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2016 (11) TMI 636 - CESTAT CHANDIGARHManufacture - Whether the conversion of paddy into rice amounts to manufacture as per section 2(f) of the Act or not? - Clandestine removal - 100% EOU - export of basmati rice - section 3(1) of the Central Excise Act, 1944 read with section 12 of the Customs Act, 1962 - Held that: - reliance placed on the decision of the case of The Commissioner of Income Tax vs. M/s.Cynamid India Ltd. [1999 (4) TMI 2 - SUPREME Court] where The deductions claimed by the assessee were in respect of the expenditure incurred by it in disseminating literature, pamphlets, etc., containing information on modern techniques and methods of agriculture designed for increasing the yield of rice amongst the cultivators and farmers who grow rice - held that assessee-company was entitled to weighted deduction under section 35-C - conversion of paddy into rice is not a distinct operation and the rice and husk remain in their natural form as a result of dehusking and are covered by the term 'agricultural product. The test of manufacture has been failed as the goods are not manufactured goods as per section 2(f) of Central Excise Act, accordingly, the question of excisability does not arise - decided in favor of appellant. Whether the rice/bran rice are excisable goods in terms of section 2(d) of the Act or not? - Held that: - if in the tariff, the rate of duty is left blank, in that case, the goods are not excisable goods. Admittedly in the case in hand, the rate of duty in the tariff is left blank, therefore, we hold that the rice is not excisable goods. This view also takes support from the various RTI applications filed by the appellant wherein it has been replied by the department that no unit is manufacturing rice is paying duty on the rice being 100% EOU, we hold that the rice is not excisable goods - decided in favor of appellant. Whether the extended period of limitation is invokable in the facts and circumstances of the case or not? - Held that: - the appellant has succeeded on merits, therefore, we are not going into the issue of limitation. Therefore, the issue No.3 is kept open for the appellant. Appeal allowed - decided in favor of appellant.
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