TMI Blog1989 (12) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... once again. The appellant s contention was rejected by the lower authorities, who held that the emulsion was chargeable to duty under Tariff Item 15A(1) of the Central Excise Tariff in view of Explanations II III below Tariff Item 15A. They, however, allowed proforma credit under Rule 56A of the Central Excise Rules, 1944 in respect of the countervailing duty paid on the imported silicone oil. 2. We have heard Shri Uday M. Joshi, learned advocate for the appellants and Shri A.S. Sunder Rajan, learned JDR for the respondent. Shri Joshi has relied on paragraph 7 of this Tribunal s decision reported in 1988 (34) E.L.T. 637 (Tribunal) in the case of Collector of Central Excise, Bombay III v. M/s. Auxichem in support of his contention that the appellants products are silicone preparations and hence not chargeable to Central Excise duty under Item 15A(1) of the Central Excise Tariff. He has also argued that the demand for duty is partly time-barred as the demand show cause notice was issued on 26-10-1982 in respect of the goods cleared from the factory during the period 1-3-1982 to 30-9-1982. He has stated that the show cause notice was received by the appellants on 2-11-1982, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g had changed and the emulsion obtained by the Company contained about 29 to 30% of silicone oil. The Company, while selling its silicone emulsion, endeavours to educate its customers about the manner in which to analyse the product. The customers are advised that by simple addition of DIOXAN, a liquid to the emulsion, the original imported silicone oil gets separated so much so that the oil is retrievable. The silicone oil that is recollectable by adding DIOXAN liquid, is, chemically speaking the same product as the imported silicone oil, without any loss of or diminution in its characteristics and properties. Had there been any chemical synthesis as a result of the process employed by the Company to bring about silicone oil in the form of emulsion, both the substances would have lost their original identities and silicone oil would not be recoverable in its pristine form as a result of addition of DIOXAN liquid to emulsion. This fact admirably proves that the resulting emulsion was not a new product by itself nor did it constitute a product brought into existence by chemical synthesis . 5. The learned Departmental Representative has relied on this Tribunal s decision in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned. Many of these preparations are in emulsions. All these emulsions have other materials, additives, emulsifiers etc. added to aid and help in the use of the preparations in the desired industrial application. In paragraph-10 of the Tribunal s order, it has been observed that only an emulsion of a silicone such as silicone in its primary state or one of its primary states, will be covered. A preparation containing silicone in emulsion for specific uses as in wetting, mould release, lubrication, will not be that emulsion; it is only an emulsion preparation used as wetting, mould release or lubricating preparation otherwise all goods containing polymers or synthetic resins will have to be assessed under Item 15A. Thus paints, lubricants, adhesives, to name only a few, all contain varying amounts of synthetic polymers in mixtures or emulsions. Silicone finds uses even in medicines as antiflatulents. In all these preparations, mixtures, compounds, it is the synthetic polymers that give the products their active, distinctive qualities and properties. It has been held by the Tribunal that M/s. Auxichem s products cannot be assessed under Item 15A as they are not silicone, but only p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... constituting the mixture and was liable to duty under Item 68 of the Central Excise Tariff. It was also held in that judgment that an article could be. taxed once as a raw material and after it was manufactured and converted into different taxable goods, then it could be taxed again as another taxable item, and the two levies could not be treated as on the same goods. In holding the above views, the Hon ble High Court considered and followed the ratio of several judgments of the Hon ble Supreme Court. In this connection, paragraph 64 of that judgment is reproduced below :- In Anwarkhan Mehboob Co. v. State of Bombay (AIR 1961 S.C. 213), the Supreme Court held that the conversion of raw tobacco into bidi pattis by removing stem and dust, which, in turn, was required for the manufacture of bidis, emerge into a commercially different commodity. In the case of Hajee Abdul Shukoor Co. (1964) (15STC 719) (S.C.), the tanning of rawhides and skins was held as a manufacturing process resulting in the production of different commercial commodities. In the case of Swasthik Tobacco Factory (17 STC 316) (S.C.), the Supreme Court held that the conversion of raw tobacco into chewing tobacco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ai (AIR 1971 S.C. 2333), the process of melting the metals and mixing them together was held by the Supreme Court as a manufacturing process, resulting in the production of a new commercial commodity. Relying upon the ratio decided in these cases and applying the test laid down therein and on a consideration of all the facts and circumstances of the case, we hold that the process adopted by the appellants of roasting and grinding coffee seeds and Chicory roots by the mechanical process involving consumption of power and then mixing the powders thus obtained from coffee and chicory by mechanical process involving consumption of power constitute the process of manufacture as defined in Section 2(f) of the Central Excises and Salt Act, 1944 and further hold that the product thus obtained known as Coffee-Chicory Blend and otherwise known as French Coffee in the business market is a distinct commercial commodity falls under Item 68 of the First Schedule and hence liable to levy of excise duty in the manner taxed by the Department. We further hold that the blend or mixture called French Coffee differs in identity from the two ingredients constituting the mixture. The new product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other like preparations, the appropriate amount of duty of excise or the additional duty under Section 2A of the Indian Tariff Act, 1934 has already been paid or where such surface-active agents are purchased from the open market on or after the 20th day of January, 1968". If the appellants products fall within the terms of this notification and the condition laid down therein is fulfilled, the benefit of the same should be extended to the appellants products. 9. The learned advocate for the appellants has raised the question of limitation. This has also been raised in the ground of appeal before us. Although this point was not agitated before the lower authorities, this being a point of law, we allow the appellants to raise this contention. We observe that the show cause notice was issued on 26-10-1982 for the period from 1-3-1982 to 30-9-1982. The Department has not made out a case that there was suppression of facts or wilful mis-statement on the part of the appellants. The demand for duty, if at all leviable (see paragraph 8 of this order), should, therefore, be limited to a period of six months only under Section 11A of the Central Excises Salt Act, 1944. Demand for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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