9911796707
TMI Blog1988 (3) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... firm stated in his written statement recorded on the spot that they had been manufacturing starch gum since the year 1973 and that the manufacture was of the two kinds i.e. one L.N. brand with the aid of power and the other HVS brand without the aid of power. They furnished sale figures from the year 1980-81 to 20-7-1985. He also stated that their main raw material was starch and the other raw materials were dextrine and borax. They had not obtained Central Excise licence for the manufacture of starch gum, nor had filed any declaration to that effect. On a reasonable belief that the said starch gum falls under Tariff Item 15C of the Central Excise Tariff (as it then stood) and manufactured with the aid of power quantity of 2200 kgs. of st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i R.H. Mehta partner of the firm in his statement dated 22-7-1985 admitted that power was being used in or in relation to manufacture of these modified form of starch in their premises. In view of the foregoing facts and circumstances of contravention of provisions of Rules 174, 9, 52A, 53, 173B, 173C and 173G of Central Excise Rules, 1944 were alleged in the show cause notice. On adjudication the Collector of Central Excise, New Delhi held that the two products manufactured by the appellants fall under Tariff Item 15C and duty was accordingly leviable thereon. The appellants have suppressed their manufacturing activity from the department; therefore, duty was demandable under Rule 9(2). The seized goods were liable to confiscation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tured by the appellants is a modified starch inasmuch as borax has been added as a modifying agent which modifies the viscous property of starch and, therefore, the product though commercially named by the appellants as gums are clearly modified starches and would, therefore, be covered by the tariff description of 15C. Since modified starches are specifically mentioned within the Tariff Entry there can be no dispute that these are liable to Excise duty even if they are made from starch. The case law relied upon by the learned advocate in 1983 E.L.T. 1123 mentioned supra does not have any bearing now in view of the larger Bench/judgment in the case of Guardian Plasticote Ltd. v. C.C.E., Calcutta [1986 (24) E.L.T. 542]. This judgment of larg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the aid of power. It is specifically mentioned so by the Seizing Officer in his seizure report and in the statement dated 22-7-1985 of Shri R.H. Mehta, partner of the appellants firm. These have already been extracted above in the facts of the case. Therefore, the learned advocate urges that the allegation in the show cause notice which has been upheld in the order-in-original that both the products are manufactured with the aid of power is,, totally erroneous on facts. On this aspect, the learned JDR draws attention to the finding of the adjudicating authority in the impugned order which states as follows :- To my question, it was admitted that the power was used by the manufacturer in the present case also in operating the stirrer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the product which was being manufactured without the aid of power i.e. HVS brand, does not fall within the Tariff description of Item 15C. It would, however, fall under Tariff Item 68 but would be fully exempted from duty under Notification 179/77 which exempts all goods falling under Tariff Item 68 from payment of duty if manufactured without the aid of power. Duty liability, if any, should be modified taking into account the clearances of L.N. brand of gum manufactured by the appellant firm in the relevant period. We are not sure whether the data of clearances of the pasting gum (L.N. brand) given by the appellants for the period 1980-81 to 1984-85 is correct and is within the exemption limit. For this purpose, alone i.e. for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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