ORDER
V.P. Gulati, Member (T)
1. These appeals are against the order of the Collector of Customs (Appeals), Madras. The brief facts of the case are that appellants imported and cleared for home consumption a number of consignment of pitch (aluminium grade) and apart from the duty under the Customs Tariff, countervailing duty was charged under Tariff Item 68 CET. The appellants, however, claimed the assessment of the same under Tariff Item 11 (2) CET, read with Notification No. 121/62-CE. The plea of the appellants before the lower authorities as before us is that the pitch imported by them is covered by the description partially distilled coal tar’ under Tariff Item 11 (2) CET and benefit of assessment, therefore, under Notification 121/62-CE available to the same should be allowed to them.
2. The learned Advocate for the appellants pleaded that pitch imported by the appellants was intended for making electrodes. He pleaded that basically there is not much difference between the pitch and tar and in support of his plea, cited the publication – Coal Tar Products and Related Dyes page 56 and drew our attention to the following observations in this publication:-
“There are no fundamental differences in properties between pitch and tar and there can be no sharp division between the two materials. The dividing line is purely arbitrary and is dictated by convenience for commercial reasons rather than on scientific grounds.”
He pointed out that in the same publication at page 58, the use of the pitch is spelt out as Binder for carbon anodes required for the manufacture of electrolytic cells. He pleaded the pitches are partially distilled tars and he produced evidence from the experts before the lower authorities and they, he pointed out, have categorically stated that the pitch is only partially distilled tar. In this connection, he drew our attention to the affidavit filed before the lower authorities by one Sh. K.K. Cherian, Works Metallurgist of the appellant company. The learned Advocate for the appellants pointed out that Metallurgist has stated that the pitch is obtained by partial distillation of tar. He pleaded that inspite of the affidavit having been filed, the lower authorities did not choose to cross-examine the Metallurgist. He also drew our attention to the letter of Sh. P.N. Mukherjee, Deputy Director, Central Fuel Research Institute, Dhanbad (Bihar). For convenience of reference, the relevant portion of this letter is reproduced below:-
“Please refer to your letter dated 11th Sept., 1982 regarding our opinion on pitch. We fully corroborate your views as conveyed in your letter. Pitch is definitely a product which is obtained by distillation of tar. Accordingly, we are giving a statement which may be utilized by your company to get clearance from customs.”
3. A certificate signed by same gentleman dated 30th Sept., 1982 has also been cited by the learned Advocate in support of his plea. This certificate is also reproduced below for convenience of reference :-
To whom it may concern
“Coal tar pitches are obtained by the distillation of coal tars. In commercial practice coal tars are distilled to remove volatile oils, boiling upto about 360° C. The residue is discharged as pitch and sold as such. This pitch still contains volatile components, which can be removed by heating. By this procedure it is possible to get pitches of higher softening points. If the distillation is carried out to temperatures around 1300° C the product is pitch coke. Thus the pitch in question is an intermediate product obtained by partial distillation of tar to remove volatile oils. Hence pitch is partially distilled tar.”
4. The learned Advocate stated that this certificate and Shri P.N. Mukherjee’s letter above were in reply to their letter addressed to the Director, Central Fuel Research Institute dated 11th Sept., 1982. In this letter, the appellants stated the facts regarding the two competing items for assessment and they explained the nature and use of the pitch imported by them and made a request for clarification to the Director in the following terms:-
“However, the Customs Officer at Cochin feels “Pitch is not partially distilled tar. Technologically as well as in popular parlance pitch is an item different from partially distilled tar”. Hence we request you to kindly give us your opinion in the matter, which will help us in convincing the Customs Officer. We are advised that the Custom Authorities may be satisfied with a note on the following lines from you.”
“Coal tar pitches are obtained by the distillation of coal tars. In commercial practice coal tars are distilled to remove volatile oils, boiling upto about 360° C. The residue is discharged as pitch and sold as such. This pitch still contains volatile components, which can be removed by heating. By this procedure it is possible to get pitches of higher softening points. If the distillation is carried out to temperatures around 1300° C the product is pitch coke. Thus the pitch in question is an intermediate product obtained by partial distillation of tar to remove volatile oils. Hence pitch is partially distilled tar.”
“Awaiting your reply with your valuable comments on the above, which we are sure will be accepted as an authoritative opinion on the subject by all.”
5. The learned Advocate also drew our attention to the affidavit filed by one Dr. CSB Nail who has appended his qualifications to the affidavit and who is stated to be the Chief Supdt., Research and Development Department of M/s. Fertilizers & Chemicals Travancore Ltd. In this affidavit, he has pointed out that he has given his expert opinion on the product imported by the appellants about which he was made aware of by the appellants and in this opinion, the learned Advocate pleaded, he has clearly stated that no person dealing with the commodity in question – whether in its commercial application or in its scientific study could doubt for a moment that the product in question is anything other than partially distilled coal tar. He has in this affidavit, briefly set out that the pitches still contain some components which could be removed by further heating to obtain pitches of higher softening points. It was also pointed out to him that Shri Nair in his opinion given in para 2 of his affidavit has not given any reason as to why he considered the pitch as a partially distilled tar and that no scientific basis has been given by him in his opinion.
