1. These are four Revision applications [three filed by M/s. Savita Chemicals (P) Ltd., Bombay and the one filed by M/s. Sundershan Chemicals (I) Ltd., Bombay], before the Government of India, Ministry of Finance, which now stand transferred to this Tribunal under Section 35P of the Central Excise and Salt Act, 1944 and are treated as Appeals. The goods imported in all the four appeals are alike and common issue is involved in all these appeals which has arisen out of the consolidated order of the Appellate Collector, Bombay, so, we dispose of all these four appeals by this common order. Copy of the order will be placed in each file.
2. As per the contention of the Appellants in all these 4 appeals, they had imported consignments of liquid paraffin USP grade during the period September, 1978 to December, 1978 and the original assessment for the purpose of counterveiling duty had been done under Item 11(A) CET. The Appellants challenged the recovery of the counterveiling duty by filing refund claims on the ground that the goods are liquid paraffin of USP grade; the same could have only been assessable under Item 68 of the Central Excise Tariff and as such having been imported prior to 1st March, 1979, were not at all chargeable to additional duty of Customs,, The levy and recovery of additional duty of Customs under a wrong item when the same was not at all applicable, was, therefore, in excess of and/or without jurisdiction.
3. The claims were allowed partially by the Assistant Collector (Refunds) holding that the goods were correctly classifiable under Item 8 CET as against Item 11(A) CET under which the imported goods were earlier assessed.
4. Not satisfied with the orders passed by the Assistant Collector (Refund), the Appellants filed appeals before the Appellate Collector of Customs, Bombay, who rejected all the four appeals by his common Order Nos. S/49-76, 77, 78 and 83/80R, dated 5-8-1980.
5. Being aggrieved by the said Order of the Appellate Collector of Customs, Bombay, the Appellants preferred four Revision Applications before the Government of India which now stand transferred to this Tribunal and are treated as Appeals.
6. We have heard Shri V.N. Deshpande, Advocate, Counsel for the Appellants and Shri A.S. Sunder Rajan, JDR, for the Department and gone through the records.
7. Shri Deshpande, the learned Counsel for the Appellants, submitted that the Appellants drew the attention of the assessing authority towards the test certificate and other technical pamphlets of the manufacturers, which clearly indicated that the goods conformed to the USP tests-According to him, the ARCO Prime Oils pamphlets clearly show that ARCO Prime Oils meet or exceed the requirements set forth in the Food and Drug Administration's Food Additive Regulations. According to Shri Deshpande, from the invoices of the imported goods, it is evident that the goods imported was ARCO Prime 350. ARCO Prime 350 has passed the USP test of liquid paraffin of medicinal grade falling under Item 68 of CET and resultantly entitled to be passed free of counterveiling duty.
8. Regarding the observations of the Appellate Authority that the packages were not market as BP or USP, Shri Deshpande submitted that though the packages were not marked as BP or USP but the test certificate produced before the assessing authority clearly indicated that the goods were of USP grade. As the goods are liquid paraffin of USP grade, the same could have only been assessable under Item 68 of the Central Excise Tariff and having been imported prior to 1st March, 1979 were not at all chargeable for additional duty of Customs. He cited a decision of the Tribunal in the case of Navbharat Enterprises (P) Ltd. v. Collector of Customs, Madras [1983 ELT 1134] in support of his contention that liquid paraffin is not liable to duty under Item 8 or Item 11(A) Central Excise Tariff but is covered under Item 68 Central Excise Tariff.
9. Shri Sunder Rajan, Departmental Representative countered the arguments of Shri Deshpande and submitted that the test results recorded on the original bills of entry show that the product was having a viscosity of less than 100 seconds at 100F. The test result has not been challenged by the Appellants and hence the authority below has correctly assessed the same under Item 8 of Central Excise Tariff.
The literature produced cannot be relied upon in preference to the results obtained by actual testing which the Appellants have accepted as they have not contested it.
10. The goods imported have been shown in the Bills of Entry as "Petroleum Lubricating Oil - liquid paraffin ARCO Prime 350". The Department describes them as liquid paraffin whereas the suppliers describe them in their literature as ARCO Prime Oils grade 350. As per the Suppliers literature, ARCO Prime Oils are white, paraffinic base, food grade mineral oils, They meet or exceed requirements as se forth in the Food and Drug Administration's Food Additive Regulations, Section 121.1146 and 121.2589(9). On the basis of the description given by the suppliers in the literature of this product, the appellants claim that these goods conform to the USP test and hence classifiable under Item 68 CET as liquid paraffin of medicinal grade. Whereas Department says that as per the test report mentioned on the Bills of Entry, the product was having a viscosity of less than 100 seconds at 100F and, therefore, its proper classification would be under Item 8 CET.11. The point wh;ch requires determination is whether these imported goods are classifiable under Item 8 CET or Item 68 CET. If these goods are classifiable under Item 68 CET, no Counterveiling Duty is chargeable on these good; as they were admittedly imported prior to 1st March, 1979.
