ORDER
K.S. Venkataramani, Member (T)
1. This appeal is directed against the order dated 22-4-1987 passed by the Collector of Central Excise (Appeals), Bombay by which he had upheld the order dated 28-11-1985 passed by the Assistant Collector of Central Excise Division IV, Ahmedabad. Briefly, the facts are that the appellants are engaged in the manufacture of paints and varnishes falling under T.I. 14-I of the C.E.T. They filed a classification list No. 3/84-85 dated 30-11-1984 for their product described as 219/002 Polybutadiene Epoxy Electro Deposition Primer claiming exemption under Notification 220/77. This Notification exempted goods, mentioned in the table annexed thereto, falling under Item 14 of CET of duty in excess of 10%. Sl. No. 7 of the table is Epoxy based primers and varnishes. They claimed the product to be Epoxy based primer. The classification list was approved provisionally under Rule 9B of the Central Excise Rules, 1944 by the Assistant Collector. Subsequently, the appellants filed refund claim for differential duty of 5%. The Department, however, took the view that the goods was not Epoxy based primer, but was Polybutadiene Resin based primer to which the exemption notification was not applicable and, therefore, the product was assessable to duty without exemption at 15%. Show cause notice was, therefore, issued, proposing to approve the rate of duty at 15% without exemption. Another classification list No. 1/85-86 dated 18-3-1985 was also filed by the appellants claiming the same exemption which was also subjected to another show cause notice on the same line. Similarly, the Department sought to reject the refund claims also by way of an issue of a show cause notice for the purpose holding that the clearances relating to the refund claim were not as per the approved classification list. The Department found, in the appellants’ reply to the show cause notice relating to the refund claims, a copy of the letter from M/s. Maruti Udhyog Ltd. which indicated that they have placed order on the appellants for Polybutadiene Resin based Electrocoat Primer light grey. Thereupon a corrigendum was issued to the show cause notice stating that the Maruti Udhyog letter was the evidence to show that the product manufactured and cleared by the appellants was Polybutadiene Resin based Electrocoat Primer light grey for which the exempted rate of duty under Notification 220/77 was not admissible. The Department also drew samples of the goods in pursuance of the approval of the classification list on provisional basis vide test memo dated 4-12-1984 which also contained the appellants description of the process of manufacture of the product. The test result was communicated to the appellants on 4-4-1985 which is as follows :
“The sample is in the form of light grey coloured thick paste. It is composed of synthetic resin (Epoxy type) mineral solvent and inorganic pigment. It gives tackfree costing on metallic surface.”
2. On considering the appellants’ reply to the show cause notices and affording them the opportunity of personal hearing, the Assistant Collector held that the product, manufactured by the appellants, was not Epoxy based primer, but on the other hand, was Polybutadiene Resin based Electrocoat Primer. In arriving at this conclusion, the Assistant Collector referred to the Chemical Examiner’s report and concluded that the report merely stated that the goods were Epoxy type which was different from Epoxy based material. He also referred to the technical authorities like Condensed Chemical Dictionary by G.G. Hawley. He, further, supported his conclusion by relying upon the order placed on the appellants by M/s. Maruti Udhyog which was specifically Polybutadiene Resin based Primer. The Assistant Collector, therefore, rejected the refund claims and approved the classification list without allowing the exemption under Notification 220/77 and demanded differential duty as a result of such finalising of the provisional assessment. The Assistant Collector’s order was upheld by the Collector (Appeals) leading to the present appeal before the Tribunal.
3. Sh. Paresh Dave, Ld. Counsel appearing for the appellants, submitted that the report of the Chemical Examiner was clearly in their favour where he has stated that the product is composed of synthetic resin (Epoxy type) mineral solvent and inorganic pigment. The Assistant Collector’s interpretation that this will not amount to Epoxy based primer is factually wrong and it was also wrong to hold that in the manufacturing process, the Epoxy Resin are used as thinner. It was submitted, with reference to the processes of manufacture as given by them in the test report, that the process does not describe that synthetic resin and other ingredients were ground and thinned with Epoxy Resin. According to them, the reading of the process of manufacture would reveal that all the ingredients including Epoxy and a thinner were ground together in resin medium and solvents. It was, further, pointed out that the appellants have proved by the evidence of the amended purchase order from M/s. Maruti Udhyog that the order covered Polybutadiene/Epoxy based paint. Therefore, it was submitted that the product, manufacured by them, was Epoxy based primer eligible for exemption under Notification 220/77.
