ORDER
G.R. Sharma, Member (T)
1. This appeal is directed against the impugned order passed by the Collector (A) holding that “The Chemical Examiner cannot obviously give any specific percentage of Mahuwa oil in the sample, if the sample did not contain Mahuva oil at all as per I.S.I. standards.”
2. The facts of the case in brief are that the appellants manufacture vegetable oil under chapter Heading 1504.00. The Notification No. 115/86-C.E. granted exemption from the Central Excise duty to the vegetable products in the manufacture of which certain minor oils including rice bran oil are used. The appellants with a view to availing exemption under this notification filed declaration with the Asstt. Collector indicating mixture formula of oils as “1. Rice Bran Oil 5%. 2. Mahuwa Oil 8%. 3. Other Oils 87%.” A sample was drawn from soft oil tank and sent for chemical analysis to the Chemical Examiner for testing whether it contains Mahuwa or any other oil. Chemical Examiner under his letter dated 18-12-1986 reported that “The sample is yellow coloured thick oily liquids. It is other than Mahuwa oil.” On perusal of this report, the Superintendent, Central Excise alleged that the appellants were not entitled to the concession under Notification No. 115/86 and issued a SCN on 26-1-1987 which was answerable to the Asst. Collector.
3. In reply to the SCN, the appellants submitted that the Chemical Examiner report based on the visual observations about the colour of oil cannot be relied upon and that the Chemical Examiner ought to have found out the contents of the specified oils in the mixture. The Asstt. Collector after hearing the pleas of the appellants confirmed the demand. The appellants filed an appeal before the Collector (Appeals) who held that “However, considering the plea taken by the appellants that the report is vague and not detailed one. I order that the sample be got retested and the report of the Chemical Examiner should be specific on the point of composition as far as ‘Rice Bran Oil’ and ‘Mahuwa Oil’ contents are concerned. I, therefore, remand the case back to the Assistant Collector for getting the sample retested in order to ascertain the exact percentage of different oils contained in the sample and decide the case de novo, after observing the principles of natural justice. Pursuant to this, the sample was sent to the Chemical Examiner for retest. The Chemical Examiner in his letter dated 7-5-1990 reported as under :-
“It is stated that the sample had already been rechecked by a Gazetted Officer and it did not conform to the specifications of Mahuwa Oil in respect of Iodine value as laid down in IS : 545.”
4. The Additional Collector on receipt of this report held that “I have examined this position and fact in view of the specific certificate of the Chemical Examiner that sample did not conform to the specification of Mahuwa Oil in respect of Iodine value as laid down in IS: 545, the compliance of the Collector (Appeals) order dated 23-2-1989 was complete. He, therefore confirmed the demand of Rs. 91,326.00 holding that this was the amount of wrong availment of exemption under Notification No. 115/86. In appeal, the Collector (A) held as indicated above.
5. Arguing the case, Shri Bipin Garg, ld. Advocate submits that the SCN was issued by the Range Superintendent was without ‘jurisdiction inasmuch as the amount of duty demanded was beyond his pecuniary jurisdiction. He submits that the order passed on that basis was invalid. He submits that the finding of the Collector (A) that the sample was retested by the Chemical Examiner was wrong. He submits that this finding was not supported by any documents. He submits that the second report of the Chemical Examiner dated 7-5-1990 simply reiterates the earlier conclusions by stating that the sample had already been rechecked by the Gazetted Officer. He submits that it was the duty of the Collector(A) to have got the appellate order complied with. He submits that the chemical examiner did not retest the sample so as to make it available to the adjudicating authority full data on which his conclusion was based. He submits that in the absence of specific detailed report after retesting the duplicate sample, the appellants’ contention that the contents of the soft oil storage tank from which the sample was drawn were nothing but Mahuwa Oil has to be accepted. He submits that the department has not brought any evidence other than chemical test report on record to prove their case. He, therefore, prays that the appeal may be allowed.
6. Shri V.M. Oudhoji, ld. JDR submits that the sample was taken in the presence of the appellants; that the sample was tested; that the report of the Chemical Examiner was received which indicated that the sample did not contain Mahuwa Oil. Ld. JDR submits that the declaration was filed by the assessee stating that the vegetable product manufactured out of mixture containing 8% Mahuwa Oil was wrong. He submits that when the sample was re-tested and the Chemical Examiner had not only reported the earlier but had also referred to Iodine value and IS: 545. He submits that the plea of the appellant is not tenable to say that no second test was undertaken and the earlier findings were reiterated. He, therefore, submits that the lower authorities have rightly accepted the test report and hold that the concession under Notification No. 115/86 was not admissible to the appellants. He, therefore, prays that the appeal may be rejected.
7. Heard the rival submissions. Perused the declaration filed by the appellants on 2-9-1986 including mixture formula and also Notification No. 115/86 and test report. The first test report was dated 18-12-1986 which indicated “The sample is yellow coloured thick oil liquid. It is other than Mahuwa oil. Rammant retained.” The second test report indicated that “The sample had already been rechecked by a Gazetted Officer and it did not conform to the specifications of Mahuwa Oil in respect of Iodine value as laid down in IS: 545.” The main contention of the appellants before us that no second retest of the sample was undertaken by the Chemical Examiner. We find that the sample was rechecked. We also note that iodine value was also examined in terms of IS : 545. Thus, we find that the Chemical Examiner’s report is not reiteration of the first report. On the question whether different constituents should have also been indicated, we note that the sample taken was for determining the contents and percentage of Mahuwa Oil and not for any other thing. Since the sample did not contain any Mahuwa Oil, therefore the question of determination of its contents as percentage does not arise. Looking to the facts and circumstances of the case, we do not find any legal infirmity in the impugned order. In the circumstances, the impugned order is upheld and the appeal is rejected.