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TMI Blog1992 (12) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... ief facts, leading to these appeals, are as follows: 2. M/s. S.M. Confectionery Works, W/5, MIDC Amraoti (Respondents) is a S.S.I. Unit and engaged in the manufacture of sugar confectionery, not containing Cocoa, such as (a) hard boiled sugar confectionery (b) tablet and coated sweets falling under sub-heading No. 1704.90. In addition, they are also manufacturing Chironjidana (In some part of India it is also called as Ilchidana ); Ghadi-sarkar; Rewadi and Gathi/Batasha. The party vide their classification lists No. 31/87-88 effective from 14-1-1988, 51/87-88 effective from 1-3-1988 and 10/89 effective from 1-4-1989, classified sugar confectionery not containing Cocoa (a) hard boiled sugar confectionery; (b) tablet, sweets; and (c) coated sweets, under sub-heading No. 1704.90 below item 6 and also declared Chironjidana , Ghadi-sakkar, Gathi/Batasha under sub-heading No. 2107.10 and Rewadi under sub-heading No. 2107.99 at Nil rate of duty which were shown as other goods below Item 7 of the said classification lists. The above classification lists were approved as declared by the party. However, later on, the Assistant Collector, Central Excise Dn. Amraoti re-examined the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e form of globules, with uneven surface made of sugar (Sucrose), sucrose content more than 90%, and generally used as prasadam7. The Collector (Appeals), Indore vide his order dated 12-2-1992 (supra), accordingly, reduced the amount of confirmed demand of Rs. 19,191.00 to the above extent and set aside the penalty imposed by the Assistant Collector, Central Excise, Amraoti. 5. Arguing the case of the Assessee Appellant, Sh. G.L. Deshpande, Learned Counsel, submitted that the Appellate Collector failed to appreciate that the disputed products were commonly used as prasadam for offering to God, in the temples. In such case, the authorities are bound to apply the common parlance test for deciding the classification under the Central Excise Tariff Act. The appellant had produced the photographs showing sale of the disputed items in the shops in the vicinity of temple. The affidavits of the shopkeepers were also filed before the Assistant Collector, wherein they had deposed that the disputed items were invariably used as prasadam. The orders passed by both the authorities below ignoring the common parlance test, are not sustainable in law. 6. The Learned Counsel, further, urged tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-heading 1704.90 or as Prasadam under sub-heading 2107.10. In respect of chironjidana, the Chemical Examiner opined as follows: Sample is in the form of Globules with uneven surface made of sugar Sucrose). Sucrose contents more than 90%. Please see note below: Note: Such preparations are generally used as prasadam. However, actual use may be ascertained." 10. In respect of Ghadi-shakkar, the opinion was expressed as follows: Sample is in the form of crystalline lumps made of sugar. Sugar (Sucrose) content is more than 90%. Attention is invited to Notification 15/89 C.E., dated 1-3-1989. 11. The assessee has also enclosed, with their appeal, an examination report of the products dated 25-10-1989 from the Chief Chemist Incharge, Public Health Laboratory, Amravati. It relates to Ghadi-shakkar, Batasha and Chironjidana. It shows that Sucrose contents in Ghadi-shakkar is 99.56%; in Batasha it is 93.18% and in Chironjidana it is 94.06%. The question is whether the products by their nature, as above, which are predominantly made of sugar, will fall outside Chapter 17 and within Chapter 21 CETA. Sub-heading 1704 covering sugar confectionery (including white chocolate) no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter, the Collector (Appeals) acceptance of chironjidana as prasad classifiable under 21.07 is also not sustainable because the Chemical Examiner was not categorical in his opinion and had required that the actual practice be ascertained and it is found that these products are commercially manufactured in the factory and the assessee sells them to the dealer and the goods are generally available in shops and are not confined only to temples. Therefore, the Collector s order is not sustainable in regard to classification on chironjidana. All the products, on the other hand, are classifiable under sub-heading 1704.90 as sugar confectionery for the reasons aforesaid. However, the perusal of the classification list, submitted by the assessee, also indicates that they had claimed exemptions under Notification 33/86 for the products. There is no ground given as to why the exemption under Notification was not considered by the Assistant Collector. In this context, it is also worth noting that the Chemical Examiner also had indicated that Notification 15/89, which is similar to Notification 33/86 should also be considered. The Notification exempts among other things, candy sugar un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epared by mixing sugar with glucose, colour, essence, citric acid, milk powder, coconut powder, starch, ghee etc. The appellant has stated that there are no other ingredients except sugar in all their products namely - Chironjidana, Ghadi Shakkar (Mishri) Rewadi or Gathi. However, the process of manufacture of these products as given by the department and the appellant are as follows:- (a) Chironjidana - For the manufacture of Chironjidana either 100% sugar is taken or 85% to 95% Sugar is mixed with 5% to 15% Glucose and then dissolved in water and the solution is boiled. This solution for a certain period to 250 0C and the heated solution obtained is poured into rotating copper pot. Due to the rotation the mixture solidified into small rough round forms known as chironji. I find that the product is chemically tested vide test No. 1/SN/90 dated 3-4-1990 wherein vide report No. EX/NR/-2/90 dated 21-9-1990 the Chemical Examiner has stated that the sample is in the form of Globules content more than 90%. The chemical examiner has also stated in the note, below that such