TMI Blog2019 (10) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... covered under separate tariff headings after 1.3.1986, Tar is classifiable under Heading 27.06 and Pitch under heading 27.08. Pitch is derived by distillation of Tar wherein the oils Light oil, Naphthalene oil, Creosote oil and other residual oils are removed. Depending on the extent of oil removed Pitch may be soft pitch or medium soft pitch or medium hard pitch or hard pitch . Once pitch is obtained, it is a completely different product from Tar . Once a product is Pitch , it is no longer Tar . Pitch can, under no circumstances, fall under the Tariff Item 27.06. SAIL, DSP has contended that they are not having pitch plant and have submitted photographs to prove this. It is also their contention that they never manufactured pitch of any type since 1987 nor had any facility to manufacture pitch. - The facts need to be verified. It is also found that no independent evidence has been disclosed in the adjudication orders to discharge the onus cast upon the Revenue to establish the correct classification of the impugned goods, as contended by them, and is covered by the Apex Court s decision in CCE Vs. SAIL (supra). The matters need to be remanded back to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O-I-O No. 04/Commr/BOL/06 dt:27.03.2006 2,16,41,79 7/- 2,16,41,797/- July 2004 to March 2005 05.08.2005 3. E/17/08 SAIL O-I-O No. 52- 53/Commr/BOL/07 dt:08.10.2007 2,89,97,644/- 2,89,97,644/- April 2005 to July 2005 (i).31.03.2006 for ₹ 1,20,58,609/- (ii) 09.11.2006 for ₹ 2,15,78,680/- 4. E/185/09 SAIL O-I-O No. 26- 27/Commr/BOL/08 dt:16.12.2008 12,66,68,929/- 12,66,68,9 29/- August 2006 to March 2008 (i) 28.08.2007 for ₹ 5,99,66,16 6/- (ii) 02.07.2008 for ₹ 6,67,02,3 13/- 5. E/74/10 SAIL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegrated steel plant at Durgapur SAIL manufactures steel from Coal and Iron Ore. Coke is charged in the Blast Furnace along with iron ore etc. for manufacturing iron in hot metal form. Coke is manufactured by carbonization of coal, i.e. through indirect heating of coal in series of ovens in the form of a battery known as coke ovens battery in the area of Coke Ovens and Coal Chemicals Plant of the integrated steel plant. In the process of coal carbonization, coke oven gas is generated through condensation resulting in production of crude coal tar, which is the mother of thousands of chemicals. The Coal Chemicals Plant separates the said chemicals by fractional distillation of the crude coal tar. When coal tar is completely distilled roughly at a temperature of more than 360 C, the residue becomes pitch , a solid waste in general. However, when the Coal Chemical Plant distils coal tar in its tar distillation plant upto a temperature of about 280 C, the residue obtained is coal tar , but in partially distilled form, CTPD. (ii) To get pitch from coal tar a completely different plant is required, which SAIL, DSP does not have. During 1987 SAIL, DSP started producing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assification dispute in respect of the said goods stood decided by the Apex Court in the case of Commissioner of C.Ex. Vs. Steel Authority of India Ltd., 2004 (164) ELT 387 (SC) and was no longer res integra. The decision of the Supreme Court decided the classification of Pitch Creosote Mixture and not Coal Tar Partially Distilled. The fact that the two products are different is evident from, inter alia, the observation of the Commissioner in one of the impugned order that PCM was a similar product to CTPD. Similar does not mean same. The decision of the Apex Court as regards classification of PCM in no manner whatsoever settled or could settle the classification of CTPD, a distinctly different product, known as such both by those who deal with the same and/or use the same, as well as in technical/chemical parlance. (viii) The test reports of Department s Chemical Examiner and documents submitted before the adjudicating authority evidencing marketing of CTPD and Pitch as different products, conclusively establishing that they are two distinct and different products. Classification of goods has to be decided on the basis of principles in this regard settled by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id to be PCM or classified as such. (xii) The appellant does not manufacture pitch of any type nor had or is having any facility to manufacture pitch. It regularly purchases Pitch/Bitumen from various sources, like Indian Oil Corporation Ltd., for its use, which is evident from the materials on record of the instant proceedings. (xiii) The Commissioner s view that CTPD and Pitch are both similar to each other, is also contradictory to the opinion of the Chief Examiner, Central Board of Excise and Customs, accepted by the Board vide CBE C F No. 88/1/83-CX-3 dated 9-4-84; (T.A.No. 10/84). In the 18th North Zone Tariff-cum-General Conference held on 3rd and 4th February, 1982 at Indore, the Chief Examiner had explained that- Coal Tar pitch cannot be strictly called Tar but is only a residue