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TMI Blog2002 (6) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... equent declarations also contain the same details in regard to the products and the processes involved. However, the assessee s claim for exemption in respect of the products by claiming the Soya Nut as Soya textured protein with nil rate of duty and/or as namkeens, such Bhujiya, Chabena under Tariff Heading 2107.91/2108, had not even been considered. The assessee did not emphasis that the products are prasad or prasadam but edible preparations which were squarely in the nature of namkeens such as chabena and bhujiya. This contention had not also been considered and decided as the exemption has been denied only on the ground of the products not being prasad or prasadam . This mistake also needs to be rectified. (ii) The Assessee had contended that each one of the respective notifications which had been prevailing, had provided for nil rate of duty for the products by virtue of being either soya textured protein or namkeens such as bhujiya, chabena or sweet meats and snacks and this part of the Assessee s claim for nil rate of duty had not been considered and decided, in the same set of notifications, exemption by giving nil rate of duty is also provided for so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..... substantially undergoes change and the processed wheat acquired altogether a different character. Wheat when processed into puffed wheat still remains wheat and relying on the judgments of the jurisdictional High Court referred to in para 1(a) of the Misc. application filed on 25-6-2001, the plea that wheat when puffed cannot be regarded as having been manufactured so as to attract Central Excise duty liability. The bona fide nature of the Assesses s contention, with respect, had not been appreciated and the judgments had been sought to be distinguished by stating that those decisions did not go into the question of manufacture for excise duty purposes. With respect, it is pointed out that both the decisions of the Allahabad High Court and also the decision of the Supreme Court in CST v. D.S. Bist Ors. - 1979 UPTC 151 clearly lay down that a mere process would not by itself make the product different from what it was prior to that process and, therefore, the Assessee s bona fide plea of the wheat puffs not being liable to duty of excise on the one hand, and on that score there being no wilful suppression or mis-statement of facts by the Assessee, on the other, ought to hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29 at page 12 of the order and para 32 at page 13 of the order, it has been wrongly stated that the Assessee had admitted that the goods manufactured are excisable and that there is no dispute on this question. With respect, this finding is wrong and that is why additional ground was taken to plead that the goods are not excisable as there is no manufacture in the process involved of converting wheat into wheat puff and the additional ground was allowed to be taken. Therefore, it is wrong to state that the Assessee had admitted that the wheat puffs are excisable goods. It was specifically pleaded that wheat puffs not being excisable and not having been subjected to the process of any manufacture of new excisable goods, the question of duty liability even under Chapter 1904 of the Tariff did not arise. Even though the Assessee s plea was not accepted by the Tribunal or the Commissioner, it cannot be stated that the Assessee had admitted the goods as excisable and that there was no dispute on the question of excisability. Wrong finding given in this regard needs to be rectified. (xi) In para 32, the Tribunal had taken note of the decision of the Allahabad High Court in E-Septon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard being erroneous, the same would require to be rectified. (xiii) In para 37, the Respondent has been directed to recompute the duty liability and also re-determine the liability to penalty on the Assessee and others except Shri R.N. Goel who has passed away and against whom, the penalty has been held to abate. Directions have also been given in para 40 for the purpose. There is no discussion and/or finding whether any liability to penalty is attracted at all and, if so, for what reasons and by whom. Shri Deepak Garg, one of the Appellants, became a Director in the company only on 20th November, 1996 and the show cause notice was issued on 21-3-1997 pursuant to the visit of the Excise Officers on 22-1-1997 and the demand relates to the period from April, 1992 to January, 1997. Therefore, the levy of penalty on Shri Deepak Garg is totally unwarranted. Since the dispute is one of classification and entitlement to nil rate of duty arising merely from the change of opinion in the mind of the Revenue, the allegation of wilful misstatement or suppression against the assessee and/or levy of penalty on any of the appellants is totally unwarranted. In the last para No. 40(e), the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... School Boys Industries, Roorkee v. CST reported in 1987 UPTC-1145 and in the case of CTT v. National Cereal Products Ltd. reported in 1998 STC (111) 241 stating that these two decisions are applicable and binding on the authorities as the factory is within the jurisdiction of Allahabad High Court. The request for considering these judgments is allowed. The Misc. application is accordingly disposed of. 7. Misc. application No. E/Misc/523 is also for raising additional grounds. On perusal of this Misc. application, we note that there is nothing new in it but only a contention that there was discrimination between the appellant and other manufacturer of similar goods. The other manufacturer has been named as M/s. School Boys Industries, Roorkee and Shri Brij Bhushan Kesarganj, Meerut producing similar goods. This is a general point which will be considered while considering the merits of the case. The Misc. application is, therefore, partly allowed. 8. After disposing of the Misc. applications let us proceed with the facts of the case. The facts of the case in brief are that the appellants are engaged in the manufacture and clearance of goods described as wheat puffs and soya n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Rule 174A on 13-4-94 with the Asstt. Commissioner, Saharanpur; that similar declarations were filed for the year 1995-96 and 1996-97; that they had the bona fide belief that the declaration had been accepted by the Department inasmuch as no communication was received as an objection; that reopening of classification was not justified. In support of this contention, they cited a number of decisions. They contended that they had given the process of manufacture and therefore, suppression and mis-statement cannot be alleged. It was, therefore, contended by them that the demand was time barred. Ld. Commissioner confirmed the demand of Rs. 2,31,20,970/-. He imposed a penalty of Rs. 2,31,970/- as indicated in the copy served on the assessee and held that interest was chargeable. He also confiscated the goods seized and imposed different penalties on the company, its employees and Directors. 