2000 (2) TMI 472 - AT - Central Excise

Summary

Issues:
Classification of "Multinal Tablets" under excise law.

Analysis:
The appeal challenged the Order-in-Appeal No. 124/98 that upheld the excisability of "Multinal Tablets" but changed the classification from Chapter 30 to 21, reducing the penalty. The main issue was whether converting spirulina powder into tablets constituted manufacturing and the appropriate classification. The appellant argued that the conversion did not amount to manufacturing as the end product remained spirulina. The process involved adding diluents, preservatives, and binders, which were technologically necessary. The advocate cited precedents where similar processes were not considered manufacturing. They also referred to Supreme Court tests to determine manufacturing, emphasizing that the identity of spirulina did not change through tableting.

The appellant's managing director affirmed that the additives did not alter the nutritional value significantly, and the tablet remained pure spirulina. The advocate suggested classifying the product under food preparations due to the absence of added vitamins or iron compounds. The Revenue contended that the conversion into tablets created a new commercial commodity with altered properties. They cited a Tribunal case where a similar conversion was deemed manufacturing. The tablet's composition showed variations from the powder form, supporting the argument for a new product.

The Tribunal analyzed the submissions and records, concluding that converting spirulina into tablets did not constitute manufacturing. The active ingredient, spirulina, remained the same, and the slight changes in protein content did not alter the primary purpose of the product. Citing precedents and Supreme Court guidelines, the Tribunal determined that the addition of necessary substances for tableting did not amount to manufacturing. The decision in a related case further supported this finding. The insignificant increase in calcium content due to additives did not significantly enhance the nutritional value. Considering the absence of added vitamins or iron, the tabletting process did not result in a food supplement preparation. Therefore, the Tribunal set aside the Order-in-Appeal, allowing the appeal with appropriate relief as per law.