MEHTACHEM INDUSTRIES Vs. COLLECTOR OF C. EX.

JUDGEMENT

(1.) IN these two appeals, the common issue involved is whether the Petroleum Jelly is being manufactured by the Appellants Company M/s. Mehtachem Industries at the intermediate stage of manufacture of Boroquein Antiseptic Cream. As both the appeals arise out of a common order, the same are being disposed of by one common order.

(2.) BRIEFLY stated the facts are that the Appellant Company manufactured Boroquein Antiseptic Cream. They were purchasing Petroleum Jelly from the Market and using the same in the manufacture of their final product up to 9 -10 -1986. Thereafter they started using Micro Wax, Paraffin Wax and liquid paraffin oil in place of Petroleum Jelly. The Chemical test of the final product revealed that the cream contained Tankan Amla, Jasat Bhasma, Lanolin and soft Paraffin base; that soft paraffin is synoymus to Petroleum Jelly. The Collector, Central Excise, therefore held in the impugned order that the Appellant Company had manufactured Petroleum Jelly which was an excisable goods and chargeable to duty for the period from 1 -9 -1987 to 31 -8 -1992. He also imposed a penalty of Rs. 6000/ - on the Appellant company and Rs. 5000/ - upon Shri Ashok Harilal Mehta, Partner.

(3.) SHRI Devan Parikh, ld. Advocate, submitted that Shri Ashok H. Mehta, in his statement dated 21 -9 -1991 gave the process of manufacture of antiseptic cream. According to the statement, liquid paraffin oil was heated into which Paraffin Wax , Micro Wax and Anyhydrous Lanolin were added which when heated became liquid; the liquid was then transferred to Planatory mixture and Tankan Amla and Jasat Bhasma were added; that all the above were continuously mixed in planatory mixture and before it was solidified it was transferred to plastic basket; that after it was completely cooled, it was fed to tube filling machine where the tubes were fitted. He further submitted that it was apparant from the process of manufacture that at no stage Petroleum Jelly in identifiable form came into existence; that the only product that came into existence was antiseptic cream; that prior to the cream coming into existence, the bulk of raw materials is only in liquid form and in the form of mixture; that the claim of the department that Petroleum Jelly came into existence at an intermediary stage of production was contrary to the facts and the inference to that effect was sought to be drawn merely from the test report. He contended that unless a product known amongst the commercial community and identifiable as such comes into existence, it can not be regarded as goods. In support of his contention he relied upon the following decisions: