1999 (8) TMI 379 - AT - Central Excise

Tribunal: Emulsifiers qualify for tax benefit under Notification 101/66-C.E.

The Tribunal ruled in favor of the respondent, holding that the products classified as emulsifiers, despite also being organic surface-active agents, are ... Emulsifiers covered by Sl. No. 2 of the Table to Notification No. 101/66-C.E. Issues:Interpretation of Notification 101/66-C.E. - Whether certain products are covered by Serial No. 2 of the table to the notification. Whether the benefit of the notification can be extended to emulsifiers also classified as organic surface-active agents.Analysis:The dispute in this appeal revolves around the interpretation of Notification 101/66-C.E. and whether certain products fall under Serial No. 2 of the table to the notification. The Revenue contends that although the products in question are emulsifiers, they are also organic surface-active agents, thus disqualifying them from the benefit of the notification. Furthermore, the Revenue argues that emulsifiers should be similar to surface-active preparations mentioned in Serial No. 1 of the notification due to the use of the term 'other like preparations' in Serial No. 2.On the contrary, the respondent's advocate relies on a previous judgment by the Tribunal in the case of C.C.E., Pune v. M/s. Dai Ichi Karkaria Ltd., where it was held that Serial No. 2 of the notification includes emulsifiers and other similar preparations without the requirement that they must be surface-active preparations. The Tribunal in the cited case rejected the Revenue's appeal based on this interpretation.Upon careful consideration of both sides' arguments, the Tribunal in the current case finds that the first submission by the Revenue, claiming the products are organic surface-active agents and thus ineligible for the notification's benefit, is not valid. The Tribunal points out that organic surface-active agents encompass a broader category that may include emulsifiers, wetting out agents, and softeners. Merely being organic surface-active agents does not disqualify these products from the notification's exemption. Each substance, such as emulsifiers, has distinct characteristics and uses, justifying their eligibility for the notification's benefit.Additionally, the Tribunal notes that the earlier organic surface-active agents have already undergone duty payment, and the current products, namely emulsifiers, have emerged from them. Consequently, the Tribunal dismisses the Revenue's appeal, as there is no merit in the argument that the products, despite being organic surface-active agents, are not entitled to the notification's benefit.