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TMI Blog2000 (2) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... However, while the excisability of the product was upheld, the Order-in-Appeal changed the classification from Chapter 30 to 21. It also reduced the penalty from Rs. 5000/- to Rs. 2000/-, but held the product to be dutiable. 2. Heard Sri N. Venkatraman, learned advocate for the appellants, who submits as follows:- (a) The appellants received vacuum dried spirulina powder for conversion into saleable retail packs of the powder as well as into converting the same as tablets. As far as the packing of the item received in the same form as powder is concerned, the department has not raised any dispute or demand. Therefore, the dispute is limited to the question whether the conversion of spirulina powder received by them into tablets which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to manufacture, there being no change in the character of the product. Thirdly, the learned advocate submits that addition of preservatives also does not amount to manufacture as is held in the decision of the Tribunal in the case of Jayu Products (supra), wherein acid dyes were added to preserve parity and shade of ultra marine blue. As far as the addition of binders is concerned, the learned advocate submits that in a recent decision the Tribunal has considered this very issue with respect to the similar spirulina powder in the decision of Sanat Products Ltd. v. CCE as reported in 2000 (115) E.L.T. 163 (T), wherein it was held that mixing the binder to the dried and powdered spirulina to facilitate easy filling into capsules does not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond test prescribed is whether the commodity which was already in existence will serve no purpose or will be of no commercial use but for the said process? The learned advocate submits that since the spirulina is also sold and consumed in powder form therefore, it cannot be said that but for converting the same into tablet, it cannot be consumed by human beings. Tableting merely allows more convenience in form of sale and consumption by the buyer and this increased convenience cannot be said to satisfy this test. (e) In this connection, the learned advocate takes us through the affidavit of Sri V.S. Raghunathan, who is the Managing Director of the appellant company. He submits therein that the addition of diluents to increase the bulk, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it level, however, the most appropriate classification which could have been proposed by the Revenue, though not admitted by him, would be under sub-heading 21.06 as food preparations not elsewhere specified or included, as the department may treat this as food supplement. He submits that Note 16 to Heading 21.06 of the HSN on page 172 of the Second edition 1996 mentions that such preparations would be contained added vitamins and sometimes minute quantities of iron compounds. In this case, no addition of any kind of vitamin or iron in edible form or in any other form has been done. Therefore, this very Note of HSN goes in their favour and rules out the classification under Chapter 21 as a food supplement preparation. 3. Learned D.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduct be classified in the Tariff? On a careful consideration, we are of the view that this conversion does not amount to manufacture at all for the following reasons:- (i) The principle active ingredient, and for which alone it is purchased by a buyer in the market, remains the same, namely spirulina. This is the known source of food which provides high concentration of protein in the powder form as 64.31% and in the tablet form as 53.76%. Even though there is a slight decrease in the percentage of protein available in the tablet form, the decrease extent due to deterioration in the processing is so insignificant that the availability of high concentration of protein is still feasible in the tablet form. Therefore, there is no material c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case, apart from adding the binders certain other chemicals are added to dilute and lubricate etc. which are technically necessary for making it into tablets. For the reasons already discussed above, the ratio of this decision would also apply to the facts of this case. (v) We have also examined the role played by the Dicalcium Phosphate, when it is added as a diluent in this process. After taking into consideration, the minimum dosage of 1 gm. thereof under the Indian Pharmacopeia, we agree with the submissions of learned advocate that the increase in calcium content in view of this addition is so insignificant in terms of the minimum standards prescribed by the said Pharmacopeia, that it does not in any way significantly increased t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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