S.C. Jain, Member (J)

1. The facts in brief are that the appellants started manufacturing the product known as 'Plastwel' some time in the year 1982, but they did not obtain any Central Excise licence under the belief that it would be covered under Tariff Item No. 68 and exempted. On 28-4-1983, the Assistant Collector of Central Excise, Ranchi, issued a show cause notice C.No. V(23)(15)29/83/2990 to the appellants, alleging inter alia that they had contravened the provisions of Rules 174, 9, 52-A, 226, 173-B, 173-C, 173-F and 173-G of Central Excise Rules, 1944, inasmuch as they had manufactured and removed a variety of cement known as 'Plastwel' falling under Tariff Item No. 23(2)-C.E.T. without having proper licence in form L-4 and without fulfilling other formalities under the various provisions of the Central Excise Law. It was alleged in the notice that the party had removed 232 bags each containing 50 kg. of 'plastwel' (cement) during the period from 13-8-1982 to 25-3-1983 valued at Rs. 68,059.08 involving Central Excise duty amounting to Rs. 29,945.99 by resorting to mis-statement.

2. The appellants in their reply mentioned that they never made any mis-statement; that they had submitted all the information which they were asked to submit and that their product was not cement but was a substitute for cement. They had obtained the know-how from the Birla Institute of Technology and the Small Industries Research Training Development Organisation who had developed substitute for cement. In respect of the classification of their product, the appellants stated that the same is not cement and, therefore, it did not fall under Tariff Item No. 23. The product manufactured by them is made from granulated blast furnace slag, fly ash. The granulated slag obtained from steel plants and fly ash are mixed with lime and gypsum in a certain proportion and then ground in a ball mill. A product cannot be called to be a cement which is made without using certain proportion of portland, clinker or portland cement. The cement as it is understood in the engineering and common parlance is a product which is made by calcination of some material or mixture or materials which contain lime, silica, alumina and clay. Calcination of clinker formation is a must in the manufacture of cement. Gypsum is added to control the setting properties. The product which the appellants manufactured is classifiable under Tariff Item No. 68 of the Central Excise Tariff but exempted.

3. The Deputy Collector did not accept the contention of the appellants and by his Order-in-Original No. 9/83 dated 6/7-12-1983 held that the product 'plastwel' manufactured by the appellants should be treated as a variety of cement and, therefore, should fall under Central Excise Tariff Item No. 23(2) and not under Item 68. He confirmed the demand of excise duty amounting to Rs. 29,945.99 under Rule 9(1) of the Central Excise Rules, 1944. A penalty of Rs. 500 was also imposed under Rule 173-Q(1) of the Central Excise Rules, 1944.

4. Being aggrieved by the said order of the Deputy Collector, the appellants filed an appeal before the Collector of Central Excise, Calcutta, who by his Order-in-Appeal No. 286/.BR/84 dated 29-5-1984 confirmed the findings of the Deputy Collector that the product manufactured by the appellants is a cement falling under sub-item (2) of Item 23 of the Central Excise Tariff'. However, he ordered that the demand for arrears of duty should be modified on the basis of price list No. 1/83 effective from 27-6-1983 approved @ Rs. 24.50 per bag of 50 Kgs.

5. Not satisfied with the said order passed by the Collector of Central Excise (Appeals), the appellants filed appeal before this Tribunal alleging therein that in the absence of definition for cement in the Central Excise Tariff, whether or not a particular product is cement is to be decided in accordance with the trade practice, i.e., whether or not the particular product is known as cement. Cement as known and re