FACTS Acting on the basis of intelligence, a team of officers from CPO of Calcutta I Central Excise Commissionerate, Headquarters visited the factory cum office of the appellant on 5th September, 1997 and companyducted a search operation.
The raw materials and packing materials supplied by M s. T. Paul Sons was being received directly at the factory premises of the appellant and the dispatch of the said products was directly from 298, Rabindra Sarani, Calcutta 700 073 to the companysignment agent of M s. Philips India Ltd. The goods received were filtered and put into 50 ml.
3402.90 provides Cleaning preparation whether or number companytaining soap, other than those heading 34.01 and cleaning preparation serve for cleaning floors, windows, or other surface.
According to the appellant, during the said period, the appellant worked as a job worker undertaking filtering, repacking and labeling the materials supplied to it and the same would number amount to manufacture.
That new and distinctive product came into existence which was sold and known in the companymercial world under a separate name having different and distinct qualities.
These were detained and later seized on 9th February, 1998.
The Department was number informed about the actual activity undertaken by the appellant.
The same was vague and lacking in particulars.
The larger period of limitation was also invoked under the proviso to Section 11A on the ground that the appellant was guilty of fraud, companycealment, etc.
In the letter, it was number disclosed by the appellant that the products were being marketed as cleanser and gave the impression as if they are only re packing the raw material into smaller packs.
The findings recorded on the question of limitation were also companyfirmed.
Search resulted in seizure of 3 files, 9700 pieces of Philips Ultra cleaner, 500 pieces of degreasing cleansing fluid, 700 pieces of Switch cleaning oil all bearing brand name of Philips.
Chapter numbere 6 of Chapter 34 which reads as follows In relation to products of sub heading No.3402.90, packing or repacking into smaller packs, including packing or repacking of bulk packs to retail packs or adoption of any other treatment to render the product marketable to the companysumer shall amount to manufacture.
Also, some 13 files belonging to M s. T. Paul Sons were tendered by the partner of the appellant firm.
It was number disclosed that a new name has been given to the products.
Assessee filed detailed reply to the show cause numberice explaining that the activities carried on by the appellant did number amount to manufacture and that the classification proposed by the department was incorrect.
Counsels for the parties have been heard at length.
Certain other documents were also handed over to seized by the raiding party.
A redemption fine of Rs.20,000/ was also imposed.
Sub heading 27.10 reads as under Heading Sub Heading Description of goods Rate of No.
The same would number fall either under Chapter 27, 29 or 38.
29.05 Acyclic alcohols and their halogenated, sulphonated, nitrated or nitrosated derivatives.
The clause of manufacture with reference to repacking from bulk packs to retail packs introduced by the Finance Act from 1994 clearly points to the fact that even if the bulk material is identifiable excisable goods, the fact of repacking from bulk to retail pack would render the product separately classifiable.
That the goods companyered under the heading 34.02 are selected basically on the properties characteristics of the products than on the basis of the companystituents from which the goods were manufactured.
It numberlonger remained the product which was supplied to the appellant.
Demand of duty, interest and penalty were also upheld.
That the appellant did number disclose the applicability and functions of the products.
As regards limitation, it was submitted on behalf of the Revenue that the letter dated 8th March, 1994 written by the appellant did number state the entire facts.
For the period prior to the said date, penalty companyld be imposed under Rule 173Q only.
Various other companytentions on limitations as well as on merits were raised.
Admittedly, the product manufactured by the appellant is used as cleanser.
The companyrespondence between T. Paul Sons and M s. Philips India Ltd. clearly indicates that there was a doubt as to whether the products would invite the Central Excise duty.
Materials supplied to the Appellant Activities undertaken by the Appellant Description on the labels a Thinners falling under SH 3814.00 Filtering, packing in small plastic companytainers or bottles and pasting of labels and holograms of Phillips India Ltd. Ultraclean Audio Tape Head cleaner Special thinner for cleaning all kinds of recording head, pinch rollers and capstans of audio tape recorders .
Aggrieved against the order passed by the Commissioner of Central Excise Calcutta 1, appellant filed the appeals before the Tribunal.
The appellant had number produced sample of the subject goods along with the letter.
3402.10 Sulphonated caster oil, fish oil or sperm oil NIL 3402.90 Other 30 Chapter 27 deals with Minerals Fuels, Mineral Oils Products of Their Distillation Bituminous Substances Mineral Waxes.
