Per V.K. Agrawal :

The Common issue involved in these nine appeals is whether the process of conversion of straight grade bitumen into air blown grade bitumen amounts to manufacture.

2.1 The facts in brief in Appeal No. E/4498/93-C are that M/s. Tiki Felt Industries, appellants (TFI), manufactured Bitumen Coated felt. They purchased duty paid hessain cloth, straight grade bitumen, fillers and mica as raw materials. The straight grade bitumen was converted into blown grade bitumen through oxidation, known as blowing process. Such blown grade bitumen was applied on both sides of the hessian cloth. A show cause notice dated 24.1.92 was issued to them for demanding duty in respect of Blown Grade Bitumen (BG Bitumen) falling under subheading 2713.20 of the Schedule to the Central Excise Tariff Act for the period from February, 1987 to September, 1991. The Collector, Central Excise, in impugned Order dated 10.3.93, confirmed the demand of Central Excise duty amounting to Rs. 2,84,981.23, imposed a penalty of Rs. 1,00,000/- and confiscated plant & machinery with an option to redeem the same on payment of fine of Rs. 25000/- holding that the process of conversion of straight grade bitumen into blown grade bitumen amounts to manufacture, relying upon the decision of the Appellate Tribunal in the case of Bitumen Products (India) Ltd. Vs. CCE, 1989 (44) ELT 504 (T). The Collector also held that longer period was invokable for demanding the duty as they had only declared their final product i.e. felt, and they did not at all declare blown grade bitumen produced by them.

2.2 Appeal No. E/3416/89-C

M/s. STP Ltd., Calcutta, filed a classification list effective from 25.4.86 in which Blown Bitumen packed in drums and bags was mentioned below Item 7 of the list claiming that no duty was payable. The C.L. was approved on 27.1.86 by the proper office. Subsequently a show-cause notice dt. 25.2.87 was issued for classifying the product under sub-heading 2714.90 of CETA. The Assistant Collector, under Order dt. 18.9.87, ordered that goods would be classifiable under sub heading 2713.21 (Packed) or 2713.22 (in bulk) and no duty would be chargeable as long as the BG Bitumen was made out of duty paid SG Bitumen. Another notice dt. 23.3.88 was issued to levy duty in absence of any notification. The Assistant Collector, under Order dated 8.11.88 held that bitumen packed in drums was classifiable under sub-heading 2713.21 attracting tariff rate of duty. The Collector (Appeals) also confirmed the Adjudication Order, under Order in Appeal No. 65/Cal 1/89 dt. 22.3.89 holding that mode of packing is a criterion for classification of petroleum Bitumen under different headings; that the Assistant Collector is correct in his observation that once an item is included in any tariff heading/sub heading, the question of further manufacture, origin, etc. would not arise.

2.3 E/22/90-C

The Collector, Central Excise, Kanpur, under impugned Order No. 8/89 dt. 6.10.1989, imposed a penalty of Rs. 15 lakhs on M/s. STP Ltd. Mathura, holding that Bitumen packed in drums is a different item than the bitumen in bulk as tariff provides for two items; that plea that packing does not amount to manufacture is not acceptable as the definition of manufacture in Section 2 (f) of the Central Excise Act is inclusive and not exhaustive; that there was no suppression of facts and as such entire demand was time barred.

2.4 E/1178/91-C

The Collector, Central Excise, Baroda, under Order No. 89/91 dt. 28.10.91, held that there had been a process of manufacture involved in the production of blown grade bitumen' from 'straight grade bitumen' and transformation into a new commodity commercially known as distinct having its own character and use other than as a binder used in road making process; that extended time limit for demanding duty is available as M/s. Tiki Tar Industries had not furnished the process of manufacture of blown grade bitumen in detail. The Collector confirmed the demand of du