Page 193 - ELT_1st July 2020_Vol 373_Part 1

2020 ] VENKATESWARA INDUSTRIAL PRODUCTS P. LTD. v. C.C.E.,C.&S.T.,HYDERABAD-III 103

Explanation - For the purposes of the notification, “speciality oil”
means any preparation made by blending or compounding of mineral
oils falling under Chapter 27 of schedule to the Central Excise Tariff Act,
1985 (5 of 1986) with other oils in any other substance and is intended for
industrial uses (other than for use as lubricant and of which the lubrica-
tion function, if any, is only secondary in nature.
20. Since CFC falls under 38.23 benefit of 287/86 is not available. I also
find that neither CFC nor CCC conform to above description of speciality
oils. One of the conditions for specialty oil is that it is intended for industri-
al use (other than for use as lubricant and of which lubrication function, if
any, is only secondary in nature). Even if the classification of CFC is accept-
ed under 34.03, it would mean that its main function is lubrication. In that
event it will not be a speciality oil. As regards CCC, the decision is similar
i.e., since it is classifiable under 34.03 its main function is lubrication, and it
goes out of the purview of speciality oil. In either case, benefit of Notifica-
tion 287/86 is not available, neither to CFC nor to CCC.”
5. We have considered the arguments on both sides on this point of
classification. We do not agree with the Learned Counsel for the appellant that
the classification has to be decided by a Chartered Engineer. A Chartered Engi-
neer can give his expert opinion regarding the nature of the material but the clas-
sification is to be done by the officers or the adjudicating authority or the appel-
late authorities. We do not find that the adjudicating authority has in any way
disputed the Chartered Engineer’s certificate. Drawing from the Chartered Engi-
neer’s certificate he concluded that the product in question is not classifiable as
lubricating preparation but as a miscellaneous chemical under Chapter Heading
3823. A plain reading of Chartered Engineer’s certificate also does not convince
us that CFC is in the nature of a lubricant. Therefore, we find no force in the ar-
gument of the appellant and we find that the adjudicating authority was correct
in classifying the product under Chapter Heading 3823. Therefore, the question
of exemption under Notification 287/1986-C.E. does not apply in this case. We
also note that classification was not an issue in the show cause notice and the
appellant has also not made out a case to reclassify the goods and claim benefit.
6. We now proceed to discuss and decide other issues related to the
two demands.
7. Show Cause Notice No. 150/92, dated 8-4-1993 demanded duty of
Rs. 17,86,832/- and proposed confiscation of land, building, plant and machinery
under Rule 209 of Central Excise Rules, 1944 and imposition of penalty under
Rules 9(2), 52A, 173Q and 209 of Central Excise Rules, 1944. In the impugned or-
der the adjudicating authority has finally confirmed demand of Rs. 7,51,833/-
(BED : Rs. 6,53,768/- + SED : Rs. 98,065/-) along with interest under Section
11AB from VIPPL. He also imposed penalty of Rs. 2 lakhs on VIPPL under Rule
9(2), 52A, 173Q & 209 of Central Excise Rules, 1944. Further, he imposed personal
penalty of Rs. 1 lakh on Shri C. Ramdas, Director of VIPPL under Rule 209A. He
confiscated the goods valued at Rs. 2,72,220/- which were provisionally released
and imposed a fine of Rs. 75,000/- which has to be recovered by enforcement of
bond and bank guarantee. He, further ordered confiscation of plant, machinery,
land and buildings under Rule 173Q(2) and gave VIPPL an option to redeem the
same on payment of fine of Rs. 1 lakh. He released the vehicle seized uncondi-
tionally and imposed no penalty on Shri K. Sailu. As far as this demand is con-
cerned, Learned Counsel for the appellants submits that of the total amount of

EXCISE LAW TIMES  1st July 2020  193