Judgment:
1. This is an appeal against the order of the Commissioner of Central Excise, Mumbai, confirming a duty demand of Rs.35,73,437.17 on Polyethylene Glycol 300 to 600 (different grades), as a result of holding that they were classifiable under CETA sub-heading 3907.20, rejecting the appellant's contention that they were residual products of chemical industry under CETA sub heading 3823.00 and confiscating goods with option to redeem on payment of fine of Rs. 1,23,250/- and confirming the duty demand on the seized goods, and imposing penalty of Rs.35 lakhs on the appellants herein.
2. None appeared for the appellants in spite of notice and hence, we have heard the Ld. SDR and perused the records.
3. We note that the products 400P and 600P were tested and found to be an Organic Polymeric Compounds (Polyethylene Glycol) having more than five monomers. As regards the products 300P and 350P, Shri Nene, Excise Officer of the appellant's company has clearly stated they were nothing but Polyethylene Glycol. Since the goods in question have more man five monomers, they are classifiable under Chapter 39 of the schedule to the CETA 1985, by virtue of Note 3 (c) to Chapter 39 which states that "heading No. 3901 to 3911 apply to goods of a kind produced by chemical synthesis, falling in the following categories ............. (c) Other synthetic polymers with an average of atleast five monomer units".
Further, Hawley's condensed chemical dictionary, which defines PEG (Polyethylene Glycol) as any of the several condensation polymers of Ethylene Glycol with the general formula - H(O-CH[2] CH[2])[n] or HOCH[2] (CH[2] OCM[2])[n]. McGraw Hill encyclopaedia of Science and Technology states that Polyethylene Glycol with average molecular weights of 200 to 20000 are produced as the residue products by Sodium or Potassium Hydroxide catalysed batch polymerisation of ethylene oxide on to water or mono or diethylene glycol and the polymers are formed by stepwise anionic addition polymerisation. The factory manager of the appellant's company has stated that Polyethylene Glycol (PEG) is manufactured by the reaction of Monoethylene Glycol (MEG) with ethylene oxide in presence of a catalyst and the reaction can be called condensation polymerisation. From this, it is seen that PEG was pure mixture of glycols. Some of these were Polyethylene Glycols having an average of atleast five monomers and this has been confirmed by the report of the Deputy Chief Chemists. The evidence on records therefore clearly supports the classification of the products in dispute under CETA sub heading 3907.20 and we therefore, uphold the findings of the adjudicating authority on the classification of the products in question.
4. The challenge to the demand of duty, on the ground of time bar is however well founded. In the classification list filed in 1986, the appellants, has clearly shown that the products in dispute are Polyoxyethylene Glycol manufactured by the reaction of mono/diethylene Glycol with ethylene oxide. There is no allegation that the process of manufacture has under gone any change during the period in dispute in the present case, which is July 1987 to June 1992. Further, even in the classification list filed in 1987, the chemical composition of the products was declared as PEG 350P and the process of the manufacture was also described. Therefore, it cannot be said as the appellants suppressed vital information regarding the products, which was necessary for the purpose of enabling the department to classify the goods correctly. We, therefore, hold that the extended period of limitation is not available to the department and hence uphold the duty demand only for the period of six months from the issue of the show cause notice in August 1992. Duty amount is to be re-computed for this period. We set aside the penalty, as this is a case of revision of classification and not a case of suppression with intent to evade payment of duty. We uphold the confiscation of seized goods as no satisfactory argument has been advanced in the appeal against the same.