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TMI Blog2003 (9) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... er examining the process of manufacture, it revealed that the items had been mis-declared by the appellants and paid lesser duty while the item appeared not to be "transformer oil feed stock". It was only "spindle oil" requiring its classification under 3817.00. Vide show cause notice dated 28-4-2000, the details of the allegations were brought out including the statement of concerned persons and details of the documents seized. The demand for duty was raised for five years from November 1995 to February 1999 by invoking larger period on the allegation that the appellants had wilfully suppressed and mis-declared various facts with intent to evade payment of appropriate Central Excise duty on the "Transformer Oil Feed Stock" (Transformer Oil Grade II) and recovery of column over head material (Spindle oil - Grade II). The show cause notice relied on the Chemical Examiner's report based on the samples drawn for the latter period which opined that the aromatic constituent is pre-dominant and exceeds non-aromatic constituents in the representative samples. The specific allegations in paragraphs 12 & 15 of the show cause notice are extracted herein below :- 12. The subject matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. 11 It can be seen from the TPL Invoice No. DS/TR/4051, dated 2-8-95 that the 'TO-GR-II' was cleared under S.H. 3817.00 of the Tariff Act. (Mahazar SL. No. DC-3/TPL factory) (E-11). Shri D. Sundaram-Chief Manager (Marketing) of TPL vide his statement dated 27-10-99 admitted that 'TO feed stock' was sold by M/s. TPL as "TO-GR-II". Shri Hanumantha Rao - Manager (QA), when he was shown the IOM, dated 2-9-94 cited above, admitted that the company had decided to sell the TO feed stock as TO-GR-II. From the foregoing it is evident that M/s. TPL were manufacturing/producing 'TO feed stock' and they marketed the same as 'TO-GR-II'. 2. In paragraphs 14 to 42 of the SCN, the allegations have been elaborated and the documentary evidence relied on is stated therein. In paras 43 to 54, the facts pertaining to mis-representation and justification for invoking extended time period under proviso to Section 11A(1) of the Central Excise Act is stated besides bringing out other omissions and mens rea on the part of the appellants. 3. The appellants filed their reply dated 30-1-2001 to the show cause notice. They denied the allegations and elucidated as to how the classification in ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e midboilers which contain approx. 30% of LAB. The LAB, HA, and Midboilers are stored in three separate tanks. The midboilers are either sold directly as SPO (SPO Grade II) or mixed with HA to produce SPO Grade I in which the LAB composition will be 15% max and the balance will be HA. For SPO Grade II, composition will be 35% of LAB and balance HA. The entire process is controlled by DCS (Distributed Control System). 3. Therefore LAB which consists of Benzene which is an aromatic compound as confirmed by technical literature, though can be classified under Heading 27.07, it was classified under Heading 38.17 because the later was a specific heading and it was preferred to the former (27.07) which is a general heading. A copy of the Ministry of Finance's letter M.F. (D.R.) Letter No. 83/4/86-CX.3, dated 15-5-1986, contained in Calcutta II Collectorate Trade Notice No. 188/86, dated 4-9-1986 - reported in 1986 (26) E.L.T. T.17, which classified LAB under Heading 38.17 is enclosed marked as Annexure - A. 4. During the manufacture of LAB the following by-products and side stream products are produced :- Name of by-product Tariff Heading Name of Side Stream Product Tarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (in this case, LAB has been certified by Chemical Examiner as Mineral Oil). As already mentioned LAB having been made from Kerosene and Benzene is a petroleum product and the correct classification for LAB should be Chapter 27 and Heading 27.07. However the Ministry of Finance classified it under Heading 38.17. A reference is drawn to page - 873 of the "Words and Phrases of Central Excise and Customs" 2nd edition, enclosed marked as Annexure - C. The Entry at page - 873 for LAB clearly shows that the Supreme Court has classified it as a petroleum product. As mentioned earlier, Petroleum and its products will fall only under Chapter 27 of the Central Excise Tariff and not under Chapter 38. 