TMI Blog2022 (7) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... perusal of the Test Report, it is found that the Chemical Examiner opined that it is Special Boiling Spirit. The word point is not mentioned in the Chemical Examiner Report. So, the finding of the Adjudicating authority at this regard is not correct and beyond the scope of Chemical Examiner Report. In any event, it is required to examine the Chemical analysis of the Test Report. It is well settled that the Chemical Examiner has only to give composition of the goods and not to comment on the classification of goods in any manner. It is well settled that while determining the classification of the goods, the broad description of the articles fits in with the expression used in the tariff is relevant. It is also required to examine the meaning of the product in the commercial parlance. The End Use of the goods would strengthen the conclusion that it is known in the market - In the instant case, the appellant purchased raw material Condensate (which is a regulated item) from Oil India Limited, a Public Sector Undertaking. In exercise of the Essential Commodities Act, 1955 ( 10 of 1955), the Ministry of Petroleum and Natural Gas issued Order dated 05.06.2000, which may be called ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest and imposition of penalty would be set aside on merit and on limitation. The confiscation of goods, imposition of redemption fine and recovery of credit are also set aside. Appeal allowed - decided in favor of appellant. - Excise Appeal Nos.75881 of 2017 & Excise Appeal No.76500 of 2019 - MISCELLANEOUS ORDER NO. 75195/2022 FINAL ORDER NO. 75385-75386/2022 - Dated:- 12-7-2022 - SHRI P.K. CHOUDHARY, MEMBER(JUDICIAL) AND SHRI RAJU, MEMBER(TECHNICAL) Shri Ananda Sen Shri I.Banerjee, both Advocates for the Appellant (s) Shri S.Mukhopadhyay, Authorized Representative for the Respondent (s) ORDER Since common issue is involved in these appeals and therefore, both the Appeals are taken up together for disposal. 2. The Appellant filed Appeal No. E/75881/2017 with application for condonation of delay of filing appeal against Order-in-Original No. 48/Comm./CE/SLG/2016-17 dated 06.02.2017 passed by the Commissioner of Customs, Central Excise and Service Tax, Siliguri Commissionerate, Siliguri. By Order No. M.A./75297/FO76679/2017 dated 21.08.2017, the Tribunal dismissed the appeal and COD Application on the ground that the Appellant had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of finished goods and raw materials were seized. The said Officers also drew the samples of finished goods Sikko Sol and Raw Materials on 17.04.2015. The partner, authorised Representative and other employees of the appellant firm were summoned and the statements were recorded in respect of shortage/excess of goods on different dates. 5. A Show Cause Notice dated 08.04.2016 was issued by the Commissioner of Central Excise Service Tax, Siliguri, proposing demand of Central Excise duty along with interest and to impose penalty on the basis of Chemical Test Report dated 13.01.2016 classifying Sikko Sol under tariff item 27101213 of the Central Excise Tariff Act, 1985. It has also proposed to confiscate the seized goods and recovery of inadmissible Cenvat Credit. By the impugned Order in Original dated 06.02.2017, the Commissioner of Central Excise Service Tax, Siliguri, confirmed the demand of Central Excise duty of Rs. 33.77,95,151.00 along with interest and imposed penalty on the clearance of Sikko Sol classifying under tariff item 27101213 of CETA, 1985. for the period from April 2011 to December 2015. It has also confiscated the seized goods and imposed redemption fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edule (hereinafter referred to as Rules for the Interpretation of Tariff). The Learned Advocate further submitted that the Adjudicating authority had not looked into the Chemical Test Report in proper manner in so far as it is mentioned in the Test Report that Sikko Sol is Special Boiling Spirit.But, the Adjudicating authority erroneously observed that the Chemical Examiner opined that it is Special Boiling Point Spirit. Therefore, the finding of the Adjudicating authority is beyond the Chemical Examiner s opinion. It is further submitted that the Chemical Examiner has to analyse the product and he cannot classify and/or define the product in any manner. 