TMI Blog2017 (9) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... cting excise duty. Classification of goods - circular dt. 13.2.1989 - Held that: - The appellant's claim that Heading 2713 is not applicable to the impugned goods as the product is not oils obtained of distillation of high temperature coal tar, we note that said tariff heading covers similar products in which weight of aromatic constituents exceeds that of non-aromatic constituents. We are in agreement with the reasons elaborated in the circular dt. 13.2.1989 of the Board and note that appellant did not bring out by way any technical literature/support to contest the said finding. Accordingly, we uphold the classification adopted by the lower authorities - goods classified correctly under CTH 2707.90. Time limitation - Held that: - there can be no question of suppression, wilful misstatement etc. for invoking extended period of limitation for demand. In any case, no such allegation or evidence was recorded in the SCNs - the original authority should re-quantify the duty liability after consideration of the demands which are issued within normal period - matter on remand. Interest on differential duty - Held that: - Board vide master circular dated 10.3.2017 also states th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l duty demand of the above said amount. The appeal preferred by the appellant was decided by the impugned order. The Commissioner (Appeals) affirmed the findings of the original authority and rejected the appeal. 4. The ld. counsel appearing for the appellant contested the findings of the lower authorities on various grounds. His arguments are mainly on the following points: i. Board circular based on Deputy Chemist opinion against the view of whole conference of collectors ii. Process not amounting to manufacture iii. No Deemed manufacture prior to 2000 period of dispute being 1989 to 1999 iv. Onus is on revenue to establish manufacture v. Classification under 2713.30 is correct as against the classification against 2707 proposed by the revenue Ld. counsel elaborated on each one of the above points along with supporting case laws. These are discussed in detail later in this order. 5. The Ld. A.R supported the findings of the lower authorities. He submitted that the appellants were all along discharging Central Excise duty on the speciality oil cleared by them. When the proceedings were initiated for reclassification of the product they have raised t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured item. In the judgement it is said that the assessee had to prove that their product is either not produced or manufactured or if they had been produced or manufactured they were not marketed or capable of being marketed. The judgement is based on Sections 2 (d), 2(f) and 3 of Central Excises Salt Act 1944. Further, in paras 7,9,10 of the said judgement it has been explained that the duty of excise being on production and manufacture which means bringing out a new commodity, it is implicit that such goods must be usable, moveable, saleable and marketable. The duty is on manufacture or production but the production or manufacture is carried on for taking such goods to the marked for sale. The obvious rationale for levying excise linking it with production or manufacture is that the goods so produced must be a distinct commodity known as such in common parlance or to the commercial community for purposes of buying and selling. In this case the extracts received from M/s.MRL are blended to form process oil, which is a new product, emerging with different viscosity suitable for its ultimate use in the tyre industry. 28. The judgments on which the assessee had relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m residues . In view of the provisions of Chapter Note 2 of Chapter 27, the possibility of classification of such goods under Heading No.27.10 of Central Excise Tariff 1985 is also ruled out since aromatic constituents in this case is predominate over non-aromatic constituents. The Deputy Chief Chemist, CRCL, has opined that the more appropriate sub-heading for the goods in question would be 2707.90 as similar products in which the weight of aromatic constituents exceeds that of their non-aromatic constituents. The Board agrees with the views of the Deputy Chief Chemist in the matter. 30. The Commissioner (Appeals) has classified the goods under 2707.90. Apart from the fact that he classified the goods under this heading unilaterally without notice to the assessee, this classification falls within the following description:- 27.07 Oil 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. 31. The process oil is meant for use by the tyre industry. Based on the report submitted by the Deputy Chief Chemist, the honourable Commissioner (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant is on the simple process of physical blending to obtain the product of desired viscosity. We note that the appellants are making the whole issue very simplistic. The processes as recorded in the impugned order are not contested. The process of making speciality oil namely 'process oil' to be used in the tyre industry though may involve only a physical blending has also got various other processes. The appellants have installed reactors with steam coils and agitators and equipment to enable the precision blending. The mixed extracts of different viscosities are sent to the reactor fitted with steam coils and agitators and was heated up to 500C to 600C to provide better blending and also to remove traces of moisture. Upon checking up quality, parameters of viscosity and other requirements, the product is cleared in bulk by lorry or drums to the clients. These are admittedly special process oils which are industry-specific. In the present case, tyre industry exclusively uses this oil for strengthening and for flexibility of tyres. The possibility that the extracts cleared by M/s.MRL itself can be put to use by tyre industry as claimed by the appellant is not sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said clarification and examining the facts of the present case, we note that the classification as ordered by the lower authorities under tariff heading 2707.90 is proper and correct. The appellant's claim that Heading 2713 is not applicable to the impugned goods as the product is not oils obtained of distillation of high temperature coal tar, we note that said tariff heading covers similar products in which weight of aromatic constituents exceeds that of non-aromatic constituents. We are in agreement with the reasons elaborated in the circular dt. 13.2.1989 of the Board and note that appellant did not bring out by way any technical literature/support to contest the said finding. Accordingly, we uphold the classification adopted by the lower authorities. 9. The appellants also submitted that the original authority did not give a clear finding regarding limitation prayed by the appellants. Some of the show cause notices are said to be clearly issued beyond normal period and in the appeal, they have identified five such notices. These are 487/94 dt. 3.10.94, 200/95 dt. 5.4.95, 567/95 dt. 4.10.95, 192/96 dt. 1.4.96 and 552/96 dt. 1.10.96. There is no allegation in these notice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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