9911796707
TMI Blog2008 (10) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... ermediate product called 'sugar syrup' emerging in the course of manufacture of the 'SLICE'-branded product is marketable and, if so, whether the demand of duty raised on the appellants for the period May 1995 to April 1997 is time-barred. After examining the records, we find that, in the relevant show-cause notice dated 15-5-2000, the Department alleged (a) that the sugar syrup which emerged in the course of manufacture of 'SLICE'-branded final product of the appellants during the period of dispute was stable with adequate shelf-life and was marketable and hence dutiable under SH 1702.30 of the First Schedule to the Central Excise Tariff Act; (b) that the material facts concerning dutiability of the product was deliberately suppressed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard changed its view and held that sugar syrup produced in the intermediate stage in the manufacture of aerated water/ayurvedic medicines was an excisable item liable to duty under SH 1702.30. The learned counsel has argued that the circular dated 7-11-1994 is not applicable to the product in question as the Board was considering sugar syrup containing a preservative. It is pointed out that the product in question in the instant case had arisen from the activity of adding sugar to water followed by heating upto 85°C and that any preservative was not added. The 3rd circular dated 3-7-1996 agreed with the opinion given by the Chief Chemist, Central Revenues Control Laboratory, New Delhi. The Chief Chemist had opined thus :- "The issue ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etability' as a relevant criterion. Therefore, if the sugar syrup is marketable as such, without any reference to percentage of sugar concentration, then the same is excisable when taken for captive consumption or removed as such". The assessee through their counsel has heavily relied on the above circular of the Board. It is submitted that the marketability of sugar syrup was required to be established without reference to sugar concentration. If the sugar syrup is marketable as such, then it is excisable upon captive consumption or home consumption. It is submitted by the learned counsel that, in this case, no evidence whatsoever was brought on record to establish the marketability of the sugar syrup in question. On the other hand, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was found to be stable product with shelf life and hence to be marketable and further it was classified under SH 1702.30 of the CETA Schedule. The learned SDR has also referred to a letter dated 8-9-1995 of the appellants addressed to the Department, wherein the process of manufacture of sugar syrup and further use of this product were explained as follows :- "The process involved in preparing the "syrup" is mixing the duty paid concentrates received from Pepsi Foods Limited with purified sugar in the form of liquid. In our factory we buy the duty paid sugar and we purify the sugar by mixing the same with water in a double jacketed vessel (steam heat) with the help of activated carbon which is a purifying agent. This purified sugar in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8-9-1995 is enough evidence of the excisability of the sugar syrup. 3. After considering the submissions, we find that the sugar syrup in question was plain syrup prepared by dissolving the requisite quantity of sugar in water and heating to 85°C in a tank. Its concentration was above 65% as noted in the impugned order. The Chief Chemist, the expert to comment on the chemical stability of products like sugar syrup, categorically stated that sugar syrup of concentration above 65% was resistant to fermentation and deterioration and hence stable with shelf-life. In this appeal, the Chief Chemist's opinion has not been assailed. The Board accepted that opinion and held sugar syrup to be excisable. Of course, marketability of the produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one of the Annexures to the show-cause notice, the statement of Shri K. Muthusamy was reproduced, wherein he had stated that sugar syrup was prepared in a separate tank by adding sugar and water and by heating to 85°C. He had also stated the further process on syrup. The processes were stated in detail in the appellant's letter dated 8-9-1995 also. From these documents, it should have occurred to the Department that sugar syrup was an intermediate product which emerged in the process of manufacture of aerated water and the mango pulp-based product and that the marketability of the commodity had to be looked into. It was in the show-cause notice dated 15-5-2000 that the Department suddenly came up with a case against the assessee in rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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