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2018 (6) TMI 767 - AT - Central ExciseClassification of goods - Axxanol 77C, Axxanol 33C and Axxanol 33 - It appeared that appellants produce the products namely Axxanol 33CD and Axxanol 33 by reducing concentration of Axxanol 33C using locally purchased lab ethanol; that the resultant products are classifiable under Chapter Heading 38112900 of Central Excise Tariff Act, 1985 - whether the process of diluting imported Rust Preventive Oil AXX33C in 208 litres drums, diluting the same in concentrations of 1:9, 1:24, 1:49 would fall within the ambit of Chapter Note 9 to Chapter 38 of the First Schedule of the CETA, 1985 and hence liable to payment of Central Excise duty? Held that:- The manner of application of the product in respect of the concentration strength is either to spray or to dip the component required to be treated for anti-rusting, after which, the mineral spirit and ethanol evaporate leaving behind the concentrate in the strength that has been made into to protect the component. The functionality of the Axxanol product remains the same irrespective of dilution that it has undergone namely to protect the components or items treated from rust prevention - Chapter Note 9 is being needlessly stretched in this case by the department and in the impugned order in an attempt to bring the diluted Axxanol within the scope of product “manufactured” by the appellant. It is also to be noted that the imported Axxanol came in 208 litres drums and the diluted Axxanol also was sold in cans/drums either of 208 litres or 35 litres, depending on the requirement of the consumer. The processes carried out by the appellant in this case will not attract the mischief of Chapter Note 9 before or after 1.3.2008 - appeal allowed - decided in favor of appellant.
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