BHAGSONS PAINTS IND. Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) BY the captioned appeal, the appellants has assailed the order of the Collector (Appeals). The Collector (Appeals) had held that Trimethylbenzene can neither be considered as a chemical nor a chemical formulation and, therefore, he upheld the order of the Assistant Collector and rejected the appeal of the appellants herein.

(2.) THE facts of the case are that the appellants received C -IX solvent under Chapter X procedure and converted it into a product which they called trimethylbenzene and claimed that the new product was a chemical formulation and, therefore, was entitled to the benefit of Notification No. 276/67 dated 21 -12 -1967. The Department took a sample of the product and sent it to its Laboratory for chemical examination; that the laboratory of the Revenue Department reported after conducting tests on trimethylbenzene and solvent C -IX; that the material trimethylbenzene obtained by fractional distillation of solvent C -IX can neither be considered as a chemical nor a chemical formulation. Accordingly, the lower authorities held that trimethylbenzene was neither a chemical nor a chemical formulation and was, therefore, not entitled to the benefit of Notification 276/67 dated 21 -12 -1967.

(3.) SHRI J.S. Agarwal, learned Advocate appearing for the appellants submits that in the process of distillation of solvent C -IX, a new product by distinct name as trimethylbenzene came into existence. He submits that the chemical change means a rearrangement of atoms, ions, or radicals of one or more substances resulting in the formation of new substance and in the instant case solvent C -IX was subjected to further distillation, a new product appeared and, therefore, since a distinct new commodity came into existence the process undertaken by the appellants amounted to the process of manufacture under Section 2(f) of the Central Excises Act, 1944. Learned Counsel submitted that Trimethylbenzene figures in the Chemical Dictionary, both Hawley's Condensed Chemical Dictionary as well as Me Graw Hill Dictionary of Chemistry. He, therefore, submits that solvent C -IX was a different product from the new product which is known as Trimethylbenzene. He also submits that no doubt, the Central Revenue Chemical Laboratory reported after testing the material, Trimethylbenzene is neither a chemical nor a chemical formulation; but he submits that no reasons for chemical authoritative literature has been sheet in support of this finding. He, therefore, submits that the benefit of Notification 276/67 may be allowed to the appellants.