1. This is an appeal against the order of the Collector of Central Excise & Customs, Pune, dated 20th May, 1988 passed in F. No. V(11A) 15-7/Adj/87/534, 2. By the impugned order, the Collector of Central Excise, Pune has held that the product called "Crown Cork Sealing Compound", manufactured by the appellants out of Polyvinyl Chloride Resin, Plasticizers and Inorganic Fillers, was not 'PVC Compound' as claimed by them. Consequently, he held that the goods were not eligible for the benefit of duty exemption contained in Central Excise Notification No.206/77 dated 29-6-1977 and confirmed the demand for duty leviable on clearances of the goods during the period from November 1976 to 20-10-1983. The appellants' contention that the product was P.V.C.Compound was not accepted. Hence the present appeal.
3. We have heard Shri CM. Korde, Advocate, for the appellants and Shri L. Narasimha Murthy, DR, for the respondent Collector.
"Exemption to PVC compound. - In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 (1 of 1944), the Central Government hereby exempts the plastic material commonly known as polyvinyl chloride compound (PVC Compound) from the whole of the duly of excise leviable thereon under the Central Excises and Salt Act, 1944 (1 of 1944)." It may be seen that the term 'PVC Compound' has not been defined except that it is the plastic material commonly known as Polyvinyl Chloride Compound.
"Basic PVC Resin is mechanically mixed with Plasticizers, Additives, inorganic fillers and blowing agents to obtain a homogeneous compound of the desired viscosity. The Compound is then deaerated and packed. The following inputs are used to obtain the said compound.(1) PVC Resin 55 to 60%(2) Plasticizers 35 to 38%(3) Additives and Inorganic fillers 2 to 5%(4) Blowing agents etc.
1 to 2% [page 188 of the paper book] There is no dispute that there is any chemical reaction involved in the process. There is only physical mixing of the ingredients to form a homogenous product. The product is stated to be used as a liner in bottle closures for soft drinks and beer.
6. The appellants filed a classification list ('C.L.' for short) on 22-11-1976 (page 18 of the paper book) claiming classification of Crown Cork Sealing Compound under Item No. 68 of the Central Excise Tariff Schedule ("goods not elsewhere specified") and the rate of basic excise duty was indicated as 1% ad valorem. The Assistant Collector approved the same subject to the results of test by the Deputy Chief Chemist, Bombay. Another C.L. dated 20-6-1977 (page 22 of the "paper book) again claiming classification of the product under Item No. 68, GET, assessable at 2% ad valorem was also approved on 24-8-1977 "until further orders". A third C.L. dated 26-7-1977 (page 36 of the paper book) in which the product was claimed by the appellants to be classifiable under Item No. 15A, CET and exempt under Notification No.206/77 was also approved "until further orders". On 21-11-1978, the appellants made a declaration testifying as to the drawing of representative samples of the product for test. The declaration also contained a passage on the product reading as follows :- It is a compound based on synthetic resins of PVC type and is used in the manufacture of PVC lined bottle-closures for soft drinks and beer. The material is a substitute for cork which was formerly used as a liner in the bottle-closures. The compound is applied using special injection and spinning equipment and curing ovens by the manufacturer of crown closures. The compound which is a plastisol, after curing adheres to the closure which is precoated with a special adhesive varnish which in turn ensures adhesion to metal and to the compound. The compound by itself does not give adherent films w.r.t. the metallic surface of the crown. The compound is applied in quantities of about 0.25 per crown closure and is stoved at 235C for 42 seconds to obtain optimal values w.r.t. final performance. A typical data sheet is enclosed." On 5-2-1979, the Suptd. of Central Excise communicated to the appellants the test report received from the Chemical Examiner, Bombay.
