9911796707
TMI Blog2003 (6) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... amphor/10/1971, dtd. 14-6-71 in which it had been clarified that this conversion of camphor powder to tablets does not amount to process of manufacture. This clarification was issued by the Collectorate of Central Excise, Bombay - I vide letter C.No.V/Ch.29 (3)/86, dated 9-4-86 to the Bombay Camphor tablets Mfrs. Association, Bombay clarifying that the camphor tablets made from duty paid camphor would not constitute manufacture. He also noted that the respondents were holding a bonafide belief that the goods were not dutiable and there was no intentional evasion on their part to evade payment of duty. He has noted the Apex Court judgments as rendered in the case of (i) Cosmic Dye Chemicals v. CCE, Bombay, 1995 (75) E.L.T. 721 (S.C.); (ii) Tamilnadu Housing Board v. CCE, Madras, 1994 (74) E.L.T. 9 (S.C.) = 1994 (55) ECR 7 SC; (iii) Padmini Products v. CCE, 1989 (43) E.L.T. 195 (S.C.); and (iv) CCE v. Camphor Drugs & Liniments, 1989 (40) E.L.T. 276 (S.C.) to hold that demands would be time-barred as there was no conscious or deliberate withholding of information and also intentional evasion of duty. On this ground, he has held that there is no case for invoking the provision to Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was satisfied that Revenue did not have case and hence rejected the appeals reserving detailed order to follow. The reasons for rejecting the appeals are given herein below : 6.1 The respondents were having units wherein they converted camphor powder into tablets. The facts of the case disclosed that due to humidity and temperature, the camphor powder so purchased turns into masses of irregular shapes. The processes undertaken in the units are as follows : The solid camphor masses are ground in the grinding machine to obtain camphor powder. Coconut oil is added to this powder and this mixture is then fed into tableting machines. These tableting machines are fixed with dies of various sizes. The camphor powder gets pressed in these dies of the tableting machine and camphor tablets of different sizes and shapes with dimensions ranging from 8 mm to 200 mm (width/dia) emerge. These are then wrapped with paper wrapper bearing the brand name "Gopal" in the wrapping machine and then different lots of 10,15, 25, 50 and 100 tablets are packed in unit containers of cardboard boxes, plastic boxes and polythene bags and cleared in the market. 6.2 The department initiated proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the physical form. In this connection the learned Consultant had cited the decision of the Hon'ble Supreme Court in the case of M/s. Vee Kayan v. Commissioner of Central Excise, Chandigarh, reported in 1996 (83) E.L.T. 262 (SC) and contended that mere change of physical form is not sufficient to constitute manufacture and also relied on the decision of the Hon'ble Tribunal in the case of Reckitt and Coleman v. Collector of Central Excise, Bangalore, reported in 1996 (82) E.L.T. 407 (T) wherein it was held that conversion of enzyme powder into tablets would not amount to manufacture. The learned Consultant also drew my attention to the changes brought in the Chapter Notes of Chapter 29 in the Budget 1997, wherein the scope of manufacture had been extended to labelling, relabelling of containers and repacking from bulk packs to retail packs or adoption of any other treatment to render the product marketable to the consumers and concluded that the effect of the Budget changes cannot be given retrospectively. 17. Section 2(f) of the Central Excise Act defines "manufacture" to include any process, (i) incidental or ancillary to the completion of a manufactured product; and (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial. Test of marketability was satisfied at the point of import itself. It is also clear that while compacting could have aided marketability, it was not essential to marketability. It could have been sold as much as convenient packs and all that a consumer was required to do was to take every time a pinch of powder and dissolve it in water". 18. In the case of Brooke Bond India v. CCE, Hyderabad, reported in 1994 (73) E.L.T. 151 (Tribunal) it was held by the CEGAT that process of pressing coffee powder into tablets by sprinkling a small amount of water does not amount to manufacture. While deciding the case, Hon'ble CEGAT observed that "the process undertaken by the appellants of converting the powder into tablets cannot be considered as a process of manufacture as defined in the Central Excise Act. We are not convinced that coffee tablets are different from coffee powder for the purpose of classification and exemption. To arrive at the conclusion, new item is different from old item, not only there must be change in name but it should have different character and use. No evidence has been produced to show that coffee tablets are different from coffee powder either in ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hor. No new product emerges as such under the above circumstances, I hold that a camphor tablet made from camphor powder, is not a new and distinct product. 20. I also find considerable merit in the argument of the consultant that it was only in the Budget 1997 that a new Chapter Note had been introduced in Chapter 29 to expand the scope of manufacture to include, "labelling or relabelling of container and repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the customer", and that the change could not be given effect retrospectively. The new Chapter Note cannot be given retrospective effect as it involves a substantiate change which can be given effect only prospectively. 21. The other submission made was that demand for the extended period cannot be invoked in view of the clarifications issued by the Collector of Central Excise, Bombay - I vide letter V/29/30/86, dated 10-4-1986 to the Bombay Camphor Tablet Mfrs. Assn., clarifying that camphor tablets made from duty paid camphor powder would not constitute manufacture. From the copy of the letter submitted it is evident that they had relied on an earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we notice that Commissioner has also given detailed finding as to how the assessees were holding a bona fide belief. No grounds have been made out by the Revenue challenging this finding except to say that non-filing of declaration amounts to suppression. The ld. Commissioner has given categorical finding that there was no suppression or intention to evade payment of duty and in this regard has relied on the Apex Court judgments which are applicable to the facts of this case to hold that larger period is not invocable. 6.5 Furthermore, we notice that from the latest Apex Court judgment rendered in CCE Chandigarh-I v. Markfed Vanaspati & Allied Industries, 2003 (153) E.L.T. 491 (S.C.) that burden to prove that there is manufacture and that what is manufactured brings into existence a new goods is on the Revenue. It has been held that merely because an item falls in a Tariff Entry that by itself does not mean that manufacture has taken place. This judgment also applies to the facts of the case. 6.6 We also notice that Tribunal in the case of S.D. Fine Chem Pvt. Ltd., 1991 (56) E.L.T. 393 (T), which has since been affirmed by the Apex Court, has held that process of purif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax the product sewing thread thereby there is no change of character of wax and it does not bring into existence a new product by a process of manufacture. 6.12 In the case of Exide Industries Ltd. v. CCE, Calcutta II, 2003 (154) E.L.T. 110 (T-Kol.) the Tribunal held that adding antimony metal and other additives to pure lead and obtaining a lead alloy does not amount to manufacture as no new commodity emerges as a result of the said process. 6.13 In the case of Punjab Power Packs Ltd. v. CCE, Chandigarh, 1998 (104) E.L.T. 50 (T) the Bench held that mixing of Potassium Hydroxide (solid KoH) with water or with Lithium Hydroxide (solid LiOH) and water does not bring into existence any new commercial commodity with different name and use. 6.14 Likewise in the case of Laljee Godhoo & Co. v. CCE, Mumbai, 2001 (132) E.L.T. 287 (T-Mum.) the Tribunal has held that blending of gum Arabic and wheat flour in sigma mixers and then pouring of filtered water mixed asafoetida resulting in lump or powder does not bring a chemical change in asafoetida and no new goods comes into existence hence does not amount to a process of manufacture. 6.15 In the case of Reckitt & Colema ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