7. Heading 27.10 of HSN specifically includes spindle oils, lubricating oils vide Explanatory Note A of Heading 27.10. Of course the Explanatory Note reconfirms that the spindle oils and lubricating oils should consist predominantly Non-aromatic constituents. Textbook on the subject confirm that Benzene is an aromatic compound. It is not in dispute in this case, that when M/s TPL commenced manufacture in the year 1994 of spindle oil, the preparation consisted of a blend of Heavy Alkylate an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is and that they are not covered by a more specific heading in the Nomenclature. Examples of the types of products referred to are :- (1) Petroleum spirit containing small quantities of added anti-knock products (e.g., tetraethyllead dibromoethane) and anti-oxidants (e.g., para-butylaminophenol) (2) Lubricants consisting of mixtures of lubricating oils with widely varying quantities of other products (e.g., products for improving their lubricating properties (such as vegetable oils and fats), anti-oxidants, rust preventives, anti-foam agents (such as silicones). These lubricants include compounded oils, oils for heavy duty work, oils blended with graphite (graphite suspension in petroleum oils or in oils obtained from bituminous minerals), upper cylinder lubricants, textile oils, and solid lubricants (greases) composed of a lubricating oil with about 10 to 15% of soaps of aluminium, calcium, lithium, etc. (3) Transformer and circuit-breaker oils (not used for their lubricating properties) which are stabilised specifically refined oils with added anti-oxid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Heading 27.10, explanation under (C) states that 'the oils described in (A) & (B) to which various substances have added.' Thus the products under (C) are only oils mentioned under (A) and (B) mixed with various substances to render the resultant products suitable for particular use. Hence the predominance of non-aromatic substance holds good for products given under explanation 'C' also. 19. According to the chemical examiner's report the samples contain predominantly of aromatic substances. Thus the Mixed Alkyl Benzene dispatched by the notice under a different nomenclature (invoiced as spindle oil grade I & II) would not find a place under 2710 since the foremost requirement of predominance of non-aromatic substance in the product is not met." 6. The rest of the paragraphs of the finding portion deals with the aspect pertaining to suppression and the judgments relied by the Commissioner to confirm the demands. 7. We have heard learned Advocate Shri S. Ignatius for the appellants and Shri V.T.K. Nayanar, Joint Chief Departmental Representative for the Revenue. 8. Learned Advocate argued at considerable length on the written submissions besides relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its that the report is contradictory in nature inasmuch as the report has stated that both mineral as well as aromatic container predominant which cannot be so. It is not a proper report and factually it cannot be relied. He submits that the constituent of the inputs clearly discloses that Benzene was only 25% and during the course of manufacture, the aromatic content was sent back and not utilized at all. He submitted that there could not have been a report suggesting that mineral oil as well as aromatic content to be predominant. He pointed out that even if the report is relied, the classification has to be only under chapter heading 27.07 and not under chapter 38. He relied on IS specification 355-1992 and also the statement of Shri Ramamurthy. He pointed out that for distinguishing the item between chapters 27 & 38, the important factor is petroleum content therein. If the petroleum content is 70% and more, it will fall under chapter heading 27.10 and if it is less than 70%, it will fall under Chapter 38. It is his contention that constituents of main final product is more than 70% of the petroleum oil and, therefore, chapter 38 clearly discarded. He pointed out that the Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pter heading 27.10 along with other petroleum oil products. He gave an example of Ethyl Alcohol which can be used in running motor cars in place of petrol. He submitted that this does not mean that Ethyl Alcohol can be classified along with petroleum products under chapter 27. On the same analogy, the subject goods namely the mixture of LAB and HA cannot be classified under 27.10 and should fall under 38.17. He also pointed out to some of the documents which had been relied with regard to the appellants' claiming as to whether the product of chapter 38 can be classified under chapter 27. He pointed out that the enormous evidence and statements clearly establishes the fact of suppression, mis-representation and hence larger period was invocable. 10. In counter, learned Counsel again reiterated his submissions and pointed out to all the documents filed to assert that subsidiary chapter heading 38 in any case will not be attracted in view of chapter headings and explanatory notes. 11. We have carefully considered the submissions made by both sides and have perused the entire records including the documents filed and written submissions given by both sides. We are required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al hydrocarbon oil and also aromatic constituent are pre-dominant. It does not give the split up of the composition. It can be read as to mean that the entire sample is composed of mineral hydrocarbon oil, which is also comprised of aromatic constituent. The appellants have produced the test results and technical opinion from the Department of Chemistry, Anna University and signed by the Professor and Head of the Chemistry Department. The extract of these reports is taken out below :- "REPORT Company : M/s TAMILNADU PETROPRODUCTS LTD. Sample : SPINDLE OIL GRADE I & II SAMPLES Analysis of Spindle oil grade I and grade II (labeled as SPO Gr. I and SPO Gr. II respectively) samples was carried out at the Quality Assurance Laboratory of M/s. Tamilnadu Petroproducts Ltd., Manali, Chennai 600 068 on 7-12-2002.The following tests were performed as per ASTM or UOP reference manuals. 