On the subject product, it stated : "Sample is in the form of a paste. It is composed of polyvinyl Chloride Synthetic resins plastisizers and inorganic fillers. It is not a PVC compound." It appears from the Superintendent's further letter dated 15-6-1979 (page 43 of the paper book) that the Deputy Chief Chemist, Bombay had reported on the product in identical terms. He further stated that in view of the test report, the product should have been classified and assessed to duty as synthetic resins at 40% ad valoram from the beginning. To this, the appellants replied on 27-6-1979 (page 46 of the paper book) reiterating that the product was P.V.C. Compound and gave a technical explanation in respect thereof. It appears that on 12-5-1980, four representative samples of the product were drawn by the Central Excise Inspector. On 29-9-1980, the Superintendent issued a show cause-cum-demand notice (page 49 of the paper book) alleging suppression of the information regarding the correct composition of the product inasmuch as the Deputy Chief Chemist had declared it as not PVC Compound and demanding payment of Rs. 36,10,280.48 for the period November 1976 to September 1980 towards the duty non-paid (evaded). The appellants, vide their letter dated 8-10-1980 (page 53 of the paper book) stated that they did not agree with the Deputy Chief Chemist's findings and requested to get a sample tested by the Chief Chemist, Delhi. On 31-10-1980, the appellants replied to the notice denying all the allegations. On 24-2-1981, the Assistant Collector wrote to the appellants referring to the approval given to C.L. with effect from 19-6-1980 stating as follows :- "Since the matter, whether the product to be treated as a PVC compound or not is under dispute and the final/Verdict from Chief Chemist, New Delhi is still awaited, you are informed that the assessment of this product shall be treated as provisional under Rule 9-B of Central Excise Rules, 1944.
In other words it may be noted that the exemption in terms of NF-206/77 dated 29-6-1977 will be available only if on chemical test it is found that the product is PVC Compound." The appellants wrote back on 27-2-1981 that in view of the approval of the C.L. on 5-7-1980, there was no provision in the Central Excise law to resort to provisional assessment. On 16-9-1982, the Superintendent conveyed the test result vide Test Memo dated 20-3-1982 by the Deputy Chief Chemist, Bombay on exactly the same lines as earlier noted. By letter dated 30-9-1982, the appellants asked the Superintendent to furnish the results of the test by the Chief Chemist and by the National Chemical Laboratory, Pune (for which samples had been drawn on 11-12-1980) and again suggested that a sample may be drawn for test by the Chief Chemist. On 8-10-1982, the Superintendent again conveyed the test result received from the Deputy Chief Chemist reading the same as before except for the absence of the last sentence that it is not a PVC Compound. On 22-2-1982, the Superintendent conveyed the Chief Chemist's test results reading as follows :- "Crown Cork Sealing Compound" - "The sample is in the form of grey free flowing viscous liquid. It is a suspension compound of polyvinyl chloride synthetic resin plasticizer and small amount of inorganic matter. It can be considered as a plastic material." (The original of the letter was seen by the Bench. It was apparent that the date was erroneously shown as 22-2-1982. It should have read as 22-2-1983. It is the appellants' contention that there was in fact no test by the Chief Chemist. This will be dealt with later). Followed a second show cause notice dated 26-11 -1982 (page 72 of paper book) for Rs. 15,01,924.83 for the period from 1-10-1980 to 28-2-1981. By reply dated 4-1-1983, the appellants denied any liability to pay the amounts.
