TaxTMI 
TaxTMI 
2000 (10) TMI 781
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under :- "Though the Chapter Heading 38.08 refers to "disinfectants and similar products" in addition to insecticides, rodenticides, fungicides, herbicides, antisprouting products and plant-growth regulators, sub-heading 3808.10 specifically refers to insecticides, fungicides, herbicides, weedicides and pesticides, sub-heading 3808.90 has been introduced as sub-heading to cover other categories which includes rodenticides, disinfectants and similar products. Accordingly the correct classification for disinfectants would be sub-heading 3808.90 as held by the lower authority. As observed by the lower authority the decision of the Supreme Court was in the light of the erstwhile Tariff Item 68 read with Notification 55/75 relating to entry No. 18 and not under Chapter Heading 38.08 which specifically mentions 'disinfectants' separately from other categories like insecticides etc. Since disinfectants are separately mentioned and the Chapter sub-heading 3808.10 covers only insecticides, fungicides, herbicides, weedicides and pesticides, the disinfectants would fall only under Chapter sub-heading 3808.90. The order passed by the lower authority is correct as per the Tariff sub-heading....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 8. The position seems to have changed with the decision of the Honourable Supreme Court in the case of Bombay Chemicals Pvt. Ltd. v. Collector of Central Excise, Bombay reported in 1995 (77) E.L.T. 3 (S.C.) wherein the Honourable Supreme Court has held that disinfectant fluids produced from phenolic compounds and high-boiling tar acid, were entitled to the exemption under the erstwhile Notification No. 55/75 (Serial No. 18). The said judgment was either not in existence at the time of delivering the judgment relied upon by the learned SDR or was not placed before the Bench. The contention raised by the learned SDR that the Supreme Court's decision was given in the context of the erstwhile Tariff Item and the same would not apply to the new Tariff, is not appreciable inasmuch as a similar contention raised on behalf of the Revenue was considered by the Bench in the case of Grand Chemical Works and was rejected. In the said judgment of Grand Chemical Works, it was also observed that the Tribunal's decision in the case of Ambey Laboratories holding 'Phenol' as not falling under sub-heading 3808.10, was overruled by the Honourable Supreme Court in Civil Appeal Nos. 4280-81/199....
X X X X Extracts X X X X
X X X X Extracts X X X X
....scription under Heading No. 38.08 but were not insecticides, fungicides, herbicides, weedicides and pesticides. The appellants sought to change the classification to sub-heading No. 3808.10 on the ground that their product was similar to the one which was the subject matter of Supreme Court's decision in Bombay Chemical Pvt. Ltd. v. Collector of Central Excise, Bombay - 1995 (77) E.L.T. 3 (S.C.). 13. Before coming to the Supreme Court's decision in the case of Bombay Chemical Pvt. Ltd., let us first examine the product in question. The product Pheneol had been referred to as a powerful deodorant. According to the condensed Chemical Dictionary 9th Edition, revised by Gessner G. Hawley at page 260, "deodorant" is a substance used to remove or mask an unpleasant odor. It may or may not have a distinctive odor of its own. According to McGraw Hill Dictionary of Scientific and Technical Terms IInd Edition at page 428, it is a substance used to remove, correct or repress un-desirable odors. World Book Dictionary at page 558 defines it as a preparation that neutralises odors specially bad odors. Thus, the description of the product as deodorant signifies its odor neutralizing ef....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cence under that Act of 1968. From the list of insecticides given in the Schedule annexed to the Insecticides Act, it is seen that only Phenyl mercury acetate, Phenyl mercury chloride, Phenyl mercury urea, were among the phenyls which were covered within the meaning of insecticides. As per the cautionary note in Schedule 'O' under Rule 126 of the Drugs and Cosmetics Rules 1945, mercury compounds were strictly excluded from all grades of disinfectant fluids. As per the product label also, mercury compounds were not added in the product. Thus, it is seen that the product in question was not recognised as insecticide which included pesticides. 16. According to McGraw Hill Dictionary of Scientific & Technical Terms IInd Edition, 'pesticide' is a chemical agent that destroys pests also known as biocide (page 1193). According to the Concise Chemical and Technical Dictionary III enlarged Edition by H. Bennett, pesticide is a product that is used as an insecticide, fungicide, acaricide (miticide), herbicide, rodenticide, bacteriacide, parasiteicide, nematicide and others used against pests (page 797). In para 6 of the Supreme Court's decision in the case of Bombay Chemical Pv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt criteria laid-down by the Supreme Court for considering something to be a pesticide or insecticide has not been fulfilled by the disputed product, the phenyle could not be held to be a pesticide or insecticide. 19. The Supreme Court's decision was delivered in the context of the erstwhile Central Excise Tariff and involved the interpretation of exemption notification. Under the new Central Excise Tariff, the matter had come-up in the case of Rosin & Terpentine Factory v. CCE, Chandigarh - 1997 (94) E.L.T. 187 (Tribunal) and the Tribunal had held as under :- "In these two appeals filed by M/s. Rosin and Terpentine Factory, the point for determination is whether the phenyle was medicament as claimed by the appellants or was a disinfectant as classified by the Revenue. The Assistant Collector of Central Excise Chandigarh who had adjudicated the matter, had held that keeping in view the function, use and description of the product in question it was classifiable under Heading No. 3801.90 as disinfectant. The order passed by the Assistant Collector of Central Excise, Chandigarh was confirmed by the Collector of Central Excise (Appeals) Chandigarh who in para 5 of her order....
