Harish Chander, Member (J)

1. M/s Apar Private Limited has filed an appeal being aggrieved from Order-in-Appeal No. A-2028/BII-236/82 dated 14th December, 1982 passed by the Collector of Central Excise(Appeals), Bombay.

2. Briefly the facts of the case are that M/s Apar Private Limited through its Division, Special Oil Refinery filed a classification list under protest for Power Oil Transformer Oil (T.I.8) vide their letter dated 17.4.1978. The appellants had claimed that since the transformer oil base stock is already duty paid no further duty should be recovered on the transformer oil as the process of conversion does not amount the 'manufacture' within the meaning of the Central Excises and Salt Act, 1944. A Show Cause Notice dated 7.2.1979 was issued to appellants disputing the stand taken by them and desiring them to show cause as to why Central Excise duty at the appropriate rate should not be recovered on the transformer oil (T.I.8) manufactured by them out of duty paid base oils falling under a different tariff item viz. HA4(a). The appellant had replied to the Show Cause Notice vide their letter dated 18.4.79 and a personal hearing was granted by the Assistant Collector and at the time of hearing the appellant reiterated the contentions made in the reply to the Show Cause Notice and had argued that the goods Transformer Oil is converted from Transformer Oil Base Stock which is already duty paid. The conversion of Transformer Oil Base Stock to Transformer Oil does not amount to manufacture, and a new product does not come in existence . The appellant had relied upon the Supreme Court's judgment in the case of Union of India v. Delhi Cloth and General Mills Co. Ltd. and had argued that 'manufacture implied a change but every change of an article is the result treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having distinctive name, character or use'. It was further argued that the decision of the Supdt. Central Excise, Esso Refinery, vide letter No. C.Ex.(oil)20/T.O/70/340 dated 3rd March, 71 was a valid decision and the same cannot be set aside by the Assistant Collector Central Excise, as he has no powers of review under Central Excise and Salt Act, 1944. It was further argued that Physical and Chemical properties of the product Transformer Oil Base Stock and Transformer Oil falling under T.I. No. 11A4(a) and T.I.8 respectively are the same. The Specifications in terms of viscosity, flash point, flame height are the same for both products so there was no new product corning from Transformer Oil Base Stock which was commercially and physically different from that. Both the products were the same since they only purify Transformer Oil Base Stock by adding caustic soda. As no new product came into existence from that conversion, there was no duty leviable on the Transformer Oil. The learned Assistant Collector did not accept the contentions of the appellant. He had observed that the Transformer Oil Base Stock confirms to the specifications in terms of viscosity, flash point, flame height under Central Excise Tariff Item No.8. So far as it had also been classified under T.I.8 and duty had also been paid under T.I.8 but due to budgetary change on 1.3.78, the Transformer Oil Base Stock was taken into the T.I.11A4(a) and as such there was no dispute regarding classification of Transformer Oil Base Stock under T.I.11A4(a). The learned Assistant Collector had further observed that there was difference between Transformer Oil Base Stock and Transformer Oil, and he was of the view that the Supreme Court judgment cited by the Appellant does not help them. In the same judgment it was also held that if the processing of the goods results in a different commercial article or commodity which is known to the market as such then such processing amounts to 'manufacture'. In the present case Transformer Oil Base Stock after the processing resu