Case: STP Limited Vs. Collector of Central Excise, Patna and Others

(1) Coal and coke not elseTen rupees per metric(2) Petroleum coke, other Twenty per cent adthan calcined petroleum valorem plus two(3) Calclined petroleum Twenty per cent ad(4) Asphalt and bitumen Two hundred rupees(including cutback per metric tonne(5) Tar distilled from coal One hundred rupees peror lignite and other metric tonneand blends of pitch withcreosote oils or with otherThe Exemption notification is as follows:Tar is exempt from duty TARIn exercise of the powers conferred by Rule 8 (1) of the Central Excise Rules. 1944, falling under Item 11 with effect from the 24th April, 1962 from the whole of the excise duty leviable thereonThe appellants case before the excise authority was that its products were fully exempt from excise duty by virtue of the above notification. The case of the Department on the other hand, is that the goods manufactured by the appellant did not come within the ambit of Tariff Item 11. Therefore, there is no question of granting any exemption from excise duty to these production. The dispute ultimately went to the Tribunal. The Tribunal, after hearing the parties and taking into consideration. the report of the Chemical Examiner, came to the conclusion that some of the goods manufactured by the appellant came within the ambit of clause (5) of Tariff Item 11 and, therefore, were exempt from excise duty. The Tribunal, however, held that no relief could be given to the assessee in respect of some of the products in view of an earlier decision in the case of Indian Aluminium Co. Ltd. vs. Collector of Customs Cochin 1988 (38) ELT 68 (Tribunal). The relevant part of the order of the Tribunal is as under:We do not see any reason to deviate from the abovereferred to decision. Respectfully fowling the same. We uphold the classification of items at serial nos. 3 to 8 under item 68, OET. Notification No.121/62 applied only to tar falling under Item No.11(5). Therefore, it does not apply to the subject pitches. *Sl. No Description Gift of the resultsin the of the products results of chemical8. Electrode Pitch The sample has theThe Tribunal did not give any separate reasons of its own for coming to its decision but merely followed the judgment of another Bench of the Tribunal in the case of Indian Aluminium Co. Ltd. v. Collector of Customs, Cochin, 1988 (38) ELT 68 (Tribunal). In that case, it was held that coal tar and coal tar pitch were two separate commodities. Technical literature showed that pitch was obtained from distillation of coal tar. No evidence had been produced to show that from the pitch, which was the residuary product of distillation of tar, any further distillation product could be obtained. The coal tar comprised of many constituents and if any part of these constituents were removed by distillation. then some constituents would remain in it This tar could be considered as partially distilled tar and remaining identificable constituents could be distilled out of it. So far as the pitch was concerned. No further identificable products were obtained from the same on distillation for it to be considered as partially distilled tar.It was further held that the term partially distilled tar as used in Item 11(2) of the central Excise Tariff had not been defined in any technical book. Therefore, it had to be understood in the context of distillation process and coal tar as stated above. There was no reason for considering coal tar pitch as partially distilled tar. it was an item distinct from coat tar or partially distilled tar.

Court's reasoning:
We are unable to uphold this distinction for another reason. According to Webster Comprehensive Diction International Edition coal tar means the black viscid pitch distilled from bituminous coal. and yielding a large variety of organic compounds used in the making of dve stuffs explosives flavoring extracts, drugs, plastics etc. Therefore, in a sense coal tar itself is a variety of pitch By distillation of coal tar, a type of pitch is obtained. That must come within the phrase tar distillation product Moreover, if there is any doubt in the construction of any provision of taxing statute, that doubt must be resolved in favour of the assessee.