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TMI Blog1993 (1) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case are : that the appellants are manufacturers of Soya Milk and Soya Beverages under the brand name of Golden Glow and Big Sipp and Vigo Elaichi under sub-heading 2202.90 of the Central Excise Tariff Act, 1985. The investigating team visited their factory premises on 14-9-1990 and found them manufacturing their product without obtaining Central Excise licence and claiming the same under Notification No. 20/89-C.E., dated 1-3-1989 at nil rate of duty without obtaining C.E. licence. It appeared to the Divisional Preventive Officers on the basis of `Daily Standardisation Report and the manufacturing process of the product that the products Golden Glow, Big Sipp and Vigo Elaichi were Soya Beverages containing flavours and added with the fruit pulp and, therefore, were not exempted under Notification No. 20/89-C.E., dated 1-3-1989 as amended and thus such goods were liable for confiscation. Hence 3893 cartons of Soya Beverages containing flavours and fruit pulp valued @ Rs. 2,84,189/- approx. were seized under mahazar and Panchnama dated 14-9-1990. The statement of Shri M.M. Chitale, General Manager (Technical) under Section 14 of the Central Excises and Salt Act, 1944 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... personal hearing passed the impugned order. He has held that there is no evidence on record to show that the noticee have ever submitted any declaration of the manufacturing process of their product which is generally submitted at the time of filing AL-4 application. He has observed that had they done so, then the department would have been able to detect that the product being manufactured by M/s. Amrit Protein Foods Ltd., are in fact Soya Beverages and not Soya Milk". By not doing so the noticee has definitely contravened the provisions of Rule 174A read with Section 6 of the Central Excises and Salt Act, 1944. There is dispute on the fact that the product manufactured by the Unit is Soya Milk . Noticee in the reply the Show Cause Notice has stated that sugar, permitted chemical and colours are added milk soya milk base and mixed homogeneously. The mixed is ultra high temperature treated and natural or artificial flavour as the case may be is added and then filled in pouches. Evidently with this detailed process of manufacture which the soya milk undergoes, the soya milk looses its identity as Soya Milk and become the Soya Milk product or Soya Beverages, as has been named in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flavours of mango, banana. It is the appellants contention that despite adding all these ingredients the Soya Milk remains Soya Milk and the resultant product is not a preparation of Soya Milk. The department was fully aware that the product was manufactured with or without flavours.The wrappers also clearly indicated the ingredients used. The Department by their letter dated 1-5-1989 had informed them with reference to the Classification List No. 1/89 with effect from 11-4-1989 as Central Excise Licence is not obtained by them there is no need to file Classification List and that they were required to file an annual declaration to the Asstt. Collector, Central Excise, Div-III, Ghaziabad under Rule 174A of Central Excise Rules, 1944 as their product is fully exempted under Notification No. 20/89, dated 1-3-1989. They sent another detailed letter dated 16-5-1989 by which they contended that they were also not required to file declaration as suggested by them. The learned advocate pointed out from these materials that the department were duty bound to have made enquiries on the Classification List 1/89 filed by them. When the Superintendent by his letter 1-5-1989 informed them that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lain but Soya Milk beverages and both are distinct and different commodity. The Golden Glow , which the appellant are terming as plain Soya Milk is also not correct. It is a beverage as Sweetners and other ingredients are added to give added Shelf life and hence it is not entitled for exemption. 12. The learned SDR further argued that the demand has been raised for previous six months also and that the same is valid. However, the Collector has refrained from confirming the part demand amounting to Rs. 16,15,831.09 which is for period 27-3-1990 to 13-9-1990 keeping open the option to issue fresh Show Cause Notice for the past clearances also. As the goods had been seized the imposition of redemption and penalty is justified. The learned Collector by bifurcating the Show Cause Notice has not committed any irregularity and in this context the decision rendered in the case of Collector of Customs v. Jugilal Kamlapat U.L. as reported in 1987 (30) E.L.T. 734 para 11 is relied. Even if duty is not confirmed in Show Cause Notice, the position pertaining to seizure, redemption fine and penalty is maintainable. For imposing penalty, there is no need to proof suppression and the clause o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and marketed by appellants in this case and as to whether the duty is demandable for extended period and as to whether there is justification for imposition of redemption fine on seized goods and penalty under the relevant rules. 16. The appellants were manufacturing four varieties of Soya Milk products viz. (1) Unflavoured Soya Milk sold under the brand name Golden Glow . (2) Flavoured Soya Milk sold under the brand name Vigo . (3) Flavoured Soya Milk sold under the brand name Big Sipp `Rose and Big Sipp Pinakool (4) Flavoured Soya Milk to which fruit pulp (for natural flavour) upto a maximum of 10% of the total content was added, sold under the brand name Big Sipp Mango and Big Sipp Banana . 17. The appellants contention is that despite their adding to the Soya Milk base cum sugar, permitted additives colours, Milk, natural or artificial flavours and addition of fruit pulp or synthetic flavours could not make the product into a different one but continue to be Soya Milk. It is their contention that the product classifiable as Soya Milk under Heading 2202.90 as Non-alcoholic Beverages . On this point the learned SDR brought to our notice our own order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of information or misdeclaration or fraud so as to enable the department to proceed for recovery for extended period. Here, he also argued that the appellants have not attempted to evade Central Excise duty and that they were holding a bona fide belief that their product is exempted for duty. Their belief has been arisen from the technical details and information they were having and also on the basis of definition of Soya Milk as is available in Glossory of Soya Milk terms. The Learned Counsel has also argued that in Trade and Commercial Parlance, Soya Milk could include also the non-alcoholic beverage manufactured and marketed in the manner the appellants have done. The appellants are very strongly relying on the Classification List No. 1 of 3/89 and letters addressed by them to the Department about the commencement of their production and on this basis have vehemently contended that the department cannot plead ignorance of the manufacturing process and hence there is no suppression, as the department had been made fully aware of the manufacturing activity. The department has taken a view that the appellants have not disclosed about the manufacturing process or of use of additive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty bound to have made further inquiries and satisfy itself about the exemption. In case if the Party had not given the details or had suppressed any material information on being asked by the department then a reasonable conclusion can be drawn that the appellant had withheld material facts and hence it had been done with mala fide intention to evade duty. The Department has not shown any material by which such a conclusion can be drawn. The Department alone is to blame itself for not making sufficient inquiries before returning the Classification List and informing them that their product is exempted under Notification No. 20/89. Therefore, taking into consideration the several citations cited by the learned Counsel, we are unable to agree with the Department s contention that the party has attempted to suppress and evade duty and the larger period is available to the department to recover the duty. The learned SDR has placed reliance on the ruling of the Supreme Court rendered in the case of Jayshree Industries Co. Pvt. Ltd. s case and has argued that the rulings would apply and that the department s charge of suppression should be upheld. In this particular case there was a clea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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