9. Regarding the classification of the Sikko Sol under tariff item No.27101213 as confirmed by the adjudicating authority, the Learned Advocate submitted that the Adjudicating authority had totally ignored Note 4 of Sub heading Notes of Chapter 72, which says that for the purpose of sub heading 271012 light oils and preparations are those of which 90% or more by volume (including losses) distil at 210 c. He drew the attention of the Bench to the Test Report No.01 dated 13.01.2016, where it is mentioned 90% by volume is distil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v) 2001 (134) E.L.T. 285 (Tri.-Kolkata) Shalimar Paints Ltd. - Vs- Commissioner of Central Excise, Calcutta. vi) 2002 (145) E.L.T. A242 Commissioner -Vs- Shalimar Paints Ltd. vii) 1994 (70) E.L.T. 141 (Tribunal) UNITEC Industries -Vs-Collector of Central Excise, Belgaum viii) 2007 (207) E.L.T. 161 (S.C.) Commissioner of C. Ex. Customs, Surat-II -Vs- Nirmala Dyechem ix) 2021 (375) E.L.T. 263 (Tri.-Hyd.) Biomax Life Science Ltd. - Vs- Commr. of Cus., C.Ex. S.T., Hyderabad. x) 2015 (324) E.L.T. 594 (Tri.-Mumbai) Aarti Drugs Ltd. -Vs-Commissioner of Central Excise, Thane-II xi) (31) G.S.T.L. 487 (Tri.-Kolkata) Calcutta Industrial Supply Corpn. -VS Commissioner of S.T., Kolkata. xii) 2019 (31) G.S.T.L. J147 (S.C.) Commissioner -Vs- Calcutta Industrial Supply Corporation. 12. The Learned Authorised Representative on behalf of the Revenue reiterated the findings of the adjudicating authority. He submitted that the Ld. Advocate on behalf of the Appellant only drew the attention of the Bench on Light Oil and Preparation. It is submitted that sub-heading No. 271012 would also cover Motor Spirit. It is mentioned in Supplementary Note (a), Motor Spirit Fl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken to include a reference to that article incomplete or unfinished, ***** ***** ***** ***** ***** ***** (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. ***** ***** ***** ***** ***** ***** 3. When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) mixtures, composite goods consisting of different materials or made up of different components, ********** ********** ********** ********** ( c) when goods cannot be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered by the said heading; (b) Where, however, the description of an article or group of articles is preceded by -- , the said article or group of articles shall be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has (c) Where the description of an article or group of articles is preceded by --- or ---- , the said article or group of articles shall be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has or -- 16. Additional Notes of Rules for Interpretation of Tariff defined the words heading , sub-heading and tariff item of Tariff. Precisely, a description in the list of tariff is accompanied by a 4-digit number heading , 6 digit number sub heading and 8- digit number tariff item 17. The issue involved in the present appeals is as to whether Sikko Sol would be classified under tariff item 27101213 of Central Excise Tariff Act, 1985 as held by the Adjudicating authority. Both the sides referred Chapter Notes of Chapter 27 of CETA, 1985 as reproduced below :- CHAPTER 27 Mineral Fuels, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her than benzene, benzol, toluene and toluol) 2710 12 19 Other 2710 12 20 --- Natural gasoline liquid (NGL) 271012 90 Other. ***** ***** ***** ***** ***** 18. Light oils and preparations is preceded by -- accompanied by a six-digit number sub heading 271012. The description of an article Other Special boiling point spirit is preceded by ---- , accompanied by eight digit number tariff item 27101213. As per third part of Note 1 of General Explanatory Notes, tariff item 27101213 shall be taken to be a sub-classification of sub-heading 271012. 19. While classifying Sikko Sol under Tariff item 27101213 the findings of the Adjudicating authority in Order-in-Original dated 06.02.2017 are as under :- In the Chemical report, the Chemical Engineer has opined that the two samples marked O1A and 01B of Sikko Sol, being the finished product, is a Special Boiling Point Spirit. On close perusal of the report I see that the difference between the temperatures at which 5% and 90% by volume distils is less than 60 c, the actual difference being 54 c for both the samples. As per Supplementary Note (a) to Chapter 27 of the Central Excise Tariff Special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On perusal of the Test Report, we find that the Chemical Examiner opined that it is Special Boiling Spirit. The word point is not mentioned in the Chemical Examiner Report. So, the finding of the Adjudicating authority at this regard is not correct and beyond the scope of Chemical Examiner Report. In any event, it is required to examine the Chemical analysis of the Test Report. It is well settled that the Chemical Examiner has only to give composition of the goods and not to comment on the classification of goods in any manner. 