6. The learned Advocate pleaded that Shri Nair was a Chemist and had given his opinion based on his knowledge The learned Advocate drew our attention to the wording of Tl heading 11 (2) which for convenience of reference is reproduced below:
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(1) (2) (3) --------------------------------------------------------------- Tar distilled from coal One hundred rupees 100.00 or lignite and other per metric tone, and mineral tars, including partially distilled tars blends of pitch with creosote oils or with other coal tar distillation products ---------------------------------------------------------------
He pleaded that as seen from the entry, the pitch with creosote oils etc. was covered under Tl 11 (2). This he pointed out showed that the pitch could be converted to other grades of tar by reverse process of addition of distilled out components from the tar to pitch. He pleaded that the pitch was a word used to describe a stage of distillation of tar
7. The learned JDR for the Department drew our attention to the findings of the Collector (A) in respect of the evidence produced before him by way of affidavits and the opinion of the Dy. Director, Central Fuel Research Institute, Dr. P.N. Mukherjee He pleaded that the Collector (Appeals) has rightly given no credence to the evidence of Shri Nair and Sh. Mukherjee as it was solicited one and in conflict with the opinion available in the technical literature. He drew attention to the observations of the Collector (Appeals) which are reproduced below for convenience of reference
“Neither in the evidence adduced by the appellant nor in the other documents it can be established beyond doubt that pitch could be considered as ‘partially distilled tar though reliance on technical or scientific literature need not be the sole basis Even to get certificate with reference to the contents and scope of produce it could be seen that Tar is a distinct distilliary from coal or lignite while pitch all along been referred to as a residuary product, thus pitch is only a residuary product. While tar is a main product in the process of distillation. Since the pitch cannot be considered as partially distilled tar. the question of classifying the pitch under Item 11 (2) CET would not arise.”
8. He pleaded that the term partially distilled tar figuring under Tl 11 (2) CET does not figure in any technical literature or book and in view of this, the meaning of the term has to be seen with reference to the product coal tar and its distilates. He cited in this regard Encyclopaedia of Chemical Technology by Kirk Othmer 2nd Ed. and 3rd Ed. Vol. 22 wherein the constituents of coal tar have been set out at page 572. He pleaded that the coal tar comprised of various components; one amongst them being Medium soft pitch.
9. (i) He drew our attention to the heading Shipment, Storage and Handling under the Chapter Tar and Pitch at page 585 of the Encyclopaedia of Chemical Technology Third Ed. Vol. 22 referred to above. He pointed out that method for storage, transport and handling of crude tar and tar products are given therein and pitch has been separately dealt with. He also drew our attention to the principal current outlet of pitch as given in page 594 under which the use is shown as binder for the electrodes used in the aluminium smelting. He pointed out that nothing further is distilled from pitch and it is used as such. He also referred to the definition of pitch and tar given in the Petroleum Dictionary by David and the same is reproduced below:
“Pitch. (1) The bottom product from the bubble tower in a refining operation. Pitch is actually asphalt and may be used directly as produced, as one grade of asphalt. It is sometimes processed into heavier grades, sometimes blended with gas oils to make a fuel oil. (2) Term used to designate the inclination of any line that lies in a place, as lineation in bedding plane, or slickensides in a fault plane.
Tar. Heavy viscous product obtained when distilling organic materials as wood, coal, peat, etc. Although a tar-like product is obtained from petroleum, the term tar does not properly apply to such a product secured from this source.”
(ii) He also drew our attention to the Glossary of Terms Relating to Bitumen and Tar (Second Revision) under ISI334-1982. The same are also reproduced below for convenience of reference:
“2.31 Pitch, Coaltar – The black or dark brown, solid or semi-solid, fusible, and agglomerative residue remaining after partial evaporation or fractional distillation of coal tar.
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.”
(iii) His plea is that pitch and tar are recognised as separate items and while tar is obtained by distillation of materials like coal, pitch is residue obtained from distillation of tar.
(iv) In the same context, he drew our attention to the definition of description of coal tar and coal tar pitch as given in the Condensed Chemical Dictionary:-
“Coal tar.
Properties. Black, viscous liquid (or semi-solid), naphthalene – like odor; sharp burning taste; obtained by destructive distillation of bituminous coal, as in cokeovens; one ton of coal yields 8 8 gallons of coal tar. Combustible. Sp. gr. 1.18 to 1.23 Soluble in ether, benzene, carbon disulfide, chloroform; partially soluble in alcohol, acetone, methanol; only slightly soluble in water.