Followed yet another show cause notice on 21-2-1983 (page 85 of the paper book) for disallowing the exemption claimed in C.L. No.1/82-83/12-3-1982 provisionally approved as eligible for exemption under Notification 206/77. In reply dated 15-3-1983 (page 89 of the paper book), the appellants sought the basis for the stand that the product was not PVC Compound. On 20-2-1984, the Superintendent forwarded a sample to the Chief Chemist, Delhi for test and opinion (page 91 of the paper book). On 5-6-1985, the Asst. Collector wrote to the appellants sending "a copy of the test report received from the Chief Chemist, Central Revenue, New Delhi dated 23-11-1982 was already made available to you by Supdt. C. Excise, Dr. Beck Range." The letter further said :- "Besides in this case, the common terminology for a PVC liquid suspension as followed in plastic trade and also in technology is "plastisol". It is, therefore, felt that the product Crown Cork Scaling Compound manufactured by you cannot be considered as a "PVC Compound" as is commonly understood." The Chief Chemisl's report dated 23-11-1982, enclosed with the above letter showed the following results :- "The sample is in the form of grey free flowing viscous liquid. It is a suspension composed of polyvinyl chloride synthetic resin, plasticizer and small amount of inorganic matter. It can be considered as a plastic material." In due course, the Assistant Collector, by order dated 24th/30th September, 1985, adjudicated the case relating to show cause notices dated 29-9-1980, 26-11-1982 and 21-2-1983. He held that the product was correctly classified under Item 68, CET, prior to 18-6-1977. He also ordered classification of the product as a plastic material under Item No. 15A(1)(ii) for the period from 18-6-1977 to 28-2-1982 and thereafter under Item No. 68. He also confirmed the demand for Rs. 34,22,069.57 for the period from 19-6-1977 to 30-9-1980 and for Rs. 15,01,924.83 for the period from 4-10-1980 to 28-2-1981. In appeal, the Collector (Appeals), by order dated 31-10-1986 set aside the Assistant Collector's order on the ground of violation of principles of natural justice and directed the Assistant Collector to decide the matter de novo. Thereafter, the Collector of Central Excise, Pune, took up the adjudication of the matter (vide his letter of 27-5-1987 - page 132 of the paper book) in view of the amendment to Section 11-A of the Central Excises & Salt Act, 1944 by Central Excises and Salt (Amendment) Act of 1985, effective from 27-12-1985. In due course, the Collector passed the impugned order which is the subject of challenge in the present appeal.
Appellants Dr. Beck & Co. (India) Ltd., and Shri L. Narasimha Murthy, DR, for the respondent-Collector.
8. One of the grounds on which the learned counsel attacked the impugned order is that the first show cause notice dated 29-9-1980 was issued at a time when Central Excise Rule 10 was in force but the rule was repealed on 17-11-1980 when Section 11-A was incorporated into the Central Excises & Salt Act. There was no saving clause in Section 11-A in respect of proceedings initiated under the repealed rule and, therefore, the proceedings in pursuance of the said show cause notice were illegal. However, in view of the decision of a 5-Member Bench of this Tribunal - Alma Steels Pvt. Ltd. & Ors. v. Collector of Central Excise, Chandigarh and Ors. - 1984 (17) ELT 331 - holding that proceedings initiated with reference to a rule or provision validly subsisting at the time of initiation of the proceedings can continue in spite of repeal or substitution of the original rule or provision, the Counsel did not make any further submissions on the point while not abandoning it. In view of the said decision, we hold that there was no illegality in the adjudication of the said show cause notice even after the repeal of Rule 10.
9. On the merits of the dispute, the Counsel strongly relied on the material on record in support of his contention that the subject product was nothing but a PVC Compound. Though the Deputy Chief Chemist had reported that it was not a PVC Compound, the basis for such a conclusion has not been disclosed. On the other hand, the report purportedly of the Chief Chemist [conveyed to the appellants vide the Superintendent's letter dated 22-2-1982 (an apparent mistake for 22-2-1983)] does not say it is not a PVC Compound. The sample has been reported to be "in the form of grey free flowing viscous liquid. It is a suspension compound (composed) of polyvinyl chloride synthetic resin, plasticizer and small amount of inorganic matter. It can be considered as a plastic material." The Collector has relied on a report dated 30-6-1978 of the Chief Chemist (paras 22 and 24 of the impugned order).
