ORDER
S.L. Peeran, Member (J)
1. In these appeals, the appellants had imported goods namely ‘3 Dimethyl Amine 1 Chloro Propane HCL’ and sought the benefit of Notification No. 179/86. Both the lower authorities have denied the said benefit. This matter had come up for appeal earlier and on the appellants producing certain technical materials, the appeal was allowed by remand with a direction to the Col-lector(Appeals) to re-examine the said material on record. The learned Collector has held as follows –
“I have carefully considered the submissions made by the appellants in the written memorandum of appeal and during the course of personal hearing. The appellant has claimed the benefit of Notification No. 179/86 for 3-Dimethyl Amine 1-Chloropropane HCL 50% Acqueous solution on the ground that 3 Dimethyl Amine 1 Chloropropane referred to in the notification is unstable organic base. This has to be stabilised with the help of hydrochloric acid in acqueous solution. In support of this claim the appellants have submitted photo copies of certificate issued by Prof. S. Seshadri, Prof. of Dyestuff Technology, University of Bombay and by Amol Drug Pharma Pvt. Ltd. manufacturer of 3-Dimethyl Amine 1 Chloropropane.
A perusal of entry No. 10 of Notification No. 179/86 indicates that exemption is available only to 3 Dimethyl Amine 1 Chloro Propane. There is no entry with reference to any other organic version, such as hydrochloride of this chemical. I also find that the chemical formula of 3 Dimethyl Amine 1 Chloropropane and 3 Dimethyl Amine 1 Chloropropane hydrochloric acid are different. The notification is to be read with reference to the express entries and conditions contained therein. Variation in this entry cannot be introduced for the benefit nor can the specific reference of the item in the notification expanded for the reasons that the item referred therein is unstable and not available as such in the trade. If the intention of the law-maker were to incorporate the hydrochloride of Dimethyl amine 1 Chloropropane also in the notification, they would have specifically provided for the same.
Accordingly, the benefit of exemption stipulated in the said Notification 179/86 cannot be extended to the subject goods on the ground that the goods referred to in the notification is unstable and the benefit would be made redundant if the notification is strictly applied. Appeal is accordingly rejected as untenable.”
The appellants are aggrieved with the above findings and have contended that the goods 3-Dimethylamine 1-Chloropropane is highly unstable organic compound and as such, it has to be stabilised by converting the same in acqueous solution form. They contended that the goods 3-Dimethylamine-l-Chloropropane is supplied with 50% acqueous solution of hydrochloric acid. They have relied on the certificates issued by Prof. S. Seshadri, Prof, of Dyestuff Technology, University of Bombay and also that of Amol Drug Pharma Pvt. Ltd. They contended that the Collector having accepted the fact that 3 Dimethy-lamine 1-Chloropropane and 3 Dimethylamine 1-Chloropropane HCL 50% referred to one and the same item; then in such a circumstance, the benefit could not have been denied to them, by a literal interpretation of the notification. They contended that such a reading of the notification would make the notification redundant. They relied on Note 1 to Chapter 29 which clarifies that the headings of the Chapter shall cover products with an added stabilizer necessary for their transport. They contended that while interpreting the exemption notification issued under the Chapter, it would automatically follow that the manner attributed under the same Chapter notes, has to be extended and it ought to have been held that the exemption which refers to 3-Dimethylamine- 1-Chloropropane should be extended to its stabilised form 3-Dimethylamine-1-Chloropropane HCL 50% acqueous solution.
