Graphite India Ltd. Vs. Collector of Customs

1. This is an appeal against the Order of Collector of Customs (Appeals) who has rejected the appellants plea for benefit of exemption Notification No. 121/62, dated 13.6.62 in respect of coal tar and coal tar pitch imported by them. Under Notification No. 121/62 coal tar falling under Item 11 of the Central Excise Tariff was exempted from the whole excise duty leviable thereon. The appellants were denied the benefit of exemption and addl. duty was charged from the appellants on the imported goods. The short point that arises for our consideration is whether the coal tar pitch is covered under Tariff Item 11 and by the term Tar as set out in the said notification. The said tariff item for convenience of reference is reproduced as under:---------------------------------------------------------------------------Item No.Description of goods---------------------------------------------------------------------------II ASPHALT, BITUMEN AND TAR - (1) Asphalt and Bitumen (including cutback bitumen and asphalt) natural or produced from petroleum or shale) (2) Tar distilled from coal or lignite, or other mineral tars, including par tially distilled tars and blends a pitch with creosote oils or with other coal tar distillation products.--------------------------------------------------------------------------- The lower authority has held that tar and coal tar pitch are two separate commodities and the term tar used in the notification will not cover coal tar pitch. The lower authorities relied upon the definition of coal tar pitch and coal tar as set out in the order. They have held that the two have different compositions and uses and different characteristics. The appellants in their letter dated 16.9.86 received on 19.9.86 wanted the matter to be decided on merits on the basis of the submissions made in their appeal. Their pleas are: "(i) 'Coal Tar Pitch' obtained in the destructive distillation of Coal Tar, after all the oils and intermediate fractions have been removed. It comes under the Tar Group of Products falling under the CET Item 11.

(ii) That "Coal Tar Pitch" is covered by item No. 11(2) of the C.E. Tariff is evident inter alia from the fact that the Customs Authorities themselves have been treating the said product as falling under Chapter No. 27.08 of the First Schedule to the Tariff Act and have been making assessments of Customs duty accordingly.

(iii) It is also on record (copies of all relevant documents/materials in our supports furnished earlier) that in the case of similar product i.e. 'Coal Tar Pitch' manufactured by Bhilai Steel Plant of SAIL, a Govt. of India Undertaking, Central Excise Duty is not levied and/or collected. The CE authorities themselves have admitted the position that "Coal Tar Pitch" is covered by CET Item 11(2) and is exempt from duty in view of Notification No. 121/62-CE, dated 13.6.62." 2. Shri Sundar Rajan, the learned Department Representative pleaded that the notification should be strictly interpreted and stated that coal tar and coal tar pitch are recognised as separate entities in the trade and are produced by different processes of manufacture and are different products having their own specified uses. He drew our attention to the specifications in this regard given in Indian Standard Glossary of Terms relating to Bitumen and Tar (Second Revision) IS : 334 - 1982 where Tar has been described as under: "2.43 Tar - A viscous material having adhesive properties, obtained from the destructive distillation of certain types of organic material. The word 'tar shall be preceded by the name of the material from which it is produced, that is, coal shale, peat etc.

Its mode of production shall also be indicated." "2.31 Pitch, Coal tar - The black or dark brown, solid or semi-solid, fusible and agglomerative residue remaining after partial evaporation or fractional distillation of coal tar." He also filed photocopy of extracts from the Encyclopaedic Dictionary of Industrial Technology Materials, Processes and Equipment - David F.TVER - Roger W. Bolz. In this coal tar has been defined as under: "Coal Tar - A by-product in the carbonization of coal. The tar compounds are extremely complex and number in the hundreds.

The solid material, which is insoluble in Benzene, contained as colloidal and coarse dispersed particles and is known as "free carbon".

The composition of the tar is dependent on the temperature of carbonization and, to a lesser extent, on the nature of the cooking coal".

3. Further, it has been stated in the above reference that the end product of the distillation of coal tar is pitch. Thus it would be seen that coal tar and pitch are two separate entities. The appellants have stated in. Bhilai Steel Plant a similar product manufactured indigeneously was being given the benefit of exemption notification in question. We observe that the facts of that case are not before us nor we are bound by what has been done by the Central Excise authorities of Bhilai Steel Plant. In view of the above, we hold that coal tar and coal tar pitch are two separate commodities and benefit of notification available in respect of coal tar cannot be made applicable to coal tar pitch. In view of this, the appellants' claim is not maintainable and appeal is, therefore, dismissed.