It is* the appellants' contention that no such report exists because despite requests, a copy of the same has not been made available to them. A ground has been put forth in the appeal that there has thus been a violation of the principles of natural justice on the Collector's part. However, in the course of the hearing before us the Counsel stated that he was giving up this ground because, even assuming that such a report existed and that the Collector had correctly paraphrased it in his order, the said alleged report of the Chief Chemist was erroneous and incorrect and was contradicted by the material placed by the appellants on record. This has been confirmed by a written statement of the company secretary of the appellant company, forwarded by the Counsel.
10. It has been shown from the correspondence exchanged between the appellants and the Department that the latter has not furnished the appellants with the material gathered as to the trade understanding of the product as not being a PVC Compound as commonly understood in view of its being a liquid suspension of PVC resin in a plasticizer. In his letter dated 5-6-1985, the Asstt. Collector has stated that the common terminoloy for a PVC liquid suspension in the plastic trade and technology is "plas-tisol" and hence the subject product cannot be considered as a "PVC Compound" as commonly understood.
11. At page 145 of the Paper Book is a certificate from Shri V.Krishnan, Reader in the Department of Chemical Technology, University of Bombay. It reads as follows :- "In the field of polymer technology, the process of compounding of polyvinyl chloride - PVC Resins - is normally employed to produce different types of plastic materials. The process of compounding as is understood in polymer technology, is not the same as is popularly understood, i.e., the expression compounding when used in polymer technology, does not necessarily involve a chemical reaction. In polymer technology, PVC compounding means addition of substances such as plasticizer and fillers to PVC resin to obtain various types of plastic materials which are known as PVC Compounds.
The expression plastisol is used to describe a dispersion of polyvinyl chloride in plasticizer. A plastisol is obtained by the process of compounding PVC Resin and is nothing but a plastic material.
I have scrutinised the process of manufacturing Crown Cork Sealing Compound in the factory of Dr. Beck & Co. (I) Ltd., is as under: "PVC Resin is mixed with plasticizers, additives and fillers to get a polyvinyl chloride compound. The compound is then de-aerated and packed." The above process is clearly a process of compounding PVC Resin to obtain a plastisol which is a polyvinyl chloride compound." 12. At pages 148-150 is a certificate from Dr. M.S. Wadia, Professor of Organic Chemistry, University of Poona. It states, quoting Norman L.
Perry, in the chapter "The compounding of PVC" in Encyclopedia of PVC edited by L.I. Nass, published by Marces Dekker Inc. New York (volume 2, page 848) - "In the simplest sense compounding can be defined as the mixing to homogeneity of PVC resin with the other compounds required for processing and performance. It can be seen from the above that compounding involves mixing and no chemical reaction is involved in this process. The purpose of compounding is to change the physical properties such as hardness, tensile strength, modulus of elasticity, elongation, etc. This has also been expressed by N.L.
Perry (Ref: same as above p. 856)." Then he goes on to refer to Kirk-Othmer's Encyclopedia of Chemical Technology and opines that Plastisol (which the Department says the subject product) is a compounded PVC resin and is nothing but a^plastic material and that having regard to the process of manufacture of Crown Cork Sealing Compound, it is compounded PVC.13. Then, there is a technical opinion dated 14-2-1986 rendered by Dr.
S.H. Iqbal, Head, Division of Technical Services of the National Chemical Laboratory, Pune (page 151 of the Paper Book). Dr. Iqbal has opined from the details supplied by the appellants that the PVC formulation containing 60% PVC, the remaining being plasticizers and fillers, manufactured by the appellants, was a "Plastisol". He has extracted a paragraph at page 365 of "Plastic Engineering Handbook" published by Van Nostrand Reichold Publishers, which reads as follows :- "The term Plastisol is used to describe a vinyl dispersion which contains no volatile thinners solvents. Plastisols often contain stabilizers, and pigments along with the essentials, dispersion resin and liquid plasticizers, but all ingredients have very low volatility under the pressing and use conditions. Plastisols can be made into thick fused sections with no concern to solvent or water blistering as with solution of latex systems, hence they are described as being "100% solids materials".
and has, from the above para, opined that Plastisol is nothing but a PVC Compound. He has also stated that in the case of plastic materials, the word 'compounding' simply implies addition of substances such as plasticizers and fillers. He adds : "In this case plasticizers and fillers are added to what is basically PVC, so that various types of plastic materials/non-plastic materials known as PVC compounds can be obtained".
