1998(09)LCX0124
IN THE CEGAT, COURT NO. III, NEW DELHI
Ms. Jyoti Balasundaram, Member (J) and Shri V.K. Agrawal, Member (T)
COLLECTOR OF C. EX., BOMBAY
Versus
EASTERN AEROMATICS (P) LTD.
Final Order No. 754/98-C, dated 8-9-1998 in Appeal No. E/724/94-C
CASE CITED
Extrusion Processes Ltd. v. Collector — 1993(09)LCX0085 Eq 1994 (069) ELT 0144 (Tribunal) —Followed [Para 4]
Advocated By : Shri Satnam Singh, SDR, for the Appellant.
None, for the Respondent.
[Order per : V.K. Agrawal, Member (T)]. - The issue involved in this appeal preferred by the Revenue is whether the product “Vetiverol Residue” is classifiable under sub-heading 2942.00 of the Schedule to the Central Excise Tariff Act as approved by both the lower Authorities or under sub-heading 3301.00 of the CETA as claimed by the Department.
2. When the matter was called, none appeared on behalf of the Respondents, M/s. Eastern Aeromatics (P) Ltd. The notice issued to them has been returned by the Postal authorities. We heard the Ld. S.D.R. The Respondents were obtaining the impugned product “Vetiverol Residue” by distilling vetiverol oil. It is a residue which remains in the distillation vessel after vetiverol is distilled out. The Chemical Examiner, in his report dated 9-1-1991, stated that the sample is in the form of a black coloured thick pastry mess with characteristic odour; that it is a resinoid covered under sub-heading No. 3301.00. In adjudication proceeding, the Assistant Collector observed that the sample was never subjected to actual chemical analysis and the chemical examiner had given his report after visual observation and smelling. Assistant Collector approved the classification of the impugned product under heading 29.42 observing that the Vetiverol residue mainly contained Polymerised chemicals along with waste plant materials; that a resinoid is a perfumery material prepared from natural resinous substances by extraction with Hydrocarbon type of solvent as defined in Perfume and Flavour Materials of Natural Origin by Stephan Ariandar, 1960 Edition. On appeal preferred by the Department, the Collector (Appeals) upheld the order of the Assistant Collector, observing that the impugned product is quite different from resinoid and terpenic-by product as urged by the Department in appeal before the Collector (Appeals) which is obtained from essential oils by fractional material; that the Terpenic-by products are used for perfuming toilet soaps or for flavouring of food stuff whereas the Vetiverol residue is used for agarbatties. Hence this appeal by the Revenue. He also observed that classification of impugned product as Terpenic-by product was a new point and not raised in the show cause notice.
3. The Ld. SDR. reiterated the ground of appeal contained in appeal memorandum according to which no new ground was raised in appeal before the Collector (Appeals) since calling the product as “Terpenic-by product” was by way of identification of component present in the essential oil with a view to determine its correct classification; that according to Encyclopedia of Chemical Technology, the two most abundant natural sources of Terpenic oil are Turpenic and other essential oils; that fractional distillation is the most commonly used method for separating mixtures with their components. The reliance was also placed on page 473 of H.S.N. It was also contended that in any process of distillation both residue and the distillate can be called “By Products”; that description given in HSN is not comprehensive and it does not imply that the Terpenic by products are used only for perfuming of toilet soaps and for flavouring of food stuffs; that other uses are possible and the fact that the impugned product is used in the making of Agarbatties indicates that the residue contains fragrance of vetiverol oil. The Revenue has contended that the product is thus classifiable under sub-heading 3301.00 of CETA.
4. We have considered the submissions and perused the records. It is evident from the order dated 9-10-1991 of the Assistant Collector that the show cause notice was issued for classifying the impugned product only as “Resinoid” based on the report of the Chemical Examiner. In show cause notice it was not mentioned that the impugned product could be classified also as Turpenic by product. In view of these facts, the Collector (Appeals) was justified in holding that treating the product as a terpenic-by product was a new point incorporated for the first time in the application before the Collector (Appeals). It is settled law that no new point can be taken in review as the review under Section 35E of the Central Excise Act has to be confirmed to the points arising out of the order under (Review). This view was held by the Appellate Tribunal in the case of Extrusion Processes Ltd. v. C.C.E. Bombay - 1994 (069) ELT 144. Both the lower authorities have dealt with the manufacturing process of the impugned product which is obtained after subjecting the Vetiverol oil to distillation and it remians as a residue in the pot; that it is undistillable waste. We also observe from the order of the Assistant Collector that the Chemical Examiner had not carried out any chemical analysis of the impugned product and had given his report after visual observation and smelling. The Revenue has neither controverted the findings of the Assistant Collector nor adduced any further test report after the product has been examined chemically in support of their contention.
5. In view of these facts and circumstances, the Revenue has not substantiated their claim that the impugned product is classifiable under subheading 3301.00 of C.E.T.A. and we do not find any reason to interfere with the impugned order. Accordingly the appeal filed by the Revenue is rejected.
_______
Equivalent 1999 (107) ELT 208 (Tribunal)