V.P. Gulati, Member (T)

1. These are appeals filed by the Collector of Central Excise, Ahmedabad against the orders of the Collector (Appeals), Bombay.

2. Brief facts of the case are that the respondents manufacture phenol formaldehyde for captive consumption out of raw materials - Melamine, Formaldehyde, Phenol, Methanol, Caustic Soda, Hexamin and Hydrochloric Acid for use in the manufacture of laminated sheets. The process of manufacture as seen from the record is as under :-

"Formaldehyde is pumped into reaction vessels and thereafter melamine is added with constant stirring. Hydrochloric acid in very small quantity is added to bring down the PH (to accelerate the reaction). Thereafter, the temperature is increased to 60° to 80°C, as required and thereafter the same is brought down to 60°C. At that time some quantity of caustic soda or methanol, as the case may be, is being added. In some cases the water is separated from formaldehyde and in remaining cases water is not taken out."

The chemistry of reaction for the formation of phenolic resins as given by the respondents as Annexure 'B' of the Appeal Memorandum is reproduced as Annexure 'A' to this Order. The Phenol Formaldehyd