G.P. Agarwal, Member (J)

1. Both the captioned appeals are directed against the common impugned Order-in-Appeal and the short point involved in these appeals is -

Whether the appellants are entitled to the benefit of Notification No. 35/85-C.E., dated 17-3-1985 as amended by Notification No. 78/86-C.E., dated 10-2-1986 in respect of 'liquid gold' which according to the appellants should be classified as 'ceramic colour'.

2. Short facts leading to the controversy are that both the appellants are manufacturers of liquid gold'. They are registered as a Small Scale Industry. For the manufacture of liquid gold primary gold is required as raw material which is allotted under quota system on quarterly basis by the Gold (Control) Administrator. The manufacturing as well as the marketing of liquid gold is subject to the provisions of the Central Excises and Salt Act, 1944.

3. Appellants No. 1 M/s National Gold Industries, Agra filed their Classification list No. 180/86 w.e.f.' 25-10-1986 classifying liquid gold under sub-heading 3207.90 claiming to be ceramic colour and additives (chemicals) under sub-heading 3801.90 of Central Excise Tariff Act, 1985 and claimed the exemption from payment of whole of Excise duty under Notification No. 35/85-C.E., dated 17-3-1985 as amended by Notification No. 78/86-C.E., dated 10-2-1986. However, the Assistant Collector ordered classification of the liquid gold under sub-heading 3207.90 and additives (chemicals) under sub-heading 3801.90 respectively and after holding so rejected the claim for exemption under the said Notification vide his Order-in-Original No. E/Val/87 dated 21-1-1987.

4. Likewise the other appellants M/s Indian Ceramic House also filed their Classification List No. 181/86 w.e.f. 15-10.1986 classifying liquid gold under sub-heading 3207.90 claiming to be ceramic colour and also claimed exemption from payment of whole of Excise duty under the aforesaid Notification No. 35/85-C.E., dated 17-3-1985 as amended by Notification No. 78/86-C.E, dated 10-2-1986. However, the Assistant Collector ordered for classification of liquid gold under sub-heading 3207.90 and rejected the claim for exemption under the said Notification vide his Order-in-Original No. 4/Val/87 dated 22-1-1987.

5. Against the said Orders passed by the Assistant Collector both the appellants filed their separate appeals before the Collector of Central Excise (Appeals), New Delhi but without success. Hence the present appeals.

6. Shri A.K. Jain, learned Counsel for the. appellant first drew our attention to the findings recorded by the Assistant Collector and confirmed by the Collector (Appeals). The said findings of the Assistant Collector runs as follows -

"It is not disputed by the party that the liquid gold is covered under subheading 3207.90. Sub-heading 3207.90 defines that liquid lustres and similar preparations of a kind used in the Ceramic Colour or glass industry etc. Party has also confirmed that their product is being used in the ceramic/glass industry. Explanatory notes on the above subject/sub-heading clearly defines the liquid lustres stating therein that these are solutions or suspensions of metallic compounds in spirit or turpentine or other organic solvents, used for decorating ceramics or glassware. The most widely used, are gold, silver, alumimium or chromium lustres. Since the description given of the liquid gold as well as and use shown by the, party clearly tally with the liquid lustre, therefore, order its classification accordingly. Further there is no dispute regarding classsification of additives (chemicals). I, therefore,, order classification of the liquid gold under sub-heading 3207.90 and additives (chemicals) under sub-heading 3801.90 respectively. I farther reject the claim for exemption under Notification No. 35/85 as amended vide 78/86 dated 10-2-1986. The classification list duly approved is also enclosed herewith."

7. On appeal the Collector had confirmed the said findings by stating as foll