23. The Adjudicating authority while classifying Sikko Sol, a Special Boiling Point Spirit under tariff item 27101213, proceeded on the basis of Supplementary Note (a) of Chapter 27. It says that Special Boiling Point Spirits (tariff item 27101211, 27101212 and 27101213) means: - (a) light oils, as defined in sub-heading Note 4, (b) not containing any anti knock preparations, and (c) with a difference of not more than 60 c between the temperatures at which 5% and 90% by volume (including losses) distil; 24. Special boiling point sprits under tariff item 27101213 in Supplementary Note (a) is started with light oils, as defined in Sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Authorised Representative during the course of hearing submitted that Supplementary Note (a) is also indicating Motor Spirit . It is contended that the Test Report indicated Flash Point below 25 c, which is in conformity with Supplementary Note (a). On perusal of the impugned Adjudication Order, it is seen that the Adjudicating authority held that Sikko Sol is Special Boiling Point Spirit. We find that the submission of the Learned Authorised Representative is beyond the Show Cause Notice and the Adjudication Orders. In this context, the Learned Advocate of the appellant drew the attention of the Bench the words suitable for use as fuel in Spark Ignition Engine in Supplementary Note (a) in respect of Motor Spirit . It is submitted by the appellant that there is no material available on record that Sikko Sol is suitable for use as fuel in Spark Ignition Engine. On the other hand, the End User Certificate as submitted by the appellant to various authorities, it is established that Sikko Sol is nothing but Solvent and/or Thinner. The expression suitable for use has been considered by the Tribunal in the case of Cellulose Products of India Ltd Vs. C.C.E 1996 (82) ELT 147, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any evidence that Sikko Sol is used as Light Oil and/or motor spirit suitable for use in Spark Ignition Engine as mentioned in the Supplementary Note (a). So, there is no merit to classify Sikko Sol under tariff Item 27101213 of CETA 1985. The demand of duty along with interest and penalty by the impugned Orders classifying the product under Tariff No. 27101213 cannot be sustained. 30. It is observed that on perusal of the Show Cause Notice dated 08.04.2016 we find that only one page, paragraph nos. 2.19 and 2.20 out of 25 pages, have been dealt with classification of Sikko Sol under tariff item 27101213. Similarly, the finding of the Adjudicating authority in Order-in-Original dated 06.02.2017 is only half page as mentioned above, out of 28 pages, and the remaining pages are narrating shortage /excess of raw materials and finished goods as detected on 16.04.2015 and 27.04.2015, where the excess goods were confiscated and redemption fine of Rs. 1,57,592.00 was imposed and ordered for recovery of Cenvat Credit of Rs. 86,188.00 on shortage of goods. It would show that an extensive investigation was conducted in so far as several statements were recorded including Chief Material M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the investigation that the shortage was occurred at the time of distillation and mixing of the goods. It appears that the Enquiry Officer had not examined the contention of the appellant and the Adjudicating authority brushed aside the contention of the appellant as the explanation is not at all convincing. In our considered view, such finding of the Adjudicating authority cannot be sustained. 33. The Learned Advocate submitted that the demand of duty is barred by limitation as the extended period of limitation cannot be invoked. The Adjudicating authority observed that it is a mis- classification of the final product. The wrong classification of the product in the ER-1 return cannot be the ground for invocation of extended period of limitation. The Ld. Advocate relied on the decision of Biomax Life Science Ltd (supra) where the Tribunal held as under:- As far as the question of limitation is concerned, it is evident from the order of the adjudicating authority that the only ground on which the extended period of limitation has been invoked and upheld in this case is that the appellant has wrongly classified the products in their ER-1 returns and paid less duty. We find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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