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TMI Blog2009 (6) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... ankers which do not contain any marking on them. The water supplied to the retail outlets is used to produce aerated beverages dispensed through vending machines. Revenue proceeded against the appellants on the ground that treated water so cleared was excisable. Duty demand of Rs.54,65,757/- for the period from 26-12-97 to 31-3-06 was demanded under Proviso to Section 11A of the Central Excise Act, 1944 interest was demanded. Equivalent Penalty under Section 11AC was imposed. The personal penalties of Rs.5,00,000/- each on Shri S. Sridhar Manager (Finance) and Shri K. Nageshwara Rao Manager (indirect taxes) was imposed under Rule 209A of the CE Rules. The respondents were aggrieved over the impugned order and approached the Commissioner (Appeals). The Commissioner (Appeals) held that the treated water is not excisable and therefore allowed the appeals of the respondents with consequential relief. Revenue is highly aggrieved over the impugned order and approached the Commissioner (Appeals). The grounds of appeal in brief are as follows:- (i) The water is subjected to different treatments like adding of bleach solution to kill micro organisms, analysis of water sample, treatments of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is misplaced by the assessee. (iv) As per sub-section (iii) of Section 2(f) manufacturing includes any process which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labeling or re-labeling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer. (v) The goods manufactured are classifiable under chapter 22.01 and this is specified in the Third schedule. Accordingly, even labeling or re-labeling of the specified goods rendering them marketable to the consumers amounts to manufacture. Even according to this logic also, the goods in question are manufactured goods and liable to duty. In the treatment of water various chemical compounds are used viz., lime which is calcium carbonate. Sodium bi carobonate, ferro sulphate and bleaching powder which are nothing but minerals. As this is a chemical process, the resultant product invariably contains the remnants of these minerals also. Further this is not a simple process of making the water just potable but it is an exhaustive process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with or without any indication of the identity of that person. In view of the chapter notes, it can be concluded that the treated water obtained by involving the said process and cleared in canisters bearing the brand name of "cola" falls under Chapter heading 2201.19/220190.90 of the Central Excise Tariff Act and charged to central excise duty. (ix) The adjudicating authority in clear terms stated that the name "Cola" cannot be the house mark of the assessee but it is trade mark only. The judgment of the Hon'ble Supreme Court in the case of M/s. Astra Pharmaceuticals - 1995 (75) E.L.T. 214 (S.C.) is not relevant to the instant issue as mentioning of House mark and product mark on the pharmaceutical products is mandatory as per the Drug control Act and there is no such concept in the case of manufacturers of other goods. (x) The appellant initially cleared the water in canisters and later they shifted over to the clearance in jerry cans. The same canisters were also used for clearance of their packaged drinking water 'Kinley". Only after the department came to know about the clearance of treated water and proposed duty thereon the assessee discontinued the above practice. They so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carrying post mix/or in stainless steel drums/or in jerry cans. The canisters are specifically meant for carrying post mix. They have a specific design and make so as to ensure that the same remains air tight while carrying post mix. The canister are so designed that it goes as an equipment that fits into the dispensing machines whereby post mix syrup stuffs out in regulated manner and is mixed with water and CO2 is injected in required proportion. In other words the canisters are not merely carriage medium but also essential equipment designed to fit into the dispensing machine. All canisters bear the respondents house mark "coco-cola" on them for the purpose of easy identification thereof. The stainless steel tanks on the other hand are hired by the respondents from vendors. As for the jerry cans, the respondents receive concentrate flavour of beverages in the same from the vendors. These jerry cans are washed and used by the respondents for carrying water to their retail outlets. 5. The treatment of borewell water/municipal water, does not amount to bringing into existence a new and commercially different commodity. Further the treatment of water has not rendered the same mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf, i.e. prior to carrying out the above processes was marketable and therefore it cannot be said that respondents gave the attribute of marketability to water which was not earlier present. The Hon'ble Tribunal in the case of Lakme Lever Ltd. [2001 (127) E.L.T. 790] interpreted the word "render" while considering the scope of Note 4 to Chapter 33 holding that "render" means "cause to be or become; make of a certain nature, quality, condition". It was held that from the above meaning and indeed by common usage, the word "render" means only the treatment which makes the product marketable to the consumer. i.e. to say the processes to fall within the scope of Note it must be one (1) which confers upon a product the attributes of marketability which it did not possess earlier. 6. The process of purification/filtration merely improved the quality and this did not result in different characteristics and usage. Reliance was placed on the decision of the Apex Court in the case of Crane Betel Nut Powder Works v. Commr. [2007 (210) E.L.T. 171] and the decision of the Hon'ble Tribunal in Hindustan Petroleum Corpn Ltd. v. Commr. [2009 (234) E.L.T. 648] 7. The treated water is not supplied/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever treated water is being supplied by the respondents without charging the same, i.e., there is no sale involved at all and therefore the basis ingredient for branding a product is missing. In view of the aforesaid until 28-2-2005, treated water was classifiable under chapter sub-heading 2201.11 of the CETA which covers within its ambit waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavored, not bearing a brand name, the duty payable therein was 'NIL". With effect from 1-3-2005, treated water was classifiable under Chapter sub-heading 2201 9090 under the residual entry "Others" and attracted 16% excise duty. However vide Notification No. 8/2005-C.E., dated 24-2-2005, complete exemption was granted to the goods falling under the Tariff heading which did not bear a brand name. The said exemption was withdrawn with effect from 1-3-06. vide Notification No 29/2006-C.E., dated 4-5-2006, complete exemption was granted to waters not cleared in sealed containers and falling under Chapter heading No 22012 9090. It was further submitted that the value of post mix includes an element of cost of treated wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted water is not sold by the brand name of "cococola". In certain cases, the treated waters are supplied in stainless steel tanks. Surely it cannot be said that the treated water carried in stainless steel tanks are marketable when they are sent for the purpose of making cococola in the vending machine. It is seen that the respondents had stated that the value of post mix includes the element of cost of treated water and the post mix had discharged duty liability. There is always a distinction between packaged water and treated water. Packaged water has minerals added to it. The treated water cleared by the respondents are not marketable as such. We also find force in the contention that the name "cococola" is only a house mark of the company. It cannot be said that the treated water is marketed under the brand name of cococola in the light of the Hon'ble Supreme Court's decision in the case of Crane Betel Nut Powder Works v. CCE cited (supra). The processes undertaken for treatment of water did not result in the emergence of new product. In these circumstances, we do not find any infirmity in the impugned order of the Commissioner (Appeals) setting aside the order of the Original ..... X X X X Extracts X X X X X X X X Extracts X X X X
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