X X X X Extracts X X X X
X X X X Extracts X X X X
....euticals Pvt. Ltd. v. Collector of Central Excise - 1991 (53) E.L.T. 140 (Tribunal), the Tribunal has held that phenol is a disinfectant and was classifiable under sub-heading No. 3801.90 (corresponding to Heading No. 3808.90). In the case of Nath Peters Pharmaceutical Ltd. v. CCE, Hyderabad - 1995 (75) E.L.T. 182 (Tribunal), it has been held that the liquid phenyl was disinfectant and was classifiable under sub-heading No. 3808.90. 20. Binding nature of the circulars issued by the Board has been emphasised by the Hon'ble Supreme Court in a catena of decisions. In Collector of Central Excise, Patna v. Usha Martin Industries - 1997 (94) E.L.T. 460 (S.C.) = 1997 AIR SCW 3795, the Supreme Court had held that Section 37B of the Central Excise Act, 1944 enjoins on the Central Board of Excise & Customs a duty to issue such instructions and directions to the excise officers as the Board considers necessary or expedient "for the purpose of uniformity in the classification of excisable goods or with respect to levy of duty excised on such goods". It is true that Section 37B was inserted in the Act only in December, 1985 but that fact cannot whittle down the binding affect of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rd is of the view that the product 'Phenyl' marketed as disinfectant would be classifiable under sub-heading No. 3808.90 of Central Excise Tariff attracting Central Excise duty @ 18%. 5. All pending disputes/assessments on the issue may be settled in the light of these guidelines." In the case of Ranadey Micronutrients v. CCE - 1996 (87) E.L.T. 19 (S.C.) the Supreme Court had held that there can be no doubt that the circulars issued by the Central Board of Excise & Customs are binding on the Central Excise Officers and the circulars are issued when the Board considers it necessary or expedient so to do to achieve uniformity in classification of excisable goods and the levy of excise duty thereon and the central excise officers were obliged to observe and follow those orders/instructions and directions. Any decision contrary to the Board's Circular No. 446/12/99-CX dated 17-3-1999 will go against the spirit of the Supreme Court's decision referred to above and it will lead to divergence practices and will not be in the interest of administration of justice. 21. The appellants have referred to the Tribunal's decision in the case of Grand Chemical Works v. Collec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....known as Phenyl) disinfectant fluid was classifiable - Under sub-heading No. 3808.l0 with benefit of Notification No. 14/94-C.E., dated 1-3-1994 as proposed by the Member (J) OR Under sub-heading No. 3808.90 with no benefit of Notification No. 14/94-C.E., dated 1-3-1994 as proposed by the Member (T)." 25. Shri K.K. Banerjee, learned Advocate for the appellants, argues that "Pheneol" stands classified under sub-heading 3808.10 as per the judgment of Hon'ble Supreme Court in the case of M/s. Bombay Chemical Pvt. Ltd. v. C.C.E., Bombay : 1995 (77) E.L.T. 3 (S.C.), which was relied upon by the Tribunal in the case of M/s. Grand Chemical Works v. C.C.E., New Delhi : 2000 (117) E.L.T. 730 (Tribual) = 1999 (35) RLT 31 (CEGAT). The learned Advocate submits that the judgment of the Hon'ble Supreme Court was in the context of the old Tariff but the position is unaltered in view of the subsequent judgment of the Apex Court in the case of Ambey Laboratories in Civil Appeal Nos. 4280-81/1991 with Civil Appeal No. 4279/91 delivered on 18-2-1997 [2000 (131) E.L.T. A86 (S.C.)] overruling the Tribunal's Order in Ambey Laboratories reported in 1992 (57) E.L.T. 330 wherein the Tribun....