Coal tar may be hydrogeneted under pressure to form a petroleum-like fuel suitable for residual use.
Coal-tar fractions obtained by distillation and the chemicals found in each are as follows: (1) light oil (upto 200° C); benzene, toluene, xylenes, comenes, coumarone, indene; (2) middle oil (220-250° C); (3) heavy oil (250-300° C): naphthalene, acenaphthene, methylnaphthalenes, flurene, phenol, cresols, pyrindine, picolines; (4) anthracene oil (300-350° C); phenanthrene, anthracene, carbazole, quinolines; and (5) pitch (qv). Typical yields: 5% light oil; 17% middle oil; 7% heavy oil; 9% anthracene oil; 62% pitch. Treatment with alkalies, acids, and solvents is necessary to separate the individual chemicals.
Grades: Crude, refined; U.S.P.
Containers: Tank cars; barrels.
Hazard: Toxic by inhalation. Tolerance (volatiles), 0.2 mg per cubic metre of air. A known carcinogen.
Uses: Raw material for plastics, solvents, dyes, drugs, and other organic chemicals. The crude or refined product or fractions thereof are also used for water-proofing, paints, pipecoating, roads, roofing, insulation, as pesticides and sealants.”
“Coal-tar pitch. Dark brown to black amorphous residue left after coal tar is redistilled. It is composed almost entirely of polynuclear aromatic compounds and constitutes 48-65% of the usual grades of coal tar. Different grades have different softening points; roofing pitch softens at 65° C, electrode pitch at 110-115° C Combustible.”
(v) He further drew our attention to term coal tar and pitch as given in the Materials Handbook by C.S. Brady 11th Edition and the same are reproduced as under:
“Coal tars are usually distilled to remove the light aromatics which are used for making chemicals, and the residue tar, known as treated tar, or pitch, is employed for roofing, road making, and for bituminous paints and waterproofing compounds. Coal-tar pitch is the most stable bituminous material for covering underground pipes.”
(vi) He stated that Internationally the coal tar and pitch were understood to be two separate commodities and for customs purposes in the CCCN these fall under Tariff heading 27.06 and under Tl 27.08 respectively.
10. He pleaded that coal tar and pitch are commercially known as two separatte commodities and, therefore, these should be treated so for the purpose of levy of Centra Excise duty. In this context, he cited the case of State of Tamil Nadu v. Pyare Lal Malhotra 1983 ELT 1582 (S.C.) para 9. For convenience of reference, the relevant portion is reproduced below:
“As we all know, sales tax law is intended to tax sales of different commer cial commodities and not to tax the production of manufacture of particular sub stances out of which these commodities may have been made. As soon as separate commercial commodities emerge or come into existence, they become separate ly taxable goods or entities for purposes of sales tax. Where commercial goods without change of their identity as such goods, are merely subjected to some processing or finishing or are merely joined together, they may remain commer daily the goods which cannot be taxed again, in a series of sales, so long as they retain their identity as goods of a particular type.”
11. The learned Advocate for the appellants in reply, stated that he does not dis pute that tar and pitch are two entities. He pleaded that his plea is that the pitch should be considered as partially distilled tar and in that view of the matter it falls within the ambit of Tl 11 (2) CET and would be assessable as pleaded by him. He pleaded that definitioin of pitch given shows that it is residue after partial evaporation or distillation of coal tar and to that extent, the pitch can be considered as partially distilled coal tar.
