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2019 (10) TMI 1036

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....y (Rs.) (6) Period (7) SCN Date (8) 1. E/503/05 SAIL O-I-O No. 10/Commr/BOL/05 dt:29.07.2005 23,52,93,089/- 1,00,00,000/- January, 11988 to February,1989, July 1991 to May 1999 and December1999 to June 2004 (23 SCNs) Involving 23 show cause notices 2. E/393/06 SAIL O-I-O No. 04/Commr/BOL/06 dt:27.03.2006 2,16,41,79 7/- 2,16,41,797/- July 2004 to March 2005 05.08.2005 3.  E/17/08 SAIL O-I-O No. 52- 53/Commr/BOL/07 dt:08.10.2007 2,89,97,644/- 2,89,97,644/- April 2005 to July 2005 (i).31.03.2006 for Rs. 1,20,58,609/- (ii) 09.11.2006 for Rs. 2,15,78,680/- 4. E/185/09 SAIL O-I-O No. 26- 27/Commr/BOL/08 dt:16.12.2008 12,66,68,929/- 12,66,68,9 29/- August 2006 to March 2008 (i) 28.08.2007 for Rs. 5,99,66,16 6/- (ii) 02.07.2008 for Rs. 6,67,02,3 13/- 5. E/74/10 SAIL O-I-O No. 103/Commr/ BOL/10 dt:05.11.20 09 and Corrigendum dt:15.01.2010 3,71,15,360/- 3,71,15,360/- April 2008 to November 2008 13.04.2009 6. E/198/11 SAIL O-I-O No. 75/Commr/BOL/10 dt:23.12.2010 5,85,07,328/- 5,85,07,328/- December 2008 to June 2010 (i) 03.12.2009 for Rs. 3,50,91,65 2/- (ii) 08.09.2010 for Rs. 2,84,15,....

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....ring 1987 SAIL, DSP started producing "Crude Tar Partially Distilled". The price circular of SAIL, Marketing Department, contains CTPD as a product and is marketed as such. Classification list of CTPD effective from 01.09.1987 also classified the product as coal tar in partially distilled form falling under Tariff Heading 27060090 (as tar distilled from coal and partially distilled). (iii) Prior to 01.09.1987, SAIL DSP in its Coal Chemical Plant used to manufacture Pitch Creosote Mixture ("PCM"), which is a distinctly separate product from CTPD. Though both are basically coal tar in partially distilled form, PCM having separate chemical composition as regards the extent of oil contents and distilled at separate temperature, has a distinctive separate commercial name and use from CTPD. The plant in which PCM used to be manufactured was totally abandoned by SAIL, which would appear from the photographs submitted at the time of hearing and taken on record. (iv) In the year 1989 the Department got the sample of CTPD analysed by the Chemical Examiner, Central Excise, Customs House, 15/1, Strand Road, Kolkata. The sample was drawn from SAIL vide Test Memo No. 1/89 dated 21.04.89. T....

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....representative of the assessee cannot and does not alter this requirement of law. (ix) In manufacturing CTPD, tar distilled from coal in Coke Oven Battery is allowed to be passed through a furnace having temperature of 300°C max. and subsequently through the distillation column. About 4% of the oiled vapour is only separated out from the distillation column which is fed to the fractional column and thus is obtained light oil and naphthalene oil. The remaining 96% of the coal tar is collected separately which is CTPD, meant for use as fuel. On the other hand manufacturing process of PCM which used to be manufactured earlier, the tar is passed through a furnace having temperature much higher at 330°C and above, resulting in vaporization of maximum amount of oil from tar. The said vaporized oil is fractioned/condensed and about 10% of the oil is collected separately as light oil and naphthalene oil and to some extent Creosote Oil. The remaining 20 to 22% of the oil are then mixed up in blenders with the residuals in the distillation column. The resultant product is termed as Pitch Creosote Mixture or PCM. The product PCM differs with the product CTPD in oil contents. CTPD h....