product when the solvent has been completely extracted out of TAR. Pitch is the last residue in the process of destructive distillation of Coal in which process the distilled products like High and low Naphtha, High Creosote Oils are obtained. It was decided by the Conference that since Pitch cannot be equated with Tar , and nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by T.I. 11(5) of CET........... From the Minutes of the said conference and the Board s Circular dated April 9, 1984 it would be seen that Pitch is the last residue in the process of destructive distillation of Coal whereas the CTPD arises at 260 C by partial distillation process of Coal Tar. During distillation process of tar, in the Tar distillation units, Light Oil and Naphthalene Oil fractions are taken out and rest oils goes with CTPD. This also clearly establishes that the said goods manufactured by SAIL, DSP and pitch are not similar products. (xiv) The distinction between CTPD and Pitch stands further confirmed from the end user s certificates issued by SAIL s customers viz., Techmens Chemicals Pvt. Ltd., Kolkata dated August 21, 2008 Nithya Sai Chemicals (P) Ltd., Visakhapatnam dated August 21, 2008, Mahabir Coke Industries (P) Ltd., Kolkata dated August 21, 2008 and Himadri Chemicals Industries Limited dated September 2, 2008. All the said certificates unequivocally confirm that they manufactured Coal Tar Pitch as the final product from the CTPD purchased from SAIL. This relevant piece of evidence has also been ignored by the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n behalf of the Revenue, besides reiterating the findings of the Commissioner in the impugned adjudication orders, reliance was placed on the Supreme Court s decision in CCE Vs. SAIL (supra). It is submitted that this decision completely settles the classification issue and that SAIL s contention that the impugned goods are different product than what was in the decision of the Apex Court is incorrect in view of their submission dated March 25, 1998 before the Commissioner. According to the Learned Special Counsel, mere change of name does not alter the goods. 6. We have carefully gone through the facts of the case and have considered the submissions made by the parties and the evidences produced by SAIL. 6.1 We find that as per Central Excise Tariff Act, 1985 Tariff Headings 2706 and 2708 are as follows Sub-heading No. Description of goods Rate of duty 270600 Tar Distilled From Coal, From Lignite Or From Peat And Other mineral Tars, Whether Or Not Dehydrated Or Partially Distilled, including Reconstituted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch has not yet become Pitch . Once the product becomes Pitch , it is no longer partially distilled tar , product and is therefore correctly classifiable under subheading 2708.11 of the Central Excise Tariff [paras 8, 9 10]. Pitch creosote prior to 1st March, 1986 classifiable under Tariff Item 11(5) of the erstwhile Central Excise Tariff as the said entry included both Tar and Pitch [paras 2 3]. 6.4 We find that the lower adjudicating authority in his discussion and findings has stated that The said Noticee is just dragging the scenario towards classification dispute of CTPD which has already been settled by the Hon ble Apex Court. In this regard, it is pertinent to point out on record that the Noticee in its submission dated 25.03.1998 had confessed that PCM and CTPD are same products. The classification of a similar product, vis., PCM (Pitch Creosote Mixture) has been well settled by the Apex Court under six digit S.H. No. 2708.11 (which now corresponds to 8 digit Tariff Item No. 27081010) vide judgment reported in 2004 (164) ELT 387 (SC) in the Noticee s own case, setting at rest the dispute of classification of PCN (Pitch Creosote Mixture) . However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence has been disclosed in the adjudication orders to discharge the onus cast upon the Revenue to establish the correct classification of the impugned goods, as contended by them, and is covered by the Apex Court s decision in CCE Vs. SAIL (supra). In the case of Hindustan Ferodo Ltd. Vs. CCE (supra), the Hon ble Supreme Court has observed and held as follows: 3. It is not in dispute before us, as it cannot be, that the onus of establishing that the said rings fell within Item 22F lay upon the Revenue. The Revenue led no evidence. The onus was not discharged. Assuming therefore, that the Tribunal was right in rejecting the evidence that was produced on behalf of the appellants, the appeal should, nonetheless, have been allowed. 4. It is not the function of the Tribunal to enter into the arena and make suppositions that are tantamount to the evidence that a party before it has failed to lead. Other than supposition, there is no material on record that suggests that a small scale or medium scale manufacturer of brake linings and clutch facings would be interested in buying the said rings or that they are marketable at all. As to the brittleness ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