2. We have heard Shri K.R. Chopra, learned Consultant for the appellants and Shri L.N. Murthy learned DR for the Revenue. Shri Chopra contended that the learned Collector was not justified in rejecting the evidence placed by the appellants. The direction of remand was to consider the evidence but the learned Collector had mechanically disposed of the appeal without a proper appreciation of the certificate issued by a Professor and an expert Head of Department of Chemical Technology, University of Bombay. The certificates issued by Amol Drug Pharma and that of the appellants’ plant had also been ignored. He contended that Sl. No. 10 of the table of the Notification No. 179/86 dated 1-3-1986 had granted the benefit of exemption from duty to the imported item. The item had been merely treated with HCL only for preservation and it did not make the item a different one by such treatment for preservation purpose. He pointed out to Note 1(f) of Chapter 29 of Customs Tariff under which the item falls, which had clarified that merely addition of stabilisers necessary for their preservation or transport, would not by itself change the classification of the item from Chapter 29 as organic chemicals. He contended that the presence of HCL 50% was for the purpose of stabilising it in acqueous solution as the item is an unstable organic base, therefore, the item continues to be in stabilised form of 3-Dimethylamine-l-Chloropropane and is eligible for the exemption under Sl. No. 10 of the said notification which read as “3-Dimethylamine-1-Chloropropane. He contended that the notification should not be read in such a manner as to make the notification otiose or redundant and in this context, relied on the ruling of C.C.E., Indore v. Jiyajeerao Cotton Mills Ltd. 1984 (15) E.L.T. 259 and also Vishal Surgical Co. Ltd., Madras v. C.C. 1990 (16) E.T.R. 109.
3. Shri L.N. Murthy, learned DR contended that the appellants had not claimed the benefit of the notification, therefore, the goods had not been tested at the first instance and hence the Collector (Appeals) was justified in rejecting the claim of the appellants. He contended that the certificates relied by the appellants were only opinions and hence the notification required to be strictly construed and as the item contained HCL 50% it did not merit exemption as per Sl. No. 10 of the notification which was for plain “3-Dimethylamine-l-Chloropropane” and not to the item in question.
4. We have considered the submissions made by the appellants and also gone through the record as well as certificates. The question that arises for our consideration is as to whether the imported item with presence of 50% HCL, can be considered as 3-Dimethylamine-1-Chloropropane appearing in Sl. No. 10 of the table of the notification. Admittedly, the item falls under Chapter 29. The Notification No. 179/86 dated 1-3-1986 reads as follows –
“Exemption to 23 specified drug intermediates. – In exercise of the powers conferred by Sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Govt. being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the Table hereto annexed and falling within Chapter 28 or Chapter 29 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India from the whole of the additional duty of customs leviable thereon under section 3 of the said Customs Tariff Act, 1975 –
The Table
1. 2.
—————-
1 to 9 xxx
10 3-Dimethylamine-l-Chloro propane
x x x
Now it has to be seen as to whether Note 1(f) of Chapter 29 can be applied for the purpose of grant of exemption.
Note 1 of Chapter 29 reads as follows -
"Except where the context otherwise requires, the headings of this chapter apply only to -
(a) Separate chemically defined organic compounds, whether or not containing impurities;
(b) Mixtures of two or more isomers of the same organic compound (whether or not containing impurities) except mixtures of acyclic hydrocarbon isomers (other than stereoisomers), whether or not saturated (Chapter 27);
(c) The products of Heading Nos. 29.36 to 29.39 or the sugar ethers and sugar esters and their salts of Heading No. 29.40 or the products of Heading No. 29.41 whether or not chemically defined;
(d) The products mentioned in (a), (b), or (c) above dissolved in water.
(e) The products mentioned in (a), (b) or (c) above dissolved in other solvents provided that the solution constitutes a normal and necessary method of putting up these products adopted solely for reasons of safety or for transport and that the solvent does not render the product particularly suitable for specific use rather than for general use;
(f) The products mentioned in (a), (b), (c), (d) or (e) above with an added stabiliser necessary for their preservation or transport.
(g) The products mentioned in (a), (b), (c), (d), (e) or (f) above with an added anti-dusting agent or a colouring or odoriferous substance added to facilitate their identification or for safety reasons, provided that the additions do not render the product particularly suitable for specific use rather than for general use;
(h) The following products, diluted to standard strengths, for the production of azo dyes : dizonium salts, couplers used for these salts and diazotisable amines and their salts”.