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....Tar Pitch. The Conference felt that, since the product goes out of the purview of TI II, it is rightly classified under Item 68 of CET. The matter was further examined in consultation with the Chief Chemist. The Chief Chemist observed that, for Coal Tar Pitch, there is an I.S.I. Specification (I.S. 216-1981) according to which Coal Tar Pitch is classified into four grades viz. Soft Pitch (Softening Point 45°C to 55°C), Soft Medium Pitch (Softening Point 58° to 68°C), Hard Medium Pitch (Softening Point 70° to 80°C) and Hard Pitch (Softening Point 82° to 92°C). The above Specification stipulates that the materials is obtained either (A) as residue of the direct distillation of Crude Tar by the high temperature carbonization of coal in coke events or retorts, or (b) by fluxing back such pitch residue with high boiling coal tar distillates to give the products the desired softening point. If the distillation of Coal tar Residuals is continued to the desired point, then the residue is known as "Straight-run-Coal tar Pitch". On the other hand, if the distillation is carried to a point where the residue is harder and more infusible than desired and is th....

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....dence to establish that CTPD manufactured by SAIL is pitch, justifying classification of the same under Tariff sub-heading 27081010. In the absence of such evidence being disclosed it cannot be said that the decision of the Supreme Court in SAIL's case (supra) covers the instant cases. It is thus conclusively established that the Revenue authorities have failed to discharge the onus cast upon them, as per settled principles of law, for justifying classification of the said goods under Tariff Heading 27081010 and not 27060090 as contended by SAIL and, consequently, there can be no alteration of the tariff classification of the said goods as declared and claimed by SAIL, as held by the Apex court in Hindustan Ferodo Ltd.'s case (supra). (xvi) It being thus established that classification of CTPD manufactured by SAIL is correctly classifiable on the Tariff Heading 27060090 and not Tariff Heading 27081010, it is also conclusively established that there has been no nonpayment or short payment of any central excise duty payable by SAIL in the instant case. Consequently, the impugned orders of the Commissioner are erroneous, untenable and unsustainable. The payment for interest made in....

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.... Tar is distilled from coal and from coal or from other minerals while pitch is obtained by blending with creosote oil or other coal tar distillates and both the goods are distinct and different in nature. Coal Tar Pitch is a residue product when the solvent has been completely extracted out of Tar whereas Pitch is the last residue in the process of destructive distillation of coal and in this process the distilled products like High and Low Naphtha, High Creosote Oils are obtained. Once a product is Pitch, it is no longer Tar. 6.3 The Hon'ble Apex Court in the case of the Commissioner of Central Excise, Bolpur Vs. SAIL (supra) has held that Pitch Creosote Mixture is a "pitch" and not a "partially distilled tar", hence it is classifiable under sub-heading 2708.11 of the Central Excise Tariff and not under Heading 27.06. "Tar" and "Pitch" are covered under separate tariff headings after 1.3.1986, "Tar" is classifiable under Heading 27.06 and Pitch under heading 27.08. "Pitch" is derived by distillation of "Tar" wherein the oils - Light oil, Naphthalene oil, Creosote oil and other residual oils are removed. Depending on the extent of oil removed "Pitch" may be "soft pitch" or "medi....

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....IL's case (supra) continues to be applicable. 6.5 SAIL, DSP has also contended that the test report of Chemical Examiner of Department clearly evidences the correctness of its classification of CTPD under Tariff Sub-heading 27060090. But we find that the said test report dated 21.04.1989 is not conclusive. Moreover, the periods involved herein also covers subsequent periods from May 1999 to November 2015, whereas the said test report is of 21.04.1989. 6.6 We also find that SAIL, DSP has contended that they are not having pitch plant and have submitted photographs to prove this. It is also their contention that they never manufactured pitch of any type since 1987 nor had any facility to manufacture pitch. Further, it is evident from the end use certificates received from SAIL's customers (i) M/s. Techmens Chemicals Pvt. Ltd., Kolkata dated 21.08.2008, (ii) M/s. Nithy Sai Chemicals (P) Ltd., Visakhapatnam dated 21.08.2008, (iii) M/s. Mahabir Coke Industries (P) Ltd., Kolkata dated 21.08.2008 and (iv) M/s. Himadri Chemicals & Industries Ltd. dated 02.09.2008 that they manufacture Coal Tar Pitch out of CTPD purchased from SAIL, DSP. Correctness of these contentions have not been ve....