14. It may be stated here that in response to the appellants' request, the Collector had furnished under cover of his letter dated 5-5-1988 (page 166 of the paper book) a copy of the letter dated 29-12-1980 from Dr. Iqbal, Head, Division of Technical Services, National Chemical Laboratory, Pune, to the Asst. Collector. In this letter, it has been opined that a mixture of PVC with ingredients such as plasticizers, stabilizers, solvents, pigments, fillers, etc. is termed as a PVC Compound and that the material under dispute can be definitely treated as a PVC Compound. This, however, is an unsigned letter and the original of this letter was not placed before the Bench. As such, we are not in a position to take note of this letter.
15. Our attention was then drawn to the book "Encyclopedia of PVC" edited by Leonard I. Nass, published by Marces Dekker, Inc. New York, extracts from which are at pages 153 to 163 of the paper book. It is this book opinion has been referred to earlier. Apart from the passage referred to earlier, the book also has the following passage at page 848(page 155 of the paper book) :- "Compounding PVC essentially involves, adding to the base PVC resin, the components that will allow it to be processed into a finished product with desired properties, at minimum cost. The "families" of materials that will be chosen will probably fall into one of the following volumes.
h. Miscellaneous (anti-static agents, tackifiers, anti-blocking agents, foaming agents, flame-retardants, fungicides, odorants)." 16. It is also necessary at this stage to refer to the book "Plastisols and Or-ganosols" edited by Harold A. Sarvetnick published by Van Nostrand Reinhold Company extracts from which are at pages 12 to 17 of the paper book. At page 1 of the above book (page 13 of the Paper Book), it is stated :- "Plastisols are a unique liquid form of "vinyl" compound in the unprocessed state. Their introduction has been responsible for the development of a number of completely new low cost processing techniques, which are described in later chapters.
A plastisol is a suspension of PVC resin in a liquid plasticizer to produce a fluid mixture which may range in viscosity from a pourable liquid to a heavy paste. This fluid may be spread on to a substrate, poured into a mold, sprayed on to a surface, etc." 17. By way of evidence as to the trade understanding of the product, copies of affidavits of a partner of M/s. Roop Enterprises, traders, dealers and distributors of chemicals, the Assistant Purchase Manager of Kool Crown Corks Pvt. Ltd. New Delhi and users of Crown Cork Sealing Compound manufactured by the appellants, are produced. The former states that Crown Cork Sealing Compound which is a plastic material commonly known as PVC compound or Plastisol, which be a type of PVC Compound. The latter states that Crown Cork Sealing Compound is commonly known as PVC Compound and Plastisols and the latter (Plastisols) being nothing but a category of PVC Compound.
18. It is the contention of the Learned Counsel for the appellants that the evidence discussed above to which our attention was drawn overwhelmingly supports the appellants' stand that Crown Cork Sealing Compound is nothing but a kind of PVC Compound. As against this, the Department has not produced any evidence as to the trade understanding of the product. Even the opinion of the Chief Chemist does not support the Department's stand. If anything, it supports the appellants' stand though it does not say that in so many words that the product is a PVC Compound. The only material on which the Department has sought to place reliance is the purported opinion of the Chief Chemist that the product which is a 'Plastisol' is not a PVC Compound. This has been controverted by the evidence placed on the record pointing to the contrary. The only other material against the appellants is the Deputy Chief Chemist's opinion that the product is not a PVC Compound, which is not supported by any evidence whatsoever. The Collector has not dealt with the evidence placed on record by the appellants.