The Note clearly indicates that the product would continue to be treated as a separate chemically defined organic compound despite the presence of mixtures of 2 or more items of same organic compound; or the presence of ethers and sugar esters and their salts or if they are dissolved in water or if they are added with stabiliser necessary for their preservation or necessary for transport. Note 1(g) also specifies that if the products mentioned in (a), (b), (c), (d), (e) or (f) above with an added anti-dusting agent or a colouring or odoriferous substance added to facilitate their identification or safety reasons, would continue to fall under Item 29 provided that the additions have not rendered the product unsuitable for a specific use rather than for general use. The Note 1(h) also clarifies under what circumstances, the product could be classified as organic chemicals despite dissolution to obtain standard strengths for the production of Azo-dyes, Dizonium Salts, Couplers used for these salts and Diazotisable amines and their salts. The Note 1 to Chapter 29, cannot be lost sight of in considering the grant of benefit under the said Notification No. 179/86. It has to be now seen as to whether the product listed under Sl. No. 10 of the notification by the presence of 50% HCL, can take it out from that category of the item. In this context, the certificate given by Prof. S. Seshadri of Dye- stuff Technology, University of Bombay is reproduced below –
“3-Dimethlylamine-l-chloropropane HCL 50% aqueous solution is essentially the same as 3-Dimethylamine-l-chloropropane. Since 3-Dimethylamine-l-chloropropane is an unstable organic base, it is stabilised with the help of hydrochloric acid in aqueous solution and hence in my opinion 3-Dimethylamine-1-chloropropane HCL 50% aqueous solution is only a stabilised form of 3-Dimethylamine-1-chloropropane and it is one and the same item.”
The Certificate of Amol Drug Pharma Private Ltd. is reproduced below –
“To whomsoever it may concern. This is to certify that we manufacture 3-Dimethylamine-1-Chloropropane. Since 3-Dimethylamine-l-Chloropropane is an unstable organic base, we stabilise it with the help of hydrochloric acid in aqueous solution. The acqueous solution supplied by us, therefore, is only the stabilised form of 3-Dimethylamine-l-chloropropane and it is one and the same item.”
In the context of above 2 certificates, the learned Collector has not referred the matter to the Chemical Examiner for opinion despite a remand on this issue. The learned Collector therefore, cannot ignore the technical evidence placed by the appellants.
5. In the case of New Plastomers India Ltd. v. Collector of Customs, Bombay, Order No. 817/91-C, dated 16-12-1991, this Bench considered the question of grant of benefit of item ‘NORYL brand resin modified Polyphenylene Oxide”. The authorities had rejected the benefit of the exemption notification on the ground that the product is a modified/blended form with sterine of the product polyphenylene oxide. The Bench after considering the entire materials on record and also rulings rendered in the case of Bakelite Hylam Ltd. v. C.C.E. 1991 (56) E.L.T. 685 (Tri.) and Heli Plastics 1990 (50) E.L.T. 183 has allowed the appellants’ contention and held that they are entitled for the benefit of the notification as claimed by them.
6. In the case of Bakelite Hylam, the question of grant of exemption to product “Hylak Polyester Resins” came up for consideraton while interpreting the Notification No. 70/84 which exempts ‘Maleic resins’ and the Bench granted the exemption.
7. In the case of Heli Plastics Ltd. reported in 1990 (50) E.L.T. 183, the Notification No. 227/76-Cus. came up for consideration. This notification exempted each of the articles specified in the table annexed thereto and falling within Chapter 39 of the CTA 1975 from payment of duty. Sl. No. 4 of the Table specifies the article exempted as ‘Polypropylene’. The goods in this case were Vestolen P. 6522 Grey and Vestolen 6502, which was classified under Chapter 39 of the CTA 1975. The department had urged that these goods are block co-polymer as distinct from polypropylene and hence not eligible for exemption. This Bench after examining the case, held that the goods were marketed as polypropylene. It was also observed that the notification did not specify the sub-heading but only required the goods should fall within Chapter 39 of the Customs Tariff Act, 1975 of which there was no doubt. Therefore, it was held that both these goods were entitled for the benefit of the notification.
8. In view of the above discussion and the rulings cited, the appellant’s contention has to be accepted by allowing these appeals with consequential relief, if any.