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TMI Blog2004 (1) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... , confirmed demand of Rs. 55,82,203/- confirmed in order dated 24-4-1996 for the period 3-5-1995 to 31-8-1995, Rs. 56,72,110/- confirmed in order dated 24-4-96 for the period 1-9-1995 to 31-12-1995, Rs. 56,76,695/- for the period January, 96 to May, 1996 and Rs. 45,56,839/- for the months of June, 96 to July, 96 confirmed in order dated 18-3-1997, (Total duty demands equal Rs. 2,14,87,847/-) against which the assessees have preferred three appeals bearing Nos. E/156/98, E/157/97 and E/158/98. Appeal No. E/495/2001 has been filed by the Revenue against the order of the Commissioner (Appeals), who has accepted the assessee s contention that the process above mentioned does not amount to manufacture in the light of the ratio of the Tribunal s decision in CCE v. Markfed Agro Chemicals [1993 (68) E.L.T. 848], rejecting the appeal of the Revenue against the approval of classification list No. 14, dated 6-3-95 of the assessee, by the Assistant Commissioner, Panvel. 3. We have heard both sides. We find that the issue came up for consideration by the Tribunal in the case of CCE v. Markfed Agro Chemicals cited supra, wherein the tribunal held as under :- It is seen that the processing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 15-4-1996 in Special Civil application Nos. 8580/95, 8730/95 and 9034 to 9036/95, [1996 (88) E.L.T. 35 (Guj.)] quashed the Circular and set it aside, holding that Section 37B of the Central Excise Act, does not authorise the Board to issue directions contrary to the decision of the Tribunal. The said circular was also struck down by the Delhi High Court in C.W.P. Nos. 3903/95, 3836/95, 3939/95 and 1008/96 in the case of Kissan Chemicals [1996 (88) E.L.T. 648 (Del.)]. 5. The Tribunal s decision in the case of Markfed Agro Chemicals, reported in 1993 (68) E.L.T. 848 (Tri.), therefore, holds the field and its required to be followed, particularly when the processes carried out by Markfed Agro Chemicals and the appellants before us are the same, and have not been distinguished. 6. Ld. DR seeks to distinguish the earlier order by drawing our attention to the finding of the Assistant Commissioner that the process carried out by the appellants herein also modified the surface active properties of the pesticides, but this finding in not based upon any material on record, such as test reports, etc. of the products in question and further such point viz., that the surface act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Markfed decision has been followed by the Tribunal in the following cases :- (i) Kilpest India Ltd. v. CCE - 1999 (110) E.L.T. 866. (ii) CCE, Guntur v. Winfield Chemical India - 2002 (140) E.L.T. 477. (iii) CCE, Coimbatore v. Kayes Agro Industries - 2001 (132) E.L.T. 701. However, in all these cases, the Department has gone in appeal to the Apex Court against the Tribunal decisions as seen from : - (i) 2000 (121) E.L.T. A73 (S.C.) (ii) 2002 (142) E.L.T. A170 (S.C.). (iii) 2002 (143) E.L.T. A264 (S.C.) These appeals have been admitted by the Apex Court on 13-10-1999, 14-1-2002 and 6-5-2002 respectively, but the outcome of the same in respect of cases at (i) and (ii) above is not known, whereas in the case at (iii) above, the civil appeal was dismissed after condoning the delay. 10. In view of the fact that two civil appeals have been admitted by the Apex Court and decisions in these cases are awaited and one civil appeal has been dismissed by a non-speaking order, the question arises as to whether there is any scope for considering the correctness of the Tribunal s decision in Markfed (supra). It is seen that a similar qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved at by the Tribunal in the case of Markfed (supra) for the following reasons :- (1) Markfed has relied on the ratio of Sandoz India Ltd. v. UOI and Others - 1980 (6) E.L.T. 696. In the case of Sandoz, firstly Foron liquid was obtained by conversion from the solid stage and secondly on the basis of material that was available in the case, the Court came to a conclusion that it was not possible to hold the process amounting to manufacture. In my view, the process considered in Sandoz was not similar to the one involved in manufacture of formulation grade pesticide as it is not a case of conversion from solid state to liquid state and therefore, the ratio of Sandoz is not applicable to the case at hand. (2) Markfed (supra) also referred to the ratio of the Apex Court decision in the case of Dy. Commissioner Sales Tax v. P.I.O Food Packers - 1980 (6) E.L.T. 343 (S.C.). In the said case, the Apex Court has held that though nature and extent of processing may vary from one case to another, yet it is only when the change, or a series of changes take the commodity to the point where commercially it is recognized as a new and distinct article that manufacture can be sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would have to be necessarily sold to a consumer who would use it only for conversion to formulation grade pesticides. It is therefore very clear that the properties of technical grade pesticides vastly differ from formulation grade pesticides. The conversion process too cannot be simple as that made to look by the assessee in their submission. If it was so, the assessee would have/could have cleared/sold the technical grade pesticides having concentration 70% or more with necessary instructions along with the product for conversion to formulation grade at the user end. This however, is not the case. The person who can do the conversion has to be an expert in the subject. The use of the agents such as dust carriers, solvents, emulsifiers, wetting and dispersing agent, stickers, deodorants or masking agents to effect the conversion can not be a layman s job. The assessee s contention that there is only change in physical form of the product is not correct. The changed from due to dilution by the above agents, results in a product (formulation grade) which is used in a manner different from the use of the technical grade product which in fact has no direct use and there is change in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 1998 (97) E.L.T. 5 (S.C.) : Whether the process is that of Manufacture is based on two-fold test - First, whether by the said process a different commercial commodity comes into existence or whether the identity of the original commodity ceases to exist - Secondly, whether the commodity which has already been in existence will serve no purpose or will be of no commercial use but for the said process (iii) South Bihar Sugar Mills Ltd. v. UOI - 1978 (2) E.L.T. J 336 (S.C.) Process is not equitable to manufacture and a new and different article must emerge having a distinctive name, character or use. (iv) Moti Laminates Pvt. Ltd. v. C.C.E., Ahmedabad - 1995 (76) E.L.T. 241 (S.C.) : Manufacture or Production means bringing out a new commodity which must be useable, moveable, saleable and marketable. The obvious rationale for levying excise duty linking it with production or manufacture is that the goods so produced must be a distinct commodity known as such in common parlance or to the commercial community for purposes of buying and selling. (v) Union Carbide India Ltd. v. U.O.I Others - 1986 (24) E.L.T. 169 (S.C.) : Meaning of Goods manufactured or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exist in the case of laminated packaging, the Apex Court had held in Para 6 of the said decision as under : - 6.... The further contention urged on behalf of the appellant that the goods belong to the same entry is also not relevant because even if the goods belong to the same entry, the goods are different identifiable goods, known as such in the market. If that is so, the manufacture occurs and if manufacture takes place, it is dutiable. Manufacture is bringing into being goods as known in the excise laws, that is to say, known in the market having distinct, separate and identifiable function. On this score, in our opinion, there is sufficient evidence. If that is the position, then the appellant was liable to pay duty, we are therefore, clearly of the opinion that the order of the CEGAT impugned in this appeal does not contain any error. The appeal, therefore, fails and is accordingly dismissed. (c) The test of whether a different commodity known as such in the market have emerged on dilution of chemicals and whether the results in manufacture under the Excise Laws has been agitating the minds for a long time. The King s Bench in the case of McNicol v. Pinch (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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