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PETITIONER: M/S. STP LIMITED

       Vs.

RESPONDENT: COLLECTOR OF CENTRAL EXCISE, PATNA & ORS.

DATE OF JUDGMENT:       02/12/1997

BENCH: S.P. BHARACHA, SUHAS C. SEN

ACT:

HEADNOTE:

JUDGMENT:                THE 2ND DAY OF DECEMBER, 1997 Present:               Hon’ble Mr. Justice S.P. Bharucha               Hon’ble Mr. Justice Sushas C.Sen S. C.  Birla, Subrat  Birla, Ms.  Vipin Gupta, Advs. for the appellant K.N.Bhat,   Additional    Solicitor   General,   K.N.Bajpai, R.N.Verma, V.K.Verma, Advs. with him for the Respondents.                       J U D G M E N T      The following Judgment of the Court was delivered: SEN, J.      The appellant  is a  Company engaged  in manufacture of coal tar  products.  An exemption notification was issued by the Central  Government exempting  tar falling  under Tariff Item 11  of Central  Excise Tariff  from the whole of excise duty leviable thereon.  Tariff Item No.11 is: "------------------------------------------------------- Item    Description of Goods       Rate of duty ------------------------------------------------------- 11.   COAL (EXCLUDING LIGNITE)       AND COKE ALL SORTS,       INCLUDING CALCINED       PETROLEUM COKE: ASPHALT,       BITUMEN AND TAR-      (1) Coal and coke not else-    Ten rupees per metric          where specified            tonne.     (2)  Petroleum coke, other      Twenty per cent ad          than calcined petroleum    valorem plus two          coke.                      rupees per metric                                     tonne.     (3)  Calclined petroleum        Twenty per cent ad          coke                       valorem.    (4)   Asphalt and bitumen        Two hundred rupees          (including cutback         per metric tonne.          bitumen and asphalt)          natural or produced          from petroleum or          shale.   (5)    Tar distilled from coal     One hundred rupees per          or lignite and other        metric tonne.

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        mineral tars, including          partially distilled tars          and blends of pitch with          creosote oils or with other          tar distillation products. ----------------------------------------------------------- The Exemption notification is as follows: "Tar is exempt from duty TAR                          121/62-CE, dt. 13.6.62      In 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 thereon".      The appellant’s  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 above-      referred 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."      The goods  mentioned in  Serial Nos.  3  to  8  of  the Chemical Examiner’s Report were as under: ----------------------------------------------------- Sl. No      Description          Gift of the results in the      of the products      results of chemical classi-                          test fication list. ----------------------------------------------------- 1.            xxx                  xxx 2.            xxx                  xxx 3.          Soft Pitch           The sample is coal tar                                  pitch 4.         Soft Medium Pitch        -do- 5.         Hard Pitch               -do- 6.         Hard Medium Pitch        -do- 7.         Special Hard Pitch     The sample is coal tar                                   pitch 8.         Electrode Pitch        The sample has the                                   characteristics of coal                                   tar pitch --------------------------------------------------------      The 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,

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1988 (38)  E.L.T. 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.      On behalf  of  the  respondents,  strong  reliance  was placed on  this judgment  and it was contended that what the appellants had manufactured was various types of pitch which did not  come within  the ambit  of Tariff  Item 11(5)  and, therefore, did not qualify for exemption.      On behalf  of the  appellant our attention was drawn to adjustment of  this Court  in the case of Steel Authority of India limited  v. Collector  of Excise  Bolpur. West  Bengal 1997 (91)  E.L.T. 529  (S.C.) where  it was  held  that  the exemption notification  exempted ’tar’ falling under Item 11 of the  First Schedule  to the central Excises and Salt Act. 1944. The  meaning of  ’tar’ had  to be  gathered  from  the Tariff description  given in  clause 5 of Tariff Item No.11. An inclusive  definition  had  been  given  to  ’Tar’  which included "partially  distilled tars and blends of pitch with craosote oils  or with  other  tar  distillation  products". Therefore, ’tar’  would include  everything which  has  been included in  the extended  definition.  Having regard to the wording of  the Notification  and also  the wording  of  the Tariff Item  No.11.   the  product  of  the  assessee  (PCM) qualified for the benefit of the Exemption Notification.      On behalf  of the  respondent, a distinction was sought to be drawn between tar and products made out of pitch.  The contention is that what the appellants had manufactured were not tar  distilled from coal.  These products also could not be  regarded   as  blends   of  pitch   with  creosote  oil. Therefore, these products could not given the benefit of the exemption notification.      We are  unable to  uphold this  contention. The  Tariff heading speaks of "Asphalt, Bitumen and Tar". "Tar" has been given an  expanded definition  in clause  (5). Tar distilled from coal  or lignite  or any other mineral will come within the  ambit  of  this  definition.    The  inclusive  clause, thereafter, extends  the definition  to partially  distilled tars and  blends of  pitch with  creosote oils or with other tars and  blends of  pitch with  creosote oils or with other tar distillation  products,  It is not in dispute that pitch is obtained  by distillation  of tar.  It has been argued on behalf of  the respondents  that the residue of distillation of tar  is pitch.   We  fall to  see this  fine distinction. Pitch is  brought about  by distillation  of tar.    If  the contention of  the respondent  is to be upheld, it will have

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to be  held that  even though  pitch  is  brought  forth  by distillation of tar.  It is not "tar distillation product".      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.      In the  premises. We  are of  the view  that the appeal must succeed.      The judgment  under appeal is set aside on the point in dispute.   The appeal  is allowed, there will be no order as to costs.