1. Density 2. Colour 3. Flashpoint 4. Viscosity 5. &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned at 350 C. Sample injection port temperature was kept at 325 C. The temperature programming conditions are given below. Tridencylbenzene (9.86%) was added as internal standard to differentiate between alkylbenzenes (LAB) and bottoms (heavy alkylate, HA). Column oven initial temperature 50 C initial time 0 min heating rate 8C/min final temperature 350 C final time 20 min The composition of the SPO Gr. I sample was determined from the chromatographic data as given below. Linear alkyl benzene (LAB) content 11.34% Heavy alkylate (HA) content 88.66% Gas chromatographic analysis of SPO Gr. II sample Temperature programmed gas chromatographic analysis was carried out using DB-17 column (fused silica capillary column coated with 0.25mm methylphenyl-polysiloxane) of 30 m length (0.32 mm i.d.). Hydrogen, gas was used as carrier gas at a flow rate of 1.4 ml/min and detector was Flame ionization detector maintained at 250 C. The injection port temperature was kept at 250 C. The temperature programme conditions are given below. Temperature programming- Ramp 1 Column oven initial temperature 100 C initial time 2 min heating rate 2C/min final temperature 180C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oducts in which the weight of the aromatic constituents exceeds that of the non-aromatic constituents". Chapter sub-heading 2707.90 refers to "Other" while other sub-heading refers to specific items. Since the product has been obtained by distillation of high temperature coal tar which includes kerosene also and since according to the Chemical Examiner's report if the weight of aromatic constituent exceeded that of the non-aromatic constituent, then the classification under chapter sub-heading 2707.90 cannot be ruled out. There is no reason given as to how this heading is required to be ruled out in the light of Chemical Examiner's report itself. However, we find from the report of the Professor & Head of Department, Department of Chemistry, Anna University dated 9-12-2002 which is an expert opinion which is on Molex, Paraffin feedstock for its aromatic content, it states that "the total aromatics content in the Molex, paraffin feedstock used for the manufacture of the main product LAB was determined by measuring absorbance of the sample at 285 and 270 nm. From the experimental data the total aromatics content of the Molex paraffin feedstock was determined to be 0.45%". If this rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from bituminous minerals. This is the case with the anti-rust preparations of heading 34.03, which consist of lanolin in solution in white spirit, the lanolin being the basic material and the white spirit acting merely as a solvent and evaporating after application. It is also the case with disinfecting, insecticidal, fungicidal etc., preparations (Heading 38.08), prepared additives for mineral oils (Heading 38.11), composite solvents and thinners for varnishes (Heading 38.14) and certain preparations of Heading 38.23, such as starting fluid for petrol (gasoline) engines, the fluid consisting of diethyl ether, 70% or more by weight of petroleum oils and also other constituents, the diethyl ether being the basic constituent. 16. Revenue has not shown as to how the product in question would fall under this exclusion heading of explanatory notes of Heading 27.10. The exclusion clause would apply to those items which are covered by more specific heading. In the explanatory notes to Heading 27.10 in para (A), the item spindle oil and lubricating oils are included in this heading. Therefore, the claim of the appellants cannot be rejected on this count. Furthermore, chapter headi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturing process itself disclosed that aromatic content is negligible has not been adverted to by the Commissioner which should be looked into closely. Further plea that it is a non-aromatic constituent which is pre-dominant by weight should be looked into. The fact that the appellants are pleading that the exclusion clause in terms of HSN notes of chapter Heading 27.10 is not applicable to the facts of the case should also be scrutinized. Further their plea that mixed alkyl benzene and mixed alkyl naphthalenes under Chapter 38 and more particularly Chapter Heading 38.17 is not attracted for the reason that the constituents are not mixed alkyl benzene and mixed alkyl naphthalenes other than those of Heading 27.07 or 29.02 should also be examined. Further