1995 (10) TMI 127 - AT - Central Excise

Summary

Issues Involved:
1. Classification of "Enzyme Tablets" under Tariff Heading 3402.90.
2. Whether the conversion of enzyme powder into tablets constitutes "manufacture" under Central Excise law.

Issue-wise Detailed Analysis:

1. Classification of "Enzyme Tablets" under Tariff Heading 3402.90:

The appeal challenges the order dated 31-3-1993 by the Collector (Appeals), Bangalore, which classified "Enzyme Tablets" under Tariff Heading 3402.90 of the Central Excise Tariff Act, 1985. The appellants did not contest this classification during the hearing, thus it remains unexamined and accepted as correct.

2. Whether the conversion of enzyme powder into tablets constitutes "manufacture" under Central Excise law:

Appellant's Contention:
The appellants argued that converting enzyme powder into tablets without adding new material and merely packaging them for marketability does not amount to manufacture. They claimed that no new goods arise from this process, as there is no change in the name, character, or use of the product. The enzyme powder, imported by M/s. Bausch & Lomb India Ltd., is sent to the appellants for job work to make it into tablets and put them into strips for marketability. They emphasized that the supplier has already paid customs and countervailing duty on the powder, and thus no fresh classification or duty should be imposed on the job worker.

Respondent's Contention:
The respondent argued that the powder form is not marketable and must be converted into tablets and put into strips in specific measures for use in cleaning contact lenses. They relied on the Supreme Court's ruling in Collector of Central Excise v. East End Paper Industries Ltd., which supports the view that such conversion constitutes manufacture.

Tribunal's Analysis:
The Tribunal examined the submissions and the Collector's order. It noted that the enzyme powder becomes marketable only after conversion into tablet form and is sold as tablets in specific measures. The Tribunal referenced several judgments, including East End Paper Industries, Eastern Minerals, Associated Soapstone Distributing Company Pvt. Ltd., Kher Stone Crusher, Ajanta Marble & Chemical Industries, and Union of India v. Babubhai Nylchand Mehta, which support the view that such conversions amount to manufacture.

Separate Judgments:

Member (Judicial):
The Member (Judicial) upheld the Collector's order, stating that the conversion of enzyme powder into tablets for marketability constitutes manufacture. The classification under Heading 3402.90 was not challenged and thus sustained. The appeal was rejected.

Vice President:
The Vice President disagreed, finding merit in the appellant's arguments. He emphasized that mere conversion of powder into tablets does not result in a new commodity with a distinct name, properties, and use. He cited the Supreme Court's rulings that not every process amounts to manufacture and referenced the Tribunal's decision in Brook Bond India Ltd., which held that converting coffee powder into tablets does not constitute manufacture. He concluded that the process described does not amount to manufacture and accepted the appeal.

Third Member (Technical):
The Third Member was called upon to resolve the difference of opinion. He examined the arguments and legal principles, including the maxim "Expressio Unius Est Exclusio Alterius" and relevant case law. He concluded that the conversion of enzyme powder into tablets does not amount to manufacture, agreeing with the Vice President. The appeal was accepted based on the majority opinion.

Final Order:
In view of the majority opinion, the appeal was accepted, concluding that converting enzyme blend powder into tablets does not constitute a process of manufacture under Central Excise law.