19. The Learned D.R., in response to a query from the Bench, states that the Chief Chemist's report dated 30-6-1978, referred to and relied upon by the Collector in the impugned order, has not been made available to him and, therefore, he is not in a position to make any submissions thereon. He refers to the "Encyclopedia of PVC" (page 153 of the Paper Book) and states that it may be seen that the product is a formulated product; it is not the result of simple mixing and, therefore, it is not a PVC Compound. Referring to the following passage occurring in the said book (page 155 of the paper book) :- "...As material for the ultimate product compounded polyvinyl chloride can be formed by almost all the standard plastics processing techniques, including calendering, extrusion, injection and compression molding, blow molding, rotational molding, slush and dip molding, solution casting, electrostatic spray, and fluidized bed coating." the Learned D.R. submits that equipment for calendering, extrusion, injection and compression molding, etc. would be required for manufacture of PVC Compound and he is not in a position to say whether the appellants have such equipment.
20. On the certificates and affidavits produced by the appellants, the Learned D.R. submits with reference to Dr. Wadia's certificate (page 148-150 of the paper book) that properly designed equipment is necessary for compounding PVC. The Deputy Chief Chemist has clearly opined that the product is not a PVC Compound though it may be a 'Plastisol'. Referring to the affidavits of a trader and an actual user placed on record by the appellants (appearing at pages 189-191 of the paper book), the D.R. states that the product was manufactured and cleared as Crown Cork Sealing Compound and not as a PVC Compound.
Therefore, the affidavits have no value as an evidence of the trade understanding of the product.
21. The learned D.R. next relies on the write-up on Organosols and Plaslisols appearing at page 906 of "Encyclopedia of Chemistry" by Clifford A. Hampel - 3rd Edn. This book states that Plastisols are dispersions of powdered PVC resin in plasticizer. From this he concludes that plastisol is not the result of just mixing; some process is involved. He also refers to the passage on 'plasticizer' appearing at page 822 of the Condensed Chemical Dictionary, Tenth Edition, revised by Gessner G. Hawley. This defines 'plasticizer' as an organic compound added to a high polymer both to facilitate processing and to increase the flexibility and toughness of the final product by internal modification (solvation) of the polymer molecule. [It is not quite clear what is sought to be established by referring to this passage].
He also refers to the definition of "formulation" appearing at page 477 of the same book :- "formulation. Selection of components of a product formula or mixture to provide optimum specific properties for the end use desired. Formulation by experienced technologists is essential for products intended to meet specifications of special service conditions." 22. From the above submissions, the inference sought to be drawn by the learned D.R. is that the Department has istablished that the subject product is not a PVC Compound.
23. We have considered the submissions of both sides. The appellants have established their claim that the subject product is a PVC Compound by adducing expert opinion of distinguished authorities such as the Professor of Organic Chemistry of the University of Poona, Dr. S.H.Iqbal of the National Chemical Laboratory, Pune, etc. as also by the evidence as to trade understanding of the product. The manufacturing process has been extracted earlier. It may be seen that PVC resin is mechanically mixed with Plasticizers, additives, inorganic fillers and blowing agents to obtain a homogenous compound of the desired viscosity. The Compound is then deaerated and packed. The resin forms 55 to 60% of the product, plasticizers 35 to 38%, additives and inorganic fillers 2 to 5% and blowing agents etc. 1 to 2%. As the extracts from the technical books show, the expression 'compounding' in relation to PVC resin is applied not in the normal sense of the term 'compound' as understood in Chemistry, that is to say, a chemical combination of the ingredients forming a new product with a chemical structure which is not the same as that of the constituent ingredients.
The term is used in relation to 'formulation' or mixing of various additives, plasticizers, fillers, etc. so as to produce a product which will meet the requirements of specific uses. It is in this sense that the term compounding has been used in relation to PVC resin.