their plea that there is no mis-declaration and that there was intention to evade duty in the matter and that they have been declaring the product which has been rightly classified all along has not been appreciated in the light of the submissions put forth by the appellants. For all these reasons, the impugned order is set aside and the matter remanded to the Commissioner for de novo consideration expeditiously. The Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al duty of Rs. 71,87,396.00 invoking penal clauses under Section 11 AC read with Rule 173Q of the CE Rules and the main contentions made in the show cause notice are : (1) The 'TO feed stock' manufactured by M/s. TPL from the recovery of column overhead material was initially cleared as 'Heavy Alklate (Petolube) under Ch 3817.00 of the CETA which attracted C.E. duty at the rate of 20%. (2) M/s. TPL subsequently decided to market the TO feed as TO Grade II and cleared the same vide chapter Heading 3817.00 of the CETA. (3) M/s. TPL renamed their TO feed stock (TO Grade II) as 'Spindle Oil/Spindle Oil GR I' under Chapter Heading 2710.90 at lesser rate of duty (i.e. 10%) in view of the objection regarding rate of duty raised by the Transformer OIL manufacturers to whom TO Grade II was supplied under sub-heading 3817.00. This oil is stated to contain 85 to 90% of the HA and balance LAB and is obtained during the course of Alkylation. (4) M/s. TPL had already taken advantage of the classification list already filed and approved during the year 1994 for 'Spindle Oil' under Heading 2710.90 of the CETA. This spindle oil is used in lubricating of spindle in Textile In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; Alklyation Process Reaction with Benzene LAB + HA (By product) &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e succeeding paragraphs. 20. During the course of argument, the learned Joint CDR Shri VTK Nayanar, very extensively argued the matter relating to the manufacture of LAB and HA. He has also referred to the written argument submitted to the Court on 25-4-2003 and his further argument proceeded on the following lines :- 21.1 For the manufacture of Lineal Alkyl Benzene LAB and Heavy Alkylates (HA) the principal raw materials are Benzene and Olefin. Benzene reacts with Olefin to form LAB and the reaction is known as alkylation. HA is a byproduct which is similar to LAB but heavy on account of multiple reactions taking place simultaneously in the reactor vessel. Olefins are obtained from normal Paraffins and normal Paraffins are obtained from Kerosene by distillation process. Kerosene contains C5-C17 hydrocarbons. In the distillation process, normal Paraffins from C10-C13 are separated for further conversion to Olefins. C5 - C-10 hydrocarbons and C13-C17 hydrocarbons are sent back to the Kerosene tank or sold as such LAB raffinate. LAB raffinate is nothing but processed Kerosene which is not of any use for the manufacture of LAB. From this it can be seen that Kerosene works ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is derived from the basic aromatic compound Benzene. In the manufacture of LAB certain byproducts also emerge which are generally called Heavy Alkylates and the term "Alkylate" simply means a product obtained by a chemical reaction known as alkylation. These are nothing but Alkyl Benzene of very high molecular weight as principal components and as such heavy alkylates are also aromatic compounds. Any product derived by blending of LAB and HA is therefore undoubtedly aromatic in nature. 21.3 He has further submitted that nowhere the appellants has shown that the subject products contain mineral oil in excess of 70% and according to the appellants HA is mineral oil and therefore predominance of HA in the mixture should be treated at par with predominance of mineral oil. He submitted that this has no basis and they have also not produced any evidence to substantiate their contention. 22. I find that the short issue that is arising for determination in the appeal is the classification of the product viz. Spindle Oil Grade I & II which is used as a Transformer oil feedstock by the appellants i.e. whether the product should be classified under Chapter 27 or Chapter 38 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Heavy Alkyl Benzenes. Shri Muthu Karuppan has also stated that both the transformer oil and Spindle Oil are 100% Alkyl Aromatic. There is therefore, no doubt that these statements clearly indicate that the products in question are mixed Alkyl Benzenes as admitted by the highly qualified and Senior Officers of the Company. When there is no dispute as regards the description of the goods, there is no onus on the part of the department to show that the goods are mixed alkyl Benzenes. Therefore, the department is concerned with only the classification of the mixed alkyl Benzenes. 