TMI Blog1983 (10) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by Arti Paints and Chemicals at the concessional rate of the duty under Notification N. 35/73-C.E. was not used for the intended purpose as laid down in the notification. The Appellate Collector in his order dated 12th February, 1983 concluded thus : We have seen the concession was available only if the toluene was used in the manufacture of thinners used for paints etc. The appellants have not satisfied that the thinner manufactured from the toluene was so used. Accordingly, demand of duty is justifiable. 2. We can see from this that the Appellate Collector held that the toluene, if it was to be given exemption under Notification No. 35/73-C.E., should have been used in the manufacture of thinners used for paints. The show cause not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise, Bombay, Arti Paints and Chemicals while applying for the L-6 licence to be permitted to use toluene amongst other products for special industrial purposes under Rules 176 and 192, declared that the toluene which they wanted to obtain at concessional rate of duty was meant to be used in the manufacture of thinners at their factory at Thane-Belapur Road, Thane and requested for its renewal for the year ending 31st December, 1975. The licence was granted and was last renewed on 26-11-1976 by the Superintendent of Central Excise, Range No. 6, Bombay Division II. The application contained a schedule in which the commodities to be manufactured were declared as thinners. The manner of manufacture was also said to be mixture with denatured s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture. Therefore he says that there was no manufacture of the kind under Notification No. 35/73-C.E. A little further on he says that there has been no proper accounting and use of the goods received by Arti since Arti was not a paints manufacturer and therefore, that means the goods were not utilized in the manufacture of paints. This in turn means the goods were sold as such after some physical treatment. 8. Much objections were raised at the time of the adjudication proceedings before the Assistant Collector, one of which was that under Chapter X it was not necessary to produce D-3 declaration, but these disputes are not really of much relevance to the case before us. Eventually the Assistant Collector arrives at his conclusion afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey had abused the concession and had not used the motor spirit in the manner permitted by the notification and had thus gained undue benefits. He pointed out that at one time they held, on record, more motor spirit than the area of the premises licensed under L-6 would be able to hold. He pointed out to the fact that the Central Excise office was only a stone s throw away, but they did not file D-3 declarations to them in person but sent them by post. There was already an action pending against them in which they have been penalised by the Assistant Collector (Preventive), Bombay in respect of goods in which originated from their premises and seized at Baroda. Long and elaborate arguments were presented by both sides on behalf of their p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anted to obtain at concessional duty under Notification No. 35/73-C.E. That error continued till the very end and no body appears to have discovered it. The adjudication says that the goods were not used for the intended purpose as Notification No. 35/73-C.E., but this conclusion appears to have been arrived at because the Assistant Collector held that the thinners manufactured by Arti Paints were not used in the manufacture of paints. Knowing it as they did that Arti Paints were not manufacturers of paints but only of thinners, the central excise should not have allowed the removal to them at concessional rate of duty of the toluene from the manufacturers, Indian Oil Corporation; Union Carbide etc. We would like to repeat here that the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any excisable goods obtained under Rule 192 are not duly accounted for as having been used for the purpose and in the manner stated in the application or are not shown to the satisfaction of the proper officer to have been lost or destroyed, the applicant shall on demand by the proper officer immediately pay the duty leviable on such goods. Under Rule 192 the Central government can by notification under Rule 8 sanction the remission of duty on excise goods used in a specified industrial process and the person who wants to avail the exemption is to make an application to the Collector stating the estimated annual quantity of the assessable goods required and the purpose for and the manner in which it is intended to use them and shall declare ..... X X X X Extracts X X X X X X X X Extracts X X X X
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