2001 (6) TMI 96 - AT - Central Excise

Summary

Issues: Classification of demineralized water and soft water for duty liability under Central Excise Tariff Act, 1985; Applicability of exemption notifications; Invocation of proviso to Section 11A for non-intimation of manufacture and clearance.

In this case, the Revenue filed an appeal challenging the classification of demineralized water and soft water prepared by the assessee for duty liability under the Central Excise Tariff Act, 1985. The Commissioner held that based on the manufacturing process, the goods were more appropriately classifiable under Heading 2201.00 of the CET, rather than Heading 2851.00. The Revenue argued that soft water obtained through a cation exchanger should be classified under TSH 2851.00, as per the Act and supported by HSN explanatory notes. They also contended that demineralized water should also be classified under 2851.00 due to the ion exchange method used. The Revenue further raised issues regarding the applicability of exemption notifications and the invocation of the proviso to Section 11A for non-intimation of manufacture and clearance to the Central Excise Department.

Upon hearing both sides, the Tribunal considered the relevant case law, including the decision in the case of Gujarat State Fertilizers Ltd. and McDowell & Co. Ltd., to determine the classification under T.I. 2851.00. The Tribunal found that the mere process of removing minerals like Calcium and Magnesium to make water soft does not amount to manufacture under 2851.00. The Tribunal noted that the Chapter Note of HSN under 28.51 specifies the types of water covered under the heading, including distilled water, conductivity water, and water of similar purity treated with ion exchange media. The Tribunal concluded that the goods in question did not meet the criteria for classification under 2851.00 and upheld the Commissioner's classification under 2201.00. Therefore, the appeal by the Revenue was dismissed based on the lack of justification and evidence to support a different classification.

In summary, the judgment addressed the classification of demineralized water and soft water for duty liability, considering the specific processes involved in their preparation. The Tribunal emphasized the importance of meeting the criteria outlined in the Central Excise Tariff Act and relevant explanatory notes for accurate classification. Additionally, the judgment clarified the conditions for availing exemption notifications and the implications of non-intimation of manufacture and clearance as per Section 11A proviso.