2008 (7) TMI 753

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.... in so far as it has dropped the penalty of Rs. 2,50,000/- imposed under Rule 173Q and to restore the order of original authority in this regard. The appeal No. 3643/05, filed by the assessee, is against the demand of demand upheld by the Commissioner (Appeals). 2. Heard both sides. 3. The relevant facts in brief are as follows :- (a)     The assessee manufactures fat liquors and claimed the same as lubricating preparations for the purpose of availing the benefit of Notification 12/94 as amended. (b)     The claim of the assessee has not been accepted by the original authority who confirmed the demand of duty amounting to Rs. 6,65,961/- and imposed penalty of Rs. 2,50,000/- (c....

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....ty rate 34.03 3403.00 Lubricating preparations (including cutting oil preparations, bolt or nut release preparations, anti-rust or anti corrosions preparations based on lubricants) and preparations of a kind used for the oil or grease treatment of textile materials, leather, furskins or other materials, but excluding preparations, containing as basic constituents, 70% or more by weight of petroleum oils or of oils obtained from bituminous minerals. 20% 6.2 The Notification 12/94 as amended prescribes concessional rate of duty only for lubricating preparations. Careful reading of the tariff indicates that the Chapter heading deals with two categories of items namely, lubricating preparations and second category being prep....

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....s nothing but lubricating preparation. The first part of the definition lubricating preparation includes cutting oil preparations, bolt or nut release preparations, anti-rust or anti-corrosions preparations based on lubricants. The first part of the definition did not specify the nature of end-use unlike the second part of the definition. The second part of the definition stands in a distinct form and refers to preparations of a kind used for the oil or grease treatment of textile materials, leather, furskins or other materials. In the present case, use of preparation are in the nature of softeners of leathers. The original authority as well as Commissioner (Appeals) have held that fat liquors fall under the second category as they are used....