Excise Duty is Applicable Or Not, Central Excise

[MAYUR DODIYA]

Dear Expert,

 I want to know that Excise Duty is applicable or Not on the following procedure:-

Mr X. is producing the following finished Goods:-

       NAME                                          GRADE

1. Sodium Chloride I.P. (salt) - above 99.5 percent   [ Chapter Heading no.- 25]

2. Potassium Chloride I.P.     - above 99.5 percent    [ Chapter Heading no.- 31]

3. Ammonium Chloride I.P.   - above 99.5 percent

And the following Raw Materials is used:-

          NAME                                       GRADE

1. Sodium Chloride I.P. (salt) - 98.5 to 99 percent

2. Potassium Chloride I.P.     - 98 to 99 percent

3. Ammonium Chloride I.P.   -  99 percent

Now Mr.X only Purifies the above Raw materials and produce the finished goods. And this above Salt is Purified by Washing Centrifuge & Drying. During purification of Raw Materials there is no change in Chemical Composition or Structure of the materials in the process.

Posts / Replies

[Viswanathan Nemmara]

For the purpose of making any product excisable to Central Excise duty, it is the upper most requirement that a new product having a different name, character or use is obtained as a result of the process of manufacture. Mere removing of impurities, does not bring into existence a new product and, therefore, processes undertaken by Mr.X, do not amount to manufacture. This was the view expressed by the Tribunal in the case of S.D. Fine Chem Pvt. Ltd  = (1995 (9) TMI 197 - CEGAT, NEW DELHI)  [1997 (91) E.L.T. 610 (T)] wherein it has been held that purification of bought out chemicals through distillation or re-crystallisation does not amount to manufacture.

This view has been followed by CESTAT (NZB) in Dabur India Ltd  (2004 (7) TMI 487 - CESTAT, NEW DELHI) =[2004 (174) E.L.T. 261 (Tri. - Del.)] also.