23.4 The product in question is a mixture of Alkyl Benzene is further confirmed from the test report dated 12-12-2002 of M/s. Chennai Petroleum Corporation Ltd. This test report was obtained from an independent source as directed by the Bench. This test report states as under :- "the product can be classified as a mixture of Alkyl Benzene and the blend composition is optimized to match the bulk characteristics of mineral oil based Transformer oil feed stock obtained by the conventional refining process." 23.5 The above also clearly substantiates that the product is a blended chemical product and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly applied to the gases occurring naturally in the oil fields, the liquids from the wells, and the solids which are dissolved in, or have been separated from the liquid. The composition of crude petroleum varies with locality of occurrence, but all contain Alkanes (straight and branched chain from about C1- C40 Cyclo Alkanes and Aromatic Hydro Carbons". The book further says that the crude petroleum or mineral oil on fractional distillation yields many fractions like Petrol, Kerosene, Gas oil, Grease, Paraffin wax etc. These are therefore, mineral oils and for classification under Chapter 27.10, the goods should contain minimum 70% of these minerals. However, Chapter note (2) to Chapter 27 further says as under :- "petroleum oils and oils obtained from bituminous minerals include not only petroleum oils and oils obtained from bituminous minerals but also similar oils, as well as those consisting mainly of mixed unsaturated hydro-carbons, obtained by any other process, provided that the weight of the non-aromatic constituents exceeds that of the aromatic constituents." The HSN explanatory notes says that heading will include (1) Topped Crude and other oils obtained from distillat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fall under Chapter 27.10 on account of the fact that they are predominantly aromatic in nature as admitted by the appellants themselves and confirmed by the Chemical Examiner's report, I am of the opinion that, as rightly pointed out by the learned Joint CDR, we need not have to go to the exclusions under Chapter 27. 10. Further, the weight of the aromatic constituents exceeds that of the non-aromatic constituents, the other possible classification could be under heading 27.07 which reads as under :- "Oils and other products of the distillation of high temperature coal tar; similar products in which the weight of the aromatic constituents exceeds that of the non-aromatic constituents" which covers Benzole, Toluole, Xylole etc. But HSN explanatory notes for Chapter 27.07 specifically excludes mixed Alkyl Benzenes or mixed Alkyl Napthalenes obtained by the alkylation of benzene or napthalenes which are classifiable under heading 38.17. HSN therefore, makes it clear that by virtue of the exclusion clause in the Chapter heading 27.07 that mixed alkyl benzene will be cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether we can invoice the product as Transformer Oil Base Stock (TOBS) under Tariff heading 27.10 attracting 10% Excise duty. Presently Transformer oil Grade II comes under Tariff heading 3817, attracting 20% Excise duty. If Reclassification of the product as Transformer Oil base Stock under Tariff heading 2710 with 10% Excise Duty is not possible, they wanted to know whether we can supply TO Grade II in the name of Spindle Oil (VG 22). You may please note that our Spindle Oil has already been registered under Tariff 2710 with Excise duty @ 10%. Technically there is not much difference between our Transformer oil Grade II and Spindle Oil (VG 22). Kindly let us know the excise implication involved in this case. Please treat the matter VERY URGENT." Sd/- (S. Karthikeyan) DM (Mktg. Devt.) Further, the message sent by Shri S. Ramamurthy, DM (Excise) TPL Site to Shri S. Karthikeyan, DM (Mktg, Devt) TPL HQ a copy of which is filed on page 116 of the paper book is reproduced below :- URGENT Dt. 16-11-95 FAX = MESSAGE FROM: S. RAMAMOORTHI, DM (EXCISE) TPL-SITE. TO: MR. S. KARTHIKEYAN, DM (MKTG.DEVT.) TPL-H.O. PLEASE REF. YOUR FAX MSG. DT. 15-11-95. IN THIS RE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for deciding the same :- "Whether the appeal is required to be allowed by remand for de novo consideration in terms of the observations and findings recorded by Member (J) Shri S.L. Peeran in his order." (OR) "the appeal is required to be dismissed and penalty imposed under Rule 173Q is required to be reduced from Rs. 5,00,000/- to Rs. 1,50,000/- (Rupees One Lakh Fifty thousand only) as held by Member (T) Shri Jeet Ram Kait in his order." Sd/- (Jeet Ram Kait) Member (T) Sd/- (S.L. Peeran) Member (J) 30. [Order per : P.G. Chacko, Member (J)]. - This matter has come up before me as Third Member on account of the aforestated difference of opinion between learned Member (Judicial) and learned Member (Technical). The relevant facts of the case have already been noted in the orders recorded by learned Brothers. The difference of opinion is on the classification of two products which were cleared by the appellants during the period November, 1995 to February, 1999 by paying duty of excise at the rate applicable to sub-heading No. 2710.90 of the Schedule to the Central Excise Tariff Act. The two products were