Per Ms. Jyoti Balasundaram :

The appellants herein purchase duty paid Ultrawhite RNI and dilute the same by addition of water, and clear the following products from their factory.

i. Polywhite NSR

ii. Cidalene White RN and

iii. Ultrawhite CD.

Show cause notice was issued proposing classification of the above three products under CET sub heading 3204.90 attracting duty @ 35% BED + 5% SED. The Assistant Collector held that the Ultrawhite RNI even when diluted with water does not undergo any chemical change and it remains the same, and therefore no new product emerges. He held that the products cleared by the appellants are dilute Ultrawhite RNI of varying concentration classifiable under CET sub heading 3204.30 which covers "Synthetic Organic Products of a kind used as fluorescent brightening agent or as luminophores." He held that no duty was payable on the three products above mentioned and hence vacated the demand raised in the show cause notice. Revenue filed an appeal to the Collector (Appeals) who took the view that the respondents had manufactured new products and hence he allowed the appeal of the revenue. Hence this appeal by the assessees.

2. We have heard Shri M.P. Devna