TaxTMI 
TaxTMI 
1990 (11) TMI 280
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....tral Excise Tariff. The appellants have been manufacturing these goods from 1979 onwards and have been availing full exemption under Tariff Item 68. They have also been filing their declaration every year from 1984 onwards. 2. During preventive check on 25-4-1986 on the suspicion that they were manufacturing cement, a sample was drawn and sent to Chemical Examiner, Kandla for test. Certain documents were also seized and investigation was initiated. A show cause notice was issued on 5-1-1987 by the Collector demanding a duty of Rs. 6,57,509.25 on 3,486.45 mts. tons of goods manufactured and removed during the period from 8-1-1982 to 31-3-1986. 3. In his report dated 17-6-1986, the Chemical Examiner had opined as under : "The sample is in ....
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....r I.S. 269 -1975 while that obtained on the sample is 9.3%" (Emphasis supplied). 6. A sample of the goods was also sent for test to the National Test House, Calcutta, who in their report dated 8-3-1989, reported as under : "The sample has been tested as per specification No. IS-4032 - 1968 for method of Chemical Analysis of Hydraulic Cement representing Ordinary Portland Cement to specification No. I.S. 269 -1976 with the results noted below: Results of Chemical Analysis i) Description Grey fine powder % by mass ii) Lime (as CaO) 58.45 iii) Soluble silica (as Sio2) 15.30 iv) Alumina (as A12O3) 6.78 v) Iron Oxide (as Fe2O3) 3.39 vi) Magnesia (as MgO) 1.25 vii) Loss on ignition 9.96 (as against the specified max. of 5.0) vi....
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.... Plaster of Lime, Pozzolanic lime, PCC Hydraulic Cement, Sagol etc. which are all exempt from payment of duty. These bills did not show that Ordinary Portland Cement was delivered to any Customer. (c) One grinding mill, one crusher and one pulverising machine are installed in the appellants' factory for the manufacture of their product 'Plaster of Lime'. These machines cannot manufacture Ordinary Portland Cement falling under Tariff Item 23 which has to fulfil the specifications of ISI-269 -1976 as indicated in MF (DR) Letter F. No. 1/5/70-CX. 4, dated 20-8-1970. (d) The goods in question did not conform to the prescribed ISI specifications so far as loss on ignition, and ratio of percentage of lime to percentage of silica, alumina and ir....
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.....T. 872 (BOM) 11. On the question of interpretation of Tariff Schedule and the requirement of construing not in the scientific or technical sense but as commodities are understood in commercial parlance, Shri Gujral placed reliance on M/s. Purbachal International and Another -1985 (21) E.L.T. 673 (Cal) 12. Summing up Shri Gujral stated that when the nature of goods is examined in the light of test results of the Chief Chemist and the National Test House, it would be clear that the goods in question were not Ordinary Portland Cement but 'Sagol' or 'Plaster of Lime' which were exempt from duty. Moreover, since no demand could be raised for the past period, on the basis of test conducted in 1986, the demand was illegal ab initio. 13. Shri L....
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....ow the minimum laid down for Ordinary Portland Cement in IS269-1967. In the circumstances, the exemption to Sagol is not applicable to Ordinary Portland Cement". 15. There is no doubt from the report of the Chief Chemist as well as that of the National Test House that the goods under dispute did not, on re-test, comply with the requirements of the ISI specifications in respect of important qualities like ignition loss and ratio of percentage of lime to silica. Hydraulic testing and compressive strength were not tested. It also appears from the letter of the Ministry of Finance itself that the compressive strength of 'Sagol' was far below the minimum laid down for Ordinary Portland Cement in the ISI specification. The appellants have drawn ....