10. Arguing the case for the appellant Shri R. Santhanam, ld. Counsel submits that no process of manufacture was involved in making of the Puffed wheat and Soya nuts . He referred to the decision of the Hon ble Allahabad High Court in the case of M/s. School Boys Industries, Roorkee v. CST r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , soya are first roasted/puffed in puffing machine . The chabena/soya textured protein is then sweatened for prasad or salted, sold in unit containers or sold loose. 14. The goods have been described as Edible Food preparation (chabena) Prasad, Prasadam and classification has been claimed under Chapter heading 2107.91/2108.90 of the CETA, 85 claiming exemption under Notification No. 2/94-C.E., dt. 1-3-94 read with Notification No. 12/90-C.E., dt. 20-3-90. 15. We also note that Chapter heading 19.04 reads : 19.04 - Prepared foods obtained by the swelling or resting of cereals or cereal products (for example, corn flakes); cereals other than maize (corn), in grain form or in the form of flakes or other worked grains....... . 16. Further H.S.N. notes under Chapter heading 19.04 read : This heading covers a range of food preparations made from cereal grains (maize, wheat, rice, barley etc.) which had been made crisp by swelling and roasting. They are mainly used with or without milk as break fast foods....... . . 17. By no stretch of imagination Puffed wheat could be called a Prasad/Prasadam. No religious sentiments were attached with the goods in question. In the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Collector s order is not sustainable in regard to classification on chiranjidana. All the product, on the other hand, are classifiable under sub-heading 1704.90 as soya confectionary for the reasons aforesaid. However, the perusal of the classification, be 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 Asstt. Collector. In this context, it is also worth noting that the Chemical Examiner also had indicated that Notification which is similar to Notification 33/86 should also be considered. The notification exempts, among other things, candy sugar under certain conditions. In the interest of justice, it is directed that the eligibility of the products to these notifications should be considered and the duty liability re-determined if any based on the eligibility or otherwise to the notification. In the result, the appeals, by the assessee/appellant are rejected and the appeal by the Department is allowed in the above terms . 18. It is also not a Chabena. Wheat Puffs are standard branded products (Bonton) used as bre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the statute does not contain any definition the test commonly applied is how the product is identified by a class or section of the people dealing with it or using it. It is generally by its functional character that the product is identified. Soya bean puffs have been described in the profile as snacks, breakfast food which enhances longevity. In the profile itself it has not been described as infant food. The product is not prasad/prasadam. The product therefore, qualifies for classification under Chapter heading 21.07 or 21.08. 22. In so far as puffed soya nut is concerned, the argument of the appellant was that it is an edible preparation classifiable under Chapter heading 2109.91 as it was salted and bhujiya. The argument of Revenue was that it was neither bhujiya nor namkeen and bhujiya is also a namkeen. It was submitted that it will fall under Chapter sub-heading 2108.91. 23. In the case of Collector of Central Excise v. Roha Dye Chem Pvt. Ltd. - 1989 (41) E.L.T. 667 (Tribunal) the Tribunal had observed with reference to foods colours that broadly speaking edible preparations must find classification under one or the other of the headings in Chapter 21 in prefere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uirement of taking Registration Certificate and that it should be deemed to be a declaration for the purposes of classification and exemption from payment of duty. As per allegations in the show cause notices no declaration even for exemption from the Registration Certificate was filed for the years 1992-93, 1993-94, 1995-96 and 1996-97. Even in the declaration said to have been filed on 13-4-94 the goods had been declared to be the Prasad/Prasadam, Chabena and Soya textured protein. These expressions had been taken from the exemption notifications. Nowhere they described their goods correctly as Wheat Puffs and Puffed Soya Nuts. It has been alleged in the show cause notice that to equate Prasad with breakfast food projected to be superior than corn is a wilful mis-statement and suppression of facts . A declaration for the purposes of rights and obligations had to be a correct declaration. It is on the basis of a declaration that the legal consequences flow. If the declaration is incorrect and misleading then all the rights and obligations flowing from such an incorrect declaration will be vitiated. By filing an incorrect and misleading declaration, the declarant could not take a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Soya Nuts. What could be the belief for describing goods differently for duty purposes. No reasonable basis had been given for such a different description, which in the facts and circumstances of the case, is a mis-declaration amounting to suppression of facts, attracting extended period of limitation for raising the demand. 31. The Supreme Court s decision in the case of Padmini Products v. CCE - 1989 (43) E.L.T. 195 (S.C.) referred to their earlier decision in the case of Collector of Central Excise, Hyderabad v. Chemphar Drugs and Liniments, Hyderabad - 1989 (40) E.L.T. 276 (S.C.), and affirmed that something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability beyond the period of six months had to be established . In the present case the Wheat Puffs were mis-declared as Prasad/Prasadam/ Chabena and Soya Nuts were mis-declared as Soya Textured Protein. It was a positive act of mis-declaration. There was no scope for any doubt that the goods were not Prasad/Prasadam, etc. and no case had been made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different matter, if the appellants had altogether suppressed from the Department the fact of manufacture of soap without the aid of power or steam and its clearance without payment of duty in terms of the exemption notification . In the present case, the goods were misdeclared even in the declaration for exemption from Registration and the goods had been removed without any approval and the facts on record on which the correct assessments could be made had been suppressed. 34. We, therefore, hold that there is no infirmity in the view taken by the adjudicating authority in regard to limitation. 35. The Counsel for the appellant also submitted that the appellant was entitled to the benefit of SSI exemption, was not extended to the appellant. We note that this contention has force. We, therefore, direct the Commissioner concerned to examine this aspect and extend the benefit to the appellant if they are entitled to it. 36. Another point that was made during the arguments at the time of hearing the appeal was that duty was computed on the sale/contract price. It was argued that for purpose of computing duty the sale price should have been taken as cum-duty price in terms of Sri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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