TMI Blog2003 (6) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... n from duty in respect of compounded rubber. This is the period relevant to the dispute in these appeals. 2. As the appellants had not paid duty of excise on compounded rubber cleared for captive consumption for the above period (1-3-94 to 27-3-94), the Department issued show-cause notices to them. The notices were contested on numerous grounds. The Commissioner of Central Excise, in adjudication of the show-cause notices, passed order-in-original No. 27-29/97, dated 27-10-97 confirming demands of duty of Rs. 46,97,428/-, Rs. 46,77,469/- and Rs. 54,21,524/- against M/s. Ralson (India) Ltd., M/s. Metro Tyres Ltd. and Ms. Govind Rubber Ltd. respectively. The order of adjudication was challenged before this Tribunal by these appellants and the Tribunal, by order dated 26-11-99, remanded the matter for de novo adjudication vide 2000 (116) E.L.T. 177 (Tri.) = 2000 (36) RLT 64. The adjudicating authority, in the de novo proceedings, again confirmed the demands of duty as above as per order No. 86-88/CE/2001, dated 29-11-2001. The present appeals are against this order of the Commissioner. The so-called cross objections filed by the Department are only in the nature of arguments against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apparently no sign of deterioration could be observed." The percentage compositions of the three samples compared as under :- Ralson(I) Ltd. Metro Tyres Ltd. Govind Rubber Ltd. 1. Carbon Black 21.9% 20.9% 17.8% 2. Ash Content (Inorganic substance) 12.2% 26.0% 19.9% 3. Solvent Extract (Organic substances, additives) 10.9% 16.8% 14.4% 4. Sulphur Traces Traces Traces 5. Natural Synthetic Rubber Balance Balance Balance Upon the above retest reports, Shri R.K. Adhikari, Assistant Chemical Examiner, CRCL was cross-examined on behalf of the assessees. It was Shri Adhikari who had conducted the retests. After his cross-examination, additional written submissions were filed on behalf of the assessees, wherein support was claimed from the oral evidence of the Assistant Chemical Examiner as also from technical literature on Carbon Black, one of the constituents found in the test samples. More case law was also cited. Subsequently, there was the final hearing in the case, followed by the impugned order. 4. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd made by the manufacturer for captive consumption and not for external sale and such goods, produced and used captively, were not dutiable, if not marketable, notwithstanding the fact that the goods were covered by specific entry in the Central Excise Tariff Schedule. Again, in respect of odoriferous compound prepared and used captively in the manufacture of agarbathis, the Board held that such compounds, which were not sold out in the market by the manufacturer on account of trade secrecy, were not capable of being bought and sold in the market in the normal course of trade and therefore, such compounds were not excisable. The ratio of this clarification of the Board could be made applicable to the compounded rubber prepared and captively used by the assessees in the manufacture of tyres and tubes. In Final Order No. 993-1005/99-C, dated 16-11-99 [2001 (137) E.L.T. 1426 (Tri.)] in the appellants' own case, this Tribunal held that rubberized cotton tyre cord/fabric was not excisable as, according to affidavits and expert opinion, the goods were not marketable for want of shelf life and the Department could not show that the goods were marketed. The appeal filed by the Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in market. The tests and re-tests were conducted in CRCL to determine the composition and shelf life of the subject products. We have already reproduced both the (test and re-tests) reports. Both the reports says that the products are compounded rubber. Both says that there was no apparent sign of deterioration in the samples. The Commissioner has relied on these reports to record a finding that the products had enough shelf life. We do not find any valid reason to interfere with this finding of the Commissioner for the following reasons :- The appellants have no case that the first report of chemical analysis of the samples of compounded rubber drawn from the assessees' factories is not reliable, nor can they plead so. When the Joint Director of CRCL presented himself for cross-examination vis-a-vis the first report, the assessees choose not to cross-examine him, nor did they cross-examine the three Central Excise officers who had drawn the samples. Shri R.K. Adhikari, Assistant Chemical Examiner, CRCL, was cross-examined on behalf of the assessees. But this cross-examination was exclusively with reference to the re-test of the samples and had nothing to do with the first test. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants have not controverted the introductory paragraph of the CRCL Director's letter dated 6-7-2001 communicating the re-test results to the Deputy Commissioner of Central Excise, Ludhiana. That para had clearly indicated that the results reported were of analysis of the samples received in the CRCL under cover of the Deputy Commissioner's letter dated 2-3-2001. It's authenticity and veracity have not been put to scrutiny, nor even questioned, in this case. The re-test results showed traces of sulphur. The ACE deposed that the sulphur content was less than 0.1% only. The appellants have, again in their bid to show that the compounded rubber samples drawn from their premises did not contain sulphur and that the re-tests were not done on the correct samples, pleaded that the traces of sulphur found on re-test were on account of carbon black and not due to any addition of sulphur by them. This plea and the technical literature (on carbon black) cited in support thereof are of no consequence in view of our findings already recorded. CM. Blow's Rubber Technology and Manufacture (Second Edition) says, carbon blacks may contain very small amounts of sulphur depending upon the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marketability, it was argued that the compounded rubber was not marketable or marketed. Whether the goods were actually marketed is immaterial. What is to be found out is whether the goods were capable of being marketed as held by the Supreme Court and this Tribunal. It has been argued that each tyre-manufacturer has his own formula, process parameters, design of machinery etc. for manufacturing compounded rubber and that the goods so manufactured will not be suitable for any other tyre-manufacturer. Indian Rubber Institute Chairman's certificate has been relied on in this connection. The plea of trade secrecy has also been raised in this context. CBEC's circulars have been cited in this context. We are of the view that the results of the chemical tests conducted on the samples are enough to demolish these pleas. A comparison of the test results of the samples drawn from the factories of these three appellants shows no substantial variation in percentage composition. The argument is that each of these manufacturers has their own process parameters, design of machinery etc. for the manufacture of compounded rubber and that these are maintained as trade secret. They have, however, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ]. The shelf life was found to be in the range of 3-4 hours to 24 hours according to the manufacturers' affidavits and the opinion of Dr. S.N. Chakravarthy. Again, according to these affidavits and opinion, it was held that the intermediate product was not marketable. It was also found that the department had not proved that the product had actually been marketed. On this basis, the product was held to be non-excisable. As rubberized fabric and compounded rubber are admittedly two different intermediates in the process of manufacture of tyres and tubes of rubber, there is no claim in the instant case that the question of marketability of compounded rubber is covered by the above Final Order. The question then is whether the ratio of the above Final Order can be followed in this case. Our answer is in the negative. The crucial evidence of chemical test reports coupled with the oral evidence of the Assistant Chemical Examiner and the assessees' admission of transportation and transportability of the product in question clearly distinguish the instant case from the case of rubberized fabric dealt with in Final Order Nos. 993-1005/99 [2001 (137) E.L.T. 1426 (Tri.)]. They would also ser ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