4. Sh. M. Jayaraman, Ld. S.D.R. appearing for the Department, contended that even the description of the product shown by them in the classification list, does not say that it is Epoxy based and being a claim for exemption, it is for the assessee to prove by evidence that they are eligible to it. The amendment of the purchase order from M/s. Maruti Udhyog is a self-serving document, according to the ., because it was produced after the show cause notice was issued. In this connection, he reiterated and relied upon the detailed reasoning contained in the Assistant Collector’s order rejecting this piece of evidence. The Assistant Collector has gone by the test result of the Chemical Examiner also and has shown how, even going by the test result, the product, not being Epoxy based primer, was not eligible for exemption.
5. The submissions made by both the parties, herein, have been carefully considered. The Notification 220/77, as noted above, exempts Epoxy based primers and varnishes. The question, here is whether the product of the appellants, which is described as Polybutadiene Epoxy Electro Deposition Primer in their classification list can be considered as Epoxy based primer. The Chemical Examiner’s report, already extracted above, does not categorically say that it is Epoxy based but says that it is composed of synthetic resin (Epoxy type) mineral solvent and inorganic pigment. The process of manu facture of the product, as given by the appellants in the test memo, runs as follows :
“The pigment, extenders, resin medium and solvents are ground together in a ball mill and thinned with Epoxy Resin, resin medium and solvents. The end use is as primer undercoats for metal surface.”
6. A perusal of this indicates that it is not clear therefrom what exactly is the resin medium referred to therein. This ingredient, namely, resin medium, is of significance in determining as to on what material, the product is based. It is in this context that the Maruti Udhyog’s order becomes relevant which is placed for supply of Polybutadiene Resin based Electrocoat light grey. The appellants have also not stated, at any point, as to what this resin medium is. On the other hand, in their classification list No. 3/84-85 in the remarks column, it has been stated under the heading ‘Details of raw -materials’, “Various Pigments, Epoxy Resins, Polybutadiene Varnish, Solvents.” The fact that M/s. Maruti Udhyog had amended their order may not be of much help to the appellants because, admittedly, this amendment was put-forth after the adjudication proceedings were initiated with the issue of the show cause notice, and it has also not been shown by any correspondence as to why this amendment became necessary. The Chemical Examiner’s report also is to the effect that it is a Epoxy type resin which is different from saying that the product is Epoxy based resin. It will also not be sufficient for the purpose of exemption to merely indicate that Epoxy Resin is one of the ingredients when the notification is applicable only to Epoxy based primers. The Assistant Collector, with reference to the Standard technical authorities on this subject, like G.G. Hawley, had also pointed as follows :
“It will be seen that Epoxy is a thermosetting resin, while Polybutadiene is a thermo-plastic resin. Both are used for surface coating. Thermo property is also common to both the resins. Thus what the test result tries to convey is that the resin used is like Epoxy Resin i.e. it is a type like that and is not Epoxy Resin. This type of resin, in the light of the above technical literature and the order placed by M/s. Maruti Udhyog Limited, is undoubtedly Polybutadiene Resin. There is no doubt that Epoxy Resin is also used in the manufacture of the product in question. But it is used as a thinner as stated by the assessee in the process of manufacture given in the test memo.”
7. The record shows that there is no effective rebuttal of the Assistant Collector’s finding, in the absence of material evidence to show that the medium or the vehicle or the base of the primer is Epoxy Resin. In this view of the matter, therefore, there is no reason to interfere with the order passed by the lower authorities. The appeal is rejected.