preparations are generally used as prasadam and that actual use may be ascertained. In view of the clear report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice the definition of confectionery, confectionery and biscuits, confectionery, Indian, Confectionery Sugar (foreign) appearing in pages 176 and 177 of words and phrases of Central Excise and Customs by Shri S.B. Sarkar. The same is noted herein below: Confectionery: Confectioner s work of art; sweetmeats in general (Chambers 20th) Confectionery and biscuit: Confectionery is essentially a sweetmeat. Sugar is a main ingredient. Sometimes chocolates, fruits, nuts, eggs, milk products, flavours and colours are added. In some other preparations maida and sugar are the main ingredients to which other items are added e.g. in cakes and pastries. Biscuits, on the other hand, are a kind of dry bread in which sugar is an almost insignificant ingredient. In common parlance also, biscuit is not included in the item confectionery . Annapurna Biscuits (Mfg.) Co. v. S/OUP - 1978 (2) E.L.T. (J 657) (All.). (The decision was confirmed by the Supreme Court) (See Biscuit ). Confectionery Indian : The principal raw materials are sugar, chhana (casein) and khoa (evaporated milk), pulse meal, wheat flour, rice flour, suji (semolina), ghee (hydrogenated and other veg. oil) and colouring material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oft dough. The dough is rolled into a sheet on a flat plate with a rolling pin. The sheet is cut into different shapes and sizes, fried in ghee until brown and crisp, and transferred to a warm thick syrup, later taken out and dried. (See Gulabjamun). Pera is made from concentrated sweetened milk. The mixture of milk and sugar is boiled under stirring until it thickens and becomes elastic. It is cooked and shaped into small flattened cakes or peras. Barfis are made from khoa powder mixed with sugar under gentle heating. Candied or crystallised fruit (Indian) is prepared by impregnating fruit with syrup - these are glaced by a coating of heavy syrup which dries to a firm structure. A large variety of fruits are candied. Petha (Benincasa hispida) is particularly popular. The pieces are rendered firm by immersion in lime water and pricked, to make them translucent and facilitate the penetration of sugar respectively. They are cooked for 10 minutes in boiling water containing alum to whiten them and to render them soft and spongy. They are then transferred to sugar syrup and cooked intermittently. The cooked slices are dried after adding a few drops of keora (Pandamus tectorius) ess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d gelatine as binding agents. Lozenges should have good snap or brittleness, for which thorough and intimate mixing of the dough is essential. Jolly crystal is made by mixing refined sugar with gelatine solution, flavour and colour. No cooking is required. Jujubes are made by mixing cooked glucose and sugar solution with gelatine solution, flavouring and colouring materials. The product, after removal from the moulds, is slightly moistened with water and coated with refined white sugar -Ind. Part II, P. 172,1951." As can be seen from the reading of tine above terms appearing in the Words and Phrases of Central Excise and Customs, by Shri S.B. Sarkar the products involved in this case would come within the said terms and they can be classified as sugar confectionery and the appellants contention that they are not to be considered as sugar confectionery has to be rejected. 16. The appellants have contended that the items are to be declared as Prasad and Prasadam carrying nil rate of duty under Tariff Item 2107.10. As we have held that the items are squarely falling under sub-heading 1704.90 and they are to be treated as sugar confectionery, their plea for classifying the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by them, the processes of neutralisation by alkali and bleaching by activated earth and/or carbon. According to the learned Counsel manufacture is complete as soon as by the application of one or more processes, the raw material undergoes some change. To say this is to equate processing to manufacture and for this we can find no warrant in law. The word manufacture used as a verb is generally understood to mean as bringing into existence a new substance and does not mean merely to produce some change in a substance however minor in consequence the change may be. This distinction is well brought about in a passage thus quoted in Permanent Edition of Words and Phrases, Vol. 26, from an American Judgment. The passage runs, thus :- Manufacture implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use. 15. It is helpful to consider also in this connection the ordinary meaning of the word goods . For, by the very words of the Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of power . The definition of manufacture as in Section 2(f) puts it beyond any possibility of controversy that if power is used for any of the numerous processes that are required to turn the raw material into a finished article known to the market the clause will be applicable; and an argument that power is not used in the whole process of manufacture using the word in its ordinary sense, will not be available. It is only with this limited purpose that the legislature, in our opinion, inserted this definition of the word manufacture in the definition section and not with a view to make the mere processing of goods as liable to excise duty. 20. Mr. Pathak wanted to derive some assistance for his argument from the words all sorts as used in the clause. According to him, the words all sorts will be superfluous unless interpreted to mean whether bringing into existence a new substance or not . The reasoning is clearly fallacious. The words all sorts have been used to make it clear that vegetable non-essential oils whether raw or refined and from whatever raw material produced will be liable to excise duty. Refined oil is one sort, raw oil is another sort. But as the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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