12. As- per Item of CET applicable at the relevant time, all the products which conform to the specifications for refined diesel oil as listed under this heading and which on test, were found to have a flame height of less than 10 mm but had a viscosity of less than 100 seconds by Red Wood-I Viscometer at 100F and which were free from bituminous substance would be assessed under Item 8 of CET. The Department while assessing the product at the time of the import did not find these consignments to be classifiable under Item 8 of CET and classified them under Item 11A -of CET. Later on, the Department changed the classification from Item 11A to Items 7 CET. In order to classify these products under Item 8 CET, it was incumbent upon the Department to show and establish that these goods on test were found to have a flame height of less than 10 mm but had a ciscosity of less than 100 seconds by Red Wood-I Viscometer at 100F and they were free from bituminous substance. The Department has failed to discharge this burden which lay upon them. Neither there is any separate test report in this regard nor the Bills of Entry before us, contain any such report to bring these goods under Item 8 of CET. The observations of the authority below in this respect that all the characteristics of a product mentioned under Item 8 of CET have been fulfilled are against the record. Had there been any such test report, existing at the time of the import of the goods bringing these goods within the purview of Item 8 CET, the Department would have assessed the goods under Item 8 CET instead of placing them under Item 11A CET for the purpose of additional Customs duty. This classifications, the Department changed later on to Item 8 CET without any basis. When these goods neither fall under Item 8 CET nor under Item 11A CET then the residuary item which remains available is Item 68 of CET. In order to show that these goods squarely fall under Item 68 CET, admittedly, the appellants produced the test certificate and other technical pamphlets of the manufacturers which clearly indicate that the goods imported conform to the USP grade. The mere fact that the packages were not marked as BP or USP does not mean that the imported goods could not be of BP or USP grade when the test certificates and the manufacturers' literature indicate so.
13. In the absence of any test report showing that these imported goods fall under Item 8 of CET, following our earlier decision in the case of Navbharat Enterprises (P) Ltd. v. Collector of Customs, Madras [1983 ELT 1134], we set aside the order of the authority below and accept all the appeals holding that the imported goods "liquid paraffin - ARCO PRIME OIL 350 Grade, are classifiable under Item 68 CET for the purpose of Additional Customs duty and not under Item 8 of CET. All these goods were, admittedly, imported prior to 1st March, 1979, so no additional Customs duty is leviable on these imported goods. Additional Customs duty, if already collected, be refunded to the Appellants within a period of 3 months.
14. I have perused the order proposed by my learned brother Shri Jain.
However, with respect, I find myself in disagreement with it. The following points, in my view, need to be kept in view in arriving at a proper decision on the classification of the goods involved in the present four appeals. They are : (i) It would appear from the Orders-in-Original passed by the Assistant Collector that the original bills of entry covering the goods showed that the product had a viscosity of less than 100 seconds at 100F. The bills of entry were apparently with the importers (the appellants) till the payment of duty but they would not seem to have contested the test results.
(ii) Before the Assistant Collector, the importers expressed a doubt about the test results and wanted the matter to be referred to the Chemist and wished to have a personal discussion with him. As desired, the matter was referred to the Chemist. They were given an opportunity by the Chemist to discuss the matter but they would appear not to have availed themselves of the opportunity. If there was any reason to doubt the results of the test conducted by the Customs Laboratory, as the importers would appear to have entertained, it was open to them to either discuss the matter with the Chemist and satisfy themselves about the correctness or otherwise of the test result or asked for a re-test of the goods in accordance with the established procedure. They seem to have not availed themselves of either of these courses.
(iii) Such being the circumstances, it would not be proper to discard the results obtained by the Chemist of the Customs Laboratory and opt for the specifications as stated in the literature furnished by the supplier of the goods or the certificate of analysis furnished by them. As would be evident from the Tribunal's decision in the Navbharat Enterprises [1983 ELT 1134] liquid paraffin could fall under one of three items of the Central Excise Tariff, namely, 8, 11A or 68. It is obvious, therefore, that the actual result of test of a particular parcel of liquid paraffin would determine the appropriate classification. It is not as if all liquid paraffins have the same specifications. The specifications can differ from parcel to parcel. It is, therefore, that the Customs Laboratory test results assume significance especially in the context of the appellants not choosing to contest them and not availing themselves of the opportunity for discussion with the Chemist or for a re-test.
(iv) The liquid paraffin in 1983 ELT 1134 would appear from the Order to have been not a proprietary product. In the present case, the goods are seen from the record to be a proprietary or branded product of Atlantic Richfield Company, USA. According to the Tribunal's Order inLubri-Chem Industries Pvt. Ltd,, Bombay v. Collector of Central Excise, Bombay - 1983 ELT 2408 - such branded liquid paraffin conforming to pharmaceutical grades would fall for classification under Item 14E of the CET ("Patent or Proprietary Medicine"). Of course, such a plea has not been taken up in these proceedings. But, the Order shows that Item 68 CET is not appropriate.
15. Considering the above circumstances, I do not see any reason to discard the Customs Laboratory test results. In this view of the matter, I do not see any reason to interfere with the impugned orders.
The appeals, therefore, fail and are rejected.