TMI Blog1998 (10) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... of appellant No. 1) and Rs. 50,000/- on appellant No. 3 (partner of appellant No. 1). The Collector has confiscated the seized goods with option to redeem the same on payment of a fine of Rs. 50,000/- and has also confiscated land, building, plant, etc. with option to redeem on payment of a fine of Rs. 1 lakh. The 5th appeal mentioned above has been filed by the Revenue against the order-in-appeal dated 24-2-1992 of the Commissioner of Central Excise (Appeals), Mumbai wherein he has upheld the order dated 25-4-1990 passed by the Assistant Collector of Central Excise inter alia approving the classification of the product polysil (which is one of the 18 products covered by the order dated 7-6-1991 of the Collector of Central Excise) under CET Heading 34.02 and extending the benefit of Notification 101/66-C.E., dated 17-6-1966. 2. We have heard Shri V.S. Nankani, learned Counsel and Shri H.K. Jain, learned SDR. 3. The facts in brief are that on 21-2-1987, the Central Excise Officers visited the office and factory premises of the appellant No. 1, who admitted the manufacture of only 3 products. However, by letter dated 7-4-1989, the Company admitted manufacture of 16 products but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... communicated to the assessees on 5-9-1990, and products at Sl. Nos. 3 to 10 are organic surface active agents and/or surface active preparations as per the same test report, and, therefore, products at Sl. Nos. 2 to 10 are entitled to exemption from duty in terms of Notification 101/66. The assessees relied upon the decision of the Larger Bench of the Tribunal in the case of CCE, Bombay v. Auxichem reported in 1988 (34) E.L.T. 637 wherein it has been held that TI 15A of the Schedule to the erstwhile Central Excise Tariff covers Silicon in primary form alone whereas surface active preparations of Silicon fall under TI 15AA. The Tribunal also held that surface active preparations of silicon are not covered under Chapter 39, in the light of the HSN Explanatory Notes to Heading 39.10 which covers silicones. The assessees contended that since Silmar 007 (Item No. 2) has been tested and found to be an aqueous emulsion containing Silicon oil, emulsifier and additives and a preparation containing organic surface active agents it is classifiable under Heading 34.02 of the Schedule to the CETA 1985, corresponding to the erstwhile TI 15AA. They contend that the duty demand on Silmar 007 is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant on the ground that he has not raised the dispute regarding the rate of duty until the proceedings are initiated against him. After all the Department seeks to rely on Section 11A of the Central Excises and Salt Act for demanding differential duty. The demand of differential duty can arise only when the Department correctly determines the duty payable by an assessee and the duty actually paid by him earlier. The correct quantum of duty payable by an assessee, in cases where the goods are subjected to ad valorem rate of duty, depends on the value of the goods and also the rate of duty. Therefore, determination of the correct rate of duty for the goods on which differential duty is demanded is the first step before quantifying the demand. We accordingly over-rule the objection raised by the learned Departmental representative that the appellant should not be permitted to raise the dispute regarding the determination of rate of duty." 7. The decision in the Lili Foam case has been followed in Decora Ceramics v. Collector reported in 1998 (100) E.L.T. 297. In the light of the above case law, we hold that the appellants are not estopped from challenging the classification of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by the jurisdictional Commissioner in the light of the above test reports. 8. As regard the product Octacyne PR (Item No. 11), there is no dispute about its classification; however, the appellants contend that the duty demand on this product is required to be re-determined in terms of Notification No. 175/86, since from the total value of clearances, the value of clearances of 9 products i.e. Item Nos. 2 to 10 will have to be excluded since they are wholly exempt from payment of duty in terms of Notification 101/66. Accordingly, we direct redetermination of the quantum of duty on this product in the light of the order to be passed on classification and eligibility to the benefit of Notification 101/66 to products at Sl. Nos. 2 to 10. The duty payable in respect of Zinac 22 is also to be re-determined in terms of Notification 175/86, on the above lines, while holding that prior to 10-2-1987, Zinac 22 fell for classification under CET sub-heading 3801.90 (for the period from 1-3-1986 to 9-2-1987) since prior to 10-2-1987, Heading 38.09 was not in existence in the Schedule to the CETA, 1985. 9. In respect of products at Sl. Nos. 12, 13 and 14, the adjudicating authority has dro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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