Judgment

Arijit Pasayat, J.—Appellant calls in question legality of the judgment rendered by Customs, Excise and Gold (Control) Appellate Tribunal, Calcutta (in short the ‘CEGAT’). Initially there was a difference of opinion between two Members i.e. Technical Member and the Judicial Member and the matter was referred to a third member. The third member agreed with the Technical Member and by majority the decision went against the assessee-appellant. The judgment is reported in 2000 (123) ELT 789 Tribunal (Castrol India Ltd. v. Commissioner of Central Excise, Calcutta-I).

2. The factual position in a nutshell is as follows :

The appellant is engaged, inter alia, in the manufacture of blended or compounded lubricating oils. It also processes a product called ‘Super TT’ which the appellant claimed to be a blended lubricating oil ordinarily used for ­lubricating. The undisputed process of manufacture of the said product as stated by the appellant is as under :

“Base Oils are taken to the blending kettle, heated to remove moisture. Additives are added and mixed well. Temperature reduced and MTO and green dye added and mixed well, to get the final product.”

3. Admittedly, the flash point of the ‘Super­ TT’ is below 94°C. Therefore, assessee appellant claimed that the same is not classifiable under Heading 2710.60 of the Tariff under Customs Tariff Act, 1985 (in short the ‘Tariff Act’) as the same covers lubricating oils having flash point more than 94°C. As such, the product was claimed to be classifiable as ‘others’ under sub-heading 2710.99. Revenue disputed the position and held that the benefit of the Exemption Notification No. 120/84-CE dated 11.5.1984 is applicable only to the lubricating oils falling under sub-heading 2710.60, as there is no other heading for lubricating oil in the Tariff Act. The appellant’s stand was that the said Exemption Notification extends the benefit to all types of lubricating oils, irrespective of their classification. As its product is admittedly a lubricating oil, the scope of the Notification cannot be restricted to the lubricating oils falling under a particular tariff entry.

4. Two show-cause notices issued related to demand of duty against the assessee in ­respect of their blended “Super TT” which was cleared at “nil” rate of duty during different periods. The said notices culminated into two different orders whereby proposed amount of duty and personal penalty were confirmed. The dates of show-cause notices, the period involved, the duty demanded and the penalty demanded are as follows :—

Sl.No. Date of show Period involved Demand of duty Penalty cause notice

1. a) 29.1.1992 1.8.1991 to Rs. 20,46,994.23 Nil 31.12.1991

b) 3.8.1992 1.1.1992 to Rs. 10,77,390.00 Nil 29.2.1992

c) 1.10.1992 1.3.1992 to Rs. 19,96,362.88 Nil 31.8.1992

d) 25.2.1993 1.9.1992 to Rs. 19,83,411.76 Nil 31.1.1993

Total Rs. 71,04,159.47

2. 28.1.1994 7.1.1989 to Rs. 47,59,343.40 Rs. 30 lakhs 31.7.1991

5. Assessee preferred two appeals before the CEGAT. It was submitted that for a long time Exemption Notification dated 16.3.1976 in relation to Item No. 11B and the rate of duty was nil was held applicable to it. T