Per Shri V.P. Gulati :

The issue in the appeal relates to the classification of the product which has been described as Alusil and is prepared by dispersion of wax in water with the addition of a few other items viz., CPGE 2, LPGE 16, Ahurlan B 334, Silicone Fluid, Stearic Acid. The classification of the same indicated in the show cause notice was under Tariff Heading 34.04. However, during proceedings, both the sides after taking note of the ingredients going into the manufacture of the product took the view that the goods could not be classified under 34.04. The Collector held out to the appellants, the classification according to him to be under 34.03. After analysing the use of the product, the learned lower authority has held the goods to be falling under Tariff Heading 34.03. The appellants had taken a plea before the learned lower authority that the same could not be considered as goods as the product has a very limited shell life of 10 days and that it was manufactured for captive use. They also took a plea that the longer period of limitation could not be invoked in as much as the appellants had in the classification list filed, declared their product as liquified wax. The learned lower authority has held the goods to be marketable and, therefore, excisable and has determined the classification of the same as under 34.03 as a lubricating agent and he has also held that there was suppression of facts on the part of the appellants.

2. The learned Senior Advocate for the appellants Shri Sivam, has pleaded that the appellants manufactured the goods by dispersing the wax in water along with a few other ingredients and the product degraded within a period of 10 days and the same could not, therefore, be brought to market for being sold. He has pleaded that no doubt the appellant had moved the product from one factory to the other for use in the other unit of the appellants and that by itself cannot determine the marketability of the goods. He has pleaded, the learned lower authority has gone by a mention in one of the technical books authored by one Shri Shenoy who has stated in his book "Technology of Textile Processing" that "vax emulsion" is one the axillary for textile industry. He has pleaded that the learned Collector has merely gone by the word wax emulsion to hold that the appellant's product would also be used widely and bought and sold so. He has pleaded the appellant's product should have been considered on its own characteristics for determining whether the same was marketable or not. He further pleaded it is now settled law that the burden is on the department to show that the goods are marketable.

3. He has cited in this regard the case of M/s. Bhor Industries Ltd. reported in 1989 (40) ELT 280 (SC). This has been again affirmed by the Hon'ble Supreme Court in the case of CCE Vs. Ambalal Sarabhai Enterprises reported in 1989 (43) ELT 214 (SC) at para 4. He has further urged that the order of the Hon'ble Supreme Court in the case of M/s. Moti Laminates Pvt. Ltd. and Others reported in 1995 (3) SCC 3. His plea is that the department has not discharged its burden while holding the goods as marketable, for that reason excisable. Regarding classification of goods he has pleaded that the competing items in respect of classification of the goods are 34.03 and 38.09. These competing items for convenience of reference is reproduced below :