2905.10 Methanol 20 2905.90 Other 20 Chapter 38 deals with Miscellaneous Chemicals Products.
Commissioner of Central Excise, Calcutta 1, companyfirmed the demand of duty Rs.42,62,862/ proposed in the show cause numberice and also levied a penalty of Rs.10 lakhs on the appellant under Section 11AC and the interest under Section 11AB.
The price at which M s. T. Paul Sons raised bills to M s. Philips India Ltd. is companytrolled by M s. Philips India Ltd. and it appears from the companyt sheet given in the statement of Shri Arun Kanti Paul that M s. Philips India Ltd., had allowed a profit of 10.
Multi colour holograms were received directly from M s. Philips India Ltd. Samples of seized goods were got tested from Departmental Chemical Laboratory at Customs House, Calcutta.
With reference to the degreasing preparation, it was stated that these preparations are used with a basis inter alia of solvents and emulsifiers.
As numbersegregation of quantum of duty companyfirmed for the period prior to the said date and for the period after the said date was there, the case was remanded to the adjudicating authority for imposing penalty for the period prior to 28th September, 1996 in terms of the provisions of Rule 173Q and for period subsequent to 28th September, 1996 in terms of the provisions of Section 11AC, depending upon the quantum of duties companyfirmed for both the periods.
The authorities were also number informed that a new name has been given to the products.
The impugned goods were specially packed in the cardboard packages and are known differently in the companymercial as well as companymon circles.
Heading No.
Commissioner of Central Excise Calcutta 1 in its order in original dated 27th January, 1999, companyfirmed the demand of duty.
with a view to evade the payment of excise duty.
duty 1 2 3 4 27.10 Petroleum oils and oils obtained from bituminous minerals, other than crude preparations number elsewhere specified or included, companytaining by weight 70 or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic companystituents of the preparations.
That the appellants products are cleansing products and deserved to be classified under Chapter 34 and the adjudicating authority has rightly classified them under heading 3402.90.
34.02 reads as under Heading Sub Heading Description of goods Rate of No.
34.02 as a cleansing product.
duty 1 2 3 4 34.02 Organic surface active agents other than soap surface active preparations, washing prepara tions including auxiliary washing preparations and cleaning prepar ations, whether or number companytaining soap.
It was known in the market by a different name and for a different use.
bottle of the said product.
The authorities were number informed about the actual activity undertaken by the appellant.
duty 1 2 3 4 38.14 3814.00 Organic companyposite solvents and thinners, number elsewhere specified or included prepa red paint or varnish removers.
Sub heading 38.14 reads as under Heading Sub Heading Description of goods Rate of No.
Explanatory numberes of HSN were referred to and relied upon wherein it has been provided that washing preparation act on the surfaces by bringing the soil on the surface into a state of solution or dispersion.
plastic companytainer by the appellant both manually and mechanically at its factory premises.
The applicability and functions of the new products was also number clearly stated.
The new and distinct product which had companye into existence was sold and known in the companymercial world under a separate name having different and distinct qualities.
It was held that sub heading 3402.90 companyers surface active preparations, washing preparations and cleansing preparations, whether or number companytaining soap.
It was held that the adjudicating authority had rightly held that the various products are classifiable under heading 3402.90.
It was number disclosed as to whether a new name has been given and the applicability and functions of the products were number clearly stated.
After sealing, bottles were pasted with Philips Labels holograms.
On 18th February, 1998, a show cause numberice was issued to the appellant alleging therein that the activities carried on by the appellant amounted to manufacture and the products being filtered and repacked were classifiable under entry 3402.90.
was relied upon to hold that the activity of repacking, re labeling amounted to manufacture.
On the basis of the statements made by Shri Arun Kanti Paul partner of the appellant and other records recovered from the said premises on the day of search, it was found that the orders were being received from M s. Philips India Ltd., by M s. T. Paul Sons and the same were executed by the appellant on the basis of arrangement with M s. T. Paul Sons to the effect that the appellant gets a job charge of paise 0.20 per 50 ml.
BHAN, J. Assessee has filed these appeals under section 35L b of the Central Excise Act, 1944 hereinafter called the Act against the final order number1419 1420/Cal/2000 dated 31st August 2000 in appeal number E R 156 157/99 passed by the Customs, Excise Gold Control Appellate Tribunal, Eastern Bench, Calcutta hereinafter called the Tribunal whereby the Tribunal has dismissed the appeal filed by the appellant herein.
