TaxTMI 
TaxTMI 
1995 (7) TMI 177
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....products, which are said to have been produced by the assessee, while manufacturing insecticides/pesticides viz, Phosalene, Ethion and Phorate. The department has alleged that the following intermediate products are produced by them namely :- (i) Chloro Methyl Chloro Benzoxenolene (CMCB) (ii) Diethyl Dithio Phosphoric Acid (DFDTP) (iii) Sodium Salt of DEDTP 3. The department's contention is that the insecticides/pesticides fall under Chapter sub-heading No. 3808.10 of Central Excise Tariff Act, 1985 and attract nil rate of duty. However, the intermediate products are classifiable under Chapter sub-heading No. 2942.00 and are chargeable to duty at 15% ad valorem (BED) upto February 1988 and at 15% ad valorem (BED) and SED 5% of BED from 1-3-1988 onwards. It has been stated that DFDTP was wholly exempted from 1-3-1988 under Notification No. 43/88, dated 1-3-1988 and goods falling within Chapter 29 when used in the manufacture of pesticides/insecticides (CMCB and Sodium Salt of DFDTP in this case) and were wholly exempted under Notification No. 33/91, dated 25-7-1991. However, it is stated in the show cause notice that the duty liability on the products for the period....
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....had also submitted that they did not have any motivation factor to evade duty and also they were under the bona fide belief that the intermediates were not excisable, hence it was their plea that the extended period under Section 11A cannot be invoked. 6. Before the Learned Collector during the personal hearing, the appellants had relied on several judgments in their support and also a letter from Indian Institute of Chemical Technology and a certificate from Pesticides Association of India. The Learned Collector, however, did not agree with the contention. He has held that so long as the intermediate products in question become identifiable organic compound then they are required to be classified under Chapter Heading 29.42 and the duty liability is required to be discharged. He has held that the tariff heading does not specify that the product should be chemically pure or otherwise. He has further held that the evidence produced by the appellants did not eliminate the capability of being marketable despite its transient shelf life. He has rejected the evidence produced by the appellants and has held that the "evidence led at best establish that the intermediate products h....
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.... (2) Diethyl dithio phosphoric acid (3) Sodium salt of diethyl dithio phosphoric acid In fact as per the information we have from organo phosphatic technical grade pesticides manufacturers most of the above materials have limited shelf life and are neither traded nor sold. for PESTICIDES ASSOCIATION OF INDIA EXECUTIVE DIRECTOR Dated : 20-1-1994" The letter issued by P.R.K. Agencies dated 1-4-1992 which is reproduced hereinbelow:- "P.R.K. AGENCIES (Dealers in Pesticides and Fertilizers) 47, M.K.STREET, TUTICORIN - 628 001. 1 April 1992. TO WHOMSOEVER IT MAY CONCERN We are dealers in various pesticides for many leading Companies. We have been selling formulators from these companies and in our years of business we have not come across the product CHLORO- CHLORO- BENZEXAZOLONE as a formulant product for direct consumption by the farmers. for P.R.K. AGENCIES, Partner." 9. Referring to these materials, the Learned Advocate submitted that the intermediate product was not known in the market and it did not [have] a shelf life. He also submitted that other demands raised by the other collectorates had been dropped. In this context, he relie....
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.... iii. Jaypee Rewa Cement v. Collector of Central Excise - [1994 (50) ECR 210] iv. TISCO v. Union of India & Others - [1988 (33) E.L.T. 297] 12. Countering the arguments, the Learned Advocate submitted that mere fact that these items are mentioned in chemistry book is not sufficient to hold that the products are known in the market. He submitted that the burden of marketability was on the Revenue and the Revenue had miserably failed to prove and discharge its burden on marketability. He also submitted that mere mention of the name of the goods in the tariff schedule is not sufficient to discharge the burden of marketability. Therefore, he submitted that the question of shelf life is required to be gone into by the department and the impugned order was required to be set aside. 13. We have carefully considered the submissions made by both the sides and have perused the records. We notice that the appellants have produced enormous evidence besides the opinion of two experts as well as letters from the dealers. We notice that the Learned Collector has not applied his mind on the evidence produced by the appellants. The department has not placed any....