12. The question that falls for consideration is whether pitch can be considered as partially distilled coal tar. It is not in dispute that coal tar and coal tar pitch are two separate commodities. The tars as such are products obtained by distillation of materials, coal, etc. and various types of tars are described by prefixing the name of the material from which these have been produced like coal, shale, etc. Tars as seen from the evidence cited before us are made up of large range of constituents. In case of coal tar as pleaded before us and as mentioned in the Encyclopaedia of Chemical Dictionary by Kirk Othmer, the different constituents are as under:
“TAR AND PITCH”
Table 4. Constituents of Coal Tar
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Component wt.% of dry tar Av
benzene 0.25
toluene 0.22
O-xylene 0.04
m-xylene 0.11
p-xylene 0.04
ethylbenzene 0.02
styrene 0.04
phenol 0.57
o-cresol 0.32
m-cresol 0.45
p-cresol 0.27
xylenols 0.48
high boiling tar acids 0.91
naphtha 1.18
naphthalene 8.94
a-methylnaphthalene 0.72
b-methylnaphthalene 1.32
acenaphthene 0.96
flourene 0.88
diphenylene oxide 1.50
anthracene 1.00
phenanthrene 6.30
carbazole 1.33
tar bases 1.77
medium soft pitch 59.8
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13. Various products that are derived therefrom are given in the Encyclopaedia of Chemical Technology Vol. 19 by Kirk Othmer at page 633. The same are reproduced below for better appreciation of the issues before us:
“Single-Pass, Multiple-Flash Continuous Stills. The modern Koppers design of continuous tar plants (13), operated in both Germany and Great Britain, is illustrated in Figure 2. The crude tar, after being strained through wire gauze screens and the customary addition of alkali, is raised to a temperature of 150° C by heat exchange and enters the dehydrator where water and light oils are removed. The topped tar is then pumped through the furnace coils from which it emerges at 300-320° C into the main atmospheric distillation column. From this column an overhead fraction, two side-streams, and a bottoms fraction are taken. The overhead product is condensed and separated into light oil and liquor; the lower side-stream passes to a stripping column. The top product from the stripping column passes back to the main atmospheric column as reflux, while the bottoms product passes tc a third atmospheric pressure column to be separated into naphthalene oil and a light wash oil. The base stream from the main atmospheric fractionating column is pumped through another coil in the furnace to bring its temperature back to 300-320° C and is then injected into a vacuum flash chamber. The heavier oils released here are split into heavy wash oil and heavy and light anthracene oils in a vacuum side-stream column; the residual pitch flows from the base of the vacuum flash chamber.”
14. The schematic diagram of the plant for distillation of tar product given therein is not reproduced as the issues can be analysed without reproducing the same. The pitch that can be obtained from tar is of various grades and various grades have been described in the Encyclopaedia under the heading as under:
“Pitch. Pitch, the residue from the primary distillation of tar, can be made in different viscosity grades depending on how far the distillation is taken. If the distillation is continued to the desired softening point, the residue is termed a “straight-run” pitch to distinguish it from a “cut-back” or “fluxed-back” pitch, i.e. a straight-run pitch of harder consistency fluxed back to the desired softening point with tar-distillate oil. The softer grades of pitch, having softening points by the Ring and Ball (R and B) method (see Vol. 2, p. 791) below 50° C, are generally referred to as base tars or refined tars; other grades are soft pitch (50-75° C, R and B softening point), medium-hard pitch (85-95° C, R and B softening point), and hard pitch (softening point above 95° C, R and B).”
15. From the material placed before us as above, we find that pitch is obtained from distillation of coal tar. No evidence has been placed before us that from the pitch which is the residuary product of distillation of tar any further distillation product is ob- tained. All that can be done with it is that it can be processed into pitch of various grades for different uses. The pitch, no doubt, comprises of polymolecular components and some of these could be removed depending on the nature of the pitch required. The appellants’ plea is that since the coal tar pitch could be processed, it should be considered as semi-distilled tar. They have, however, not shown that by processing the pitch, what products emerge as distillates. Some volatile materials may get removed by heating but these do not emerge as a distinct identifiable products to be considered as a distillation product of tar or even pitch. All that happens in the process is that one type of pitch gets converted into another type of pitch without anything else emerging from it as a distillate as such.
16. As seen from the material placed before us, the coal tar comprises of so many constituents and if part of these constituents are removed by distillation, then some constituents would still remain in it This tar can be considered as partially distilled tar and remaining identifiable constituents can be distilled out of it. So far as the pitch is concerned, as stated earlier, it has not been shown that any further identifiable products are obtained from the same on distillation for it to be considered as partially distilled tar.
17. No doubt, the term partially distilled tar as used in the tariff has not been defined nor it finds place in any technical books. What it stands for, is, therefore, to be understood in the context of distillation process of coal tar. In that context as we have observed, the pitch is the residue obtained by distillation of coal tar and we find in the context the pleas before us and the facts on record that it does not lend itself to any distillation process for obtaining any other identifiable fractions as distillates.
18. In view of the above, we hold that coal tar pitch is an item distinct from coal tar or partially distilled tar. It cannot be considered as partially distilled tar as pleaded. The appellants have placed on record evidence by way of affidavits and certificates from one of their employees and also from Deputy Director, Central Fuel Institute and another person to show that pitch is considered a partially distilled tar. We observe that no basis has been laid in the evidence of these persons, as to on what consideration or for what reasons they have considered the pitch as partially distilled tar. The certificate obtained from the Deputy Director Central Fuel Institute was in the nature of a solicited document and even the wording was given to the Dy. Director for the purpose of phrasing the certificate. Inasmuch as, there is no rational basis laid in these certificates, affidavits, etc. for considering the pitch as partially distilled tar, we hold that evidence is of no value and assistance for the purpose of arriving at the conclusions in this matter.
In view of what we have stated earlier, we hold that pitch cannot be considered as partially distilled tar and in that view of the matter, appellants plea fails and the appeals are dismissed.