24. The Deputy Chief Chemist has stated that Crown Cork Sealing Compound is composed of PVC synthetic resin, plasticizers, and inorganic fillers and has opined that it is not a PVC compound, without, however, laying any basis for the opinion. As against this, the Chief Chemist has stated that the sample of the product was in the form of grey free flowing viscous liquid, a suspension composed of PVC synthetic resin, plasticizer and a small amount of inorganic matter. He has opined that it could be considered as a plastic material. It is not clear why the Chief Chemist has not expressed an opinion one way or the other as to whether the product is a PVC Compound. The Collector has opined that PVC Compound is commonly understood as in the form of moulding powder, pellets or granules and is used for making of moulded PVC articles and that it is not in liquid form as in the instant case.
Further he relies on the opinion given by the Chief Chemist (which apparently had not been given to the appellants and a copy of which is not available on the record) that Plastisol is not commonly known as PVC Compound. We do not know on what basis this purported opinion has been given but, Shri V. Krishnan, Reader, Department of Chemical Technology, University of Bombay, has stated in his opinion dated 8-1-1986 (page 145 of the paper book-extracted earlier), after scrutinising the process of manufacture of Crown Cork Sealing Compound, that the process was clearly one of compounding PVC Resin to obtain a Plastisol which is a PVC Compound. The opinion dated 9-1-1986 given by Dr. M.S. Wadia, Professor of Organic Chemistry, University of Poona, is also to the effect that Plastisol is a compounded PVC resin and is nothing but a plastic material. He has also stated that the process followed by the appellants is a process of compouding PVC and the subject product is a compounded PVC. Dr. S.H. Iqbal of the National Chemical Laboratory, Pune has, in his opinion dated 14-2-1986 (page 151 of the paper book) also stated that Plastisol is nothing but a PVC Compound. The "Encyclopedia of Chemistry" relied on by Shri Murthy, the learned D.R. also stales that Plastisols arc dispersions of powdered PVC resin in plasticizer. We do not see that this book, extracts from which have been furnished, says anything to the effect that Plastisol is not a PVC Compound. The Condensed Chemical Dictionary also clarifies that the term "formulation" applies also to mixtures to provide optimum specific properties for the end use desired.
25. In view of the overwhelming evidence brought on record by the appellants, we are of the view that the subject product, namely, Crown Cork Scaling Compound manufactured by the appellants is nothing but a sort of PVC Compound.
26. On the question whether the appellants had suppressed any material information etc. or any of the ingredients required to invoke the extended period of limitation was present in the instant case, the Learned Counsel for the appellants submits that in the impugned order the Collector does not discuss this aspect at all but, nevertheless, proceeds to confirm the demand which goes beyond the normal period of limitation. That the Collector does not discuss this aspect at all is not disputed by the learned D.R. It is, however, clear from the narration of facts, as set out in the earlier part of this order, the repeated tests conducted by the departmental authorities and the correspondence exchanged between the appellants and the Department that there has been no suppression of any material facts on the part of the appellants nor has the Department succeeded in establishing the presence of any of the ingredients required for invoking the extended period of limitation in terms of the proviso to Sub-section (1) of Section 11A of the Central Excises & Salt Act. However, it is pertinent to note here that the question of limitation is not relevant in respect of the demand for the period from 1-3-1981 to February, 1983 since the assessments during this period were provisional. However, nothing turns on this in view of our finding that the product was PVC Compound.
27. The Learned Counsel for the appellants has made an alternative submission that in the event of it being held that the subject product was dutiable, the appellants should be allowed to avail themselves of the benefit of the Central Excise Rule 56A read with Central Excise Notification No. 201/79 which plea was raised before the Assistant Collector though not before the Collector. We, however, see no need to consider this submission in view of our finding on the merits of the dutiability of the product.
28. In the light of the foregoing discussion, we hold that the subject product manufactured by the appellants, namely, Crown Cork Sealing Compound, was a PVC Compound within the meaning of Central Excise Notification No. 206/77 dated 29-6-1977.
In view of this, the appeal succeeds and is allowed setting aside the impugned order.