Antioxidant) SAFB". He, therefore, held that the classification under T.I. 65 was in order. In his order on the consignment imported by air, the Assistant Collector held that antioxidants were specifically covered under Item 65 and that the imported item being an antioxidant could not be an exception.
39. As already observed, the order of the Collector (Appeals) was in general terms and did not take note of the individual features of each consignment. In one of their appeals the appellants had explained their declaration of the goods as "Rubber Antioxidants" in the Bill of Entry as having been necessitated by the fact that this description was in keeping with the description on the Bill of Lading as per U.S. Commodity Code list. This argument was not dealt with by the Appellate Collector, who, as already observed, did not go into the details of the individual appeals before him.
40. There is one other point relating to these appeals which has been mentioned by the appellants. With reference to what are said to be the same goods, namely "Santonox R-9", there was a previous decision of another Appellate Collector, vide Order No, S/49-366/80 R dated 22-3-1980. The Appellate Collector had referred to the suppliers' pamphlet wherein the goods were described as primarily antioxidant for polyolefin. The literature also contained other sub-headings reading "Use in other resins" and "Other suggested applications". The literature did not make any reference to the suitability of the product as a rubber antioxidant. The Appellate Collector held that there was absolutely no indication in the suppliers' pamphlet that they recommended the product as a rubber antioxidant. He held that not only had the Department not discharged the onus of proving that the product was used as a rubber antioxidant, but all the indications were that the product was in fact not used as a rubber antioxidant. He accordingly set aside the classification under T.I. 65.
41. In this case, as in the other cases, the lower authorities have clearly not discharged the burden of showing that the goods are a rubber antioxidant. Their main reliance has been on the description given by the appellants themselves in the Bill of Entry. It has been held by the Supreme Court in the case of Dunlop India Ltd. and Madras Rubber Factory Ltd. v. Union of India and Ors. 1983 E.L.T. 1566 (S.C.)) that the fact of a certain description having been given by the importers in the Bill of Entry would not stand in the way of their seeking refund later, since there is no estoppel in law against a party in a taxation matter. The description in the Bill of Entry need not therefore be taken as in the nature of an estoppel. At the same time it cannot be ignored when considering the nature of the goods and their predominant use. The explanation given by the appellants is that the declaration in the Bill of Entry followed the description in the Bill of Lading, which was in accordance with the U.S. Commodity Code. This again raises the question whether the predominant use of the goods was as a rubber antioxidant, since the Commodity Code would be expected to have taken into account the predominant use of the goods.
42. We, therefore, find that in this case there is an element of doubt regarding the predominant use of the goods. On the one hand we have the U.S. Commodity Code, according to which it is a rubber antioxidant; on the other hand, we have the reasoned decision of the former Appellate Collector in the light of the literature and trade practice etc., to the effect that the ordinary use of the goods was not as a rubber antioxidant. We then have to come back to the proposition that the burden of showing that the goods came within the scope of T.I. 65 was on the Department. We have to ask ourselves whether the lower authorities in the cases before us had discharged the burden. The answer is plainly in the negative because, apart from the Bill of Entry description they have not given any reasons to show that the predominant use of the goods was as an antioxidant for the processing of rubber. We have therefore to hold, on the evidence before us, that the lower authorities did not discharge the burden of bringing the goods within the scope of T.I. 65.
CONCLUSIONS
43. As a result of our detailed consideration of all the 9 appeals in the light of the Tribunal's previous decisions, we hold that in all the 9 cases before us the Department did not discharge its burden of showing that the goods had their sole or predominant use as antioxidants in the processing of rubber. They had followed a wrong approach, namely that if a possible or alternative use in the processing of rubber could be shown, that was conclusive for adopting classification under T.I. 65. This assumption, as already pointed out, is unsustainable. The Department would not be precluded in a future case from seeking to establish the classification of the goods under T.I. 65, provided they have cogent reasons for doing so, in the shape of evidence justifying such a classification, taking into account the guidelines laid down by the Tribunal, particularly in the Hico Products case. However, so far as these appeals are concerned, we have to decide them in the light of the material placed before us. We accordingly allow all these appeals and direct that consequential relief be granted.