cleared as "Transformer Oil Grade I" and "Transformer Oi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sulphur and nitrogen. The resultant mixture contains normal paraffins, non-normal paraffins and aromatic compounds. On further fractionation, normal paraffins are separated from non-normal paraffins and aromatics. The mixture of non-normal paraffins and aromatics is also sent back to CPCL under the name 'LAB raffinate'. Normal paraffins are dehydrogenated into olefins and, these olefins are treated with benzene in the Alkylation plant. The reaction between benzene and olefins - Friedel - Crafts Reaction - involves alkylation of benzene and the same results in a mixture of LAB and Heavy Alkylate (HA, for short), the former being the main product and the latter a by-product. Further fractionation of this mixture is then carried out, when pure LAB gets collected in what is called "re-run column" while two fractions get collected in what is called "recovery column". Overhead material collected in the recovery column is a mixture of LAB & HA, the two components generally being in the proportions 30-50 and 70-50 respectively. The bottom material collected in the recovery column is almost pure HA (with traces of LAB). While the pure LAB collected in the re-run column is cleared as the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that mixed alkylbenzenes are specifically covered by Heading 38.17 of the Tariff Schedule and, therefore, there is no scope for looking into the HSN. 36. Having examined the submissions, I have to disagree with the contentions raised by the learned counsel while appreciating the fervour with which he has argued the case. LAB is, admittedly, alkyl derivative of benzene. HA is also, undisputedly, alkyl derivative of benzene. The only difference between the two is that the alkyl radical (side chain) in HA molecule contains larger number of carbon atoms with the result that the molecule has higher molecular weight than LAB. Both are alkyl derivatives of benzene. Chemistry and chemical industry treat them as aromatic hydrocarbons like the parent compound viz. benzene. McGraw-Hill Encyclopedia of Science & Technology, Kirk-Othmer Encyclopedia of Chemical Technology and other chemical literature bear testimony to this fact. What is contemplated under tariff heading 38.17 is a mixture of alkylbenzenes or alkylnaphthalenes. Each of the products in question fully satisfies this requirement inasmuch as each is a mixture of alkylbenzenes. 37. Where the tariff entry is sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r products in question contain kerosene or other mineral oil. 38. Ld. Counsel has also relied on a decision of the Gujarat High Court, namely State of Gujarat v. Indian Petrochemicals Corporation Ltd. [1992 (86) STC 95]. The question before the High Court was, of the two entries viz. Entry 9 and Entry 32 in Part A of the Schedule to the Gujarat Sales Tax Act, 1969, which entry was applicable to Linear Alkylbenzene? While dealing with this question, the Court recorded the following findings in para 5 of its judgment :- "It is an undisputed position that the two components of LAB are kerosene and benzene. Both kerosene and benzene are petroleum products. On this point, there is no dispute. It is also not in dispute that when these two articles, namely kerosene and benzene are mixed together in certain proportion, the product LAB comes into existence. It is also not in dispute that LAB does not contain any other ingredients other than kerosene and benzene. Therefore, simply because on account of the mixture of two petroleum products, the third product which has come into existence does not cease to be a petroleum product. It is not a sub-product of petroleum product as is sough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch steps under Rule 173B of the Central Excise Rules 1944. They cannot allege that any material fact was suppressed atleast from the date on which the classification list was filed. Section 11AC was enacted only on 28-9-1996. In the circumstances, any action under this provision of law was not warranted in the present case, submits the counsel. These submissions are also opposed. Ld. Jt. CDR submits that the classification list dated 8-2-96 was purportedly a "revised classification" from which it would not appear to the department that it had been filed in respect of any new product. It is also submitted that the declaration in the classification list was vague as it contained no specific details of the products or of the process of manufacture thereof. I have considered and appreciated these submissions. Having agreed, on the merits of the case, with the findings recorded by learned Member (Technical), I have got to endorse his decision in regard to penalty as well. 40. On a thorough scrutiny of the records of the case, I have found that enough materials are available on record for this Tribunal to render a reasoned decision on the merits of the case. Additional evidence in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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