9911796707
TMI Blog2012 (7) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... le gum in the classification list filed before Central Excise Authorities. 2. During the relevant time the excise procedure required the assessees to make a declaration of the products manufactured by them indicating the classification and rate of duty applicable and the M/s Hindustan Gum and Chemicals, Ahmedabad had declared the classification under 11.01 with nil rate of duty and the same was approved by the department. Later the department conducted some investigation and it appeared to them that the product is classifiable under Tariff heading 13.01 and excise duty is payable on such product. Accordingly Show Cause Notices were issued for changing the classification and demanding duty. Such demands were issued alleging suppression of facts and mis-declaration and consequently invoking the extended period of time of 5 years for issuing such demand. 3. The Show cause Notice was dropped in adjudication proceedings in the case of Hindustan Gum and Chemicals, Ahmedabad. On appeal filed by the department the Commissioner (Appeal) ordered classification under heading 13.01. When the assessees came in appeal before the Tribunal, the Tribunal ordered vide its order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STAT. The CESTAT is the last finding authority on the question of fact. Therefore, the matter requires to be remanded to the CESTAT for a fresh determination of the issue which it had raised for its consideration. Accordingly, the Appeal is disposed of. The order passed by the CESTAT dated 30.10.2003 is set aside. The matter is remanded back to the CESTAT for consideration of the issue that was raised by it after affording a reasonable opportunity of hearing to both the parties. The parties are at liberty to produce such other relevant materials they so choose to produce before the CESTAT. The parties shall appear before the CESTAT on 21st of November, 2011. The CESTAT thereafter will decide the matter as earlier as possible at any rate within four months from today. All the contentions of both the parties are left open. 7. Pursuant to the order the parties were heard on 12-01-2002. 8. The assessees obtain Tamarind Kernel Powder and do chemical processes on it to make it suitable for use in textile printing as a thickener. There are minor variations in the manner in which the processes involved are recorded in the appeal filed by Hindustan Gum Chemicals and the appeal fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was basically whether the sales tax had to be paid for a second time when groundnut oil was hydrogenated. The Apex Court decided that there is no need to pay the tax again. (b) CCE Vs. Tikatar Industries.-2006 (202) ELT 215 SC. In this case the issue was whether conversion of straight grade bitumen into blown grade bitumen amounts to manufacture of a new product. This issue also related to a period when Modvat scheme was still not applicable to petroleum products. The Tribunal, relying on a Circular issued by the Board ruled that no duty will be chargeable if blown grade bitumen is made from duty paid straight grade bitumen. This decision of the Tribunal was upheld by the Honorable Apex Court. (c) Shyam Oil Cake Ltd Vs. CCE (2005) 1 SCC 264. In this case the question was whether there is a fresh duty liability when an assessee purchased duty paid vegetable oil and subjected such oil to certain processes for the purpose of refining it. The Hon ble Court had held that no new product had come into existence by the process of refining. 11. Relying on the above decisions the Counsel argues that the processing done by the Appellants also does not result in any n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the meaning of manufacture in Central Excise Act. The decisions was only to the effect that considering the legal provisions for collection of sales tax prevailing then there was no case for collecting sales tax from hydrogenated groundnut oil made from duty paid oil. The case of Tikatar Industries also was a case of conversion of duty paid bitumen to another grade of bitumen and the question being decide was levy of excise duty for a second time and the decision itself was based on a circular from the Board which sought to avoid levy of duty on activities involving small value additions. In the case of Shyam Oil cakes the nature of commodity had not changed substantially. Thus we find that the decisions quoted are not appropriate to the facts and context under consideration now. Further the context itself evolves with newer systems for levy of tax and there cannot be a rigid approach to the issue when the taxation system itself changes. In the facts of the case and the law applicable we are of the view that the processes amount to manufacture. 14. In the second matter of classification the arguments of the Counsel for appellants were as follows. 14.1 Heading 13.01 of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owder of the products of Chapter 8 of HSN (viz., edible fruits and nuts peels of fruits, etc.). HSN Explanatory Notes which amplify the scope of the aforesaid sub-heading 1106.30 specify that powders, meal or flours of nuts or fruits of almonds, dates, bananas, coconuts and tamarind are covered by the sub-heading. The notes also state that the heading does not cover tamarind powder in packings for retail sale for prophylactic or therapeutic purposes (Heading 30.04). It is seen that while the broad Chapter Heading for Chapter 11 of HSN as well as Chapter 11 of the Central Excise Tariff is common viz., products of the milling industry, malt, starches, insulin, wheat gluten there is no specific entry under Chapter 11 of the Central Excise Tariff covering flour, meal and powder of products of Chapter 8 corresponding to sub-heading No. 1106.30 of HSN. Ministry therefore, observe that tamarind seed powder could be regarded as a product of the milling industry in terms of the broad heading under Chapter 11 of the Central Excise Tariff. In the absence of a specific entry corresponding to sub-heading 1106.30 of the HSN, the product under consideration would appear to be correctly classifiab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eference to HSN notes. As per HSN notes. Tamarind kernel powder is mentioned in the notes under heading 11.06 and heading 13.02 of HSN as re-produced below. Note (C) under heading 11.06 (C) Flour, meal and powder of the products of Chapter 8 The principal fruits or nuts of chapter 8 which are made into flours, meals or powders are chestnuts, almonds, dates, bananas, coconuts and tamarinds. The heading also includes flour meal and powder of peel of fruits. However the heading does not cover tamarind powder in packings for retail sale for prophylactic or therapeutic purposes (heading 30.04) Note C (5) under heading 13.02 Cotyledon flour of tamarind seeds (Tamarindus indica). These flours are included in this heading even if modified by heat or chemical treatment. 21. It is clear that the note under heading 13.02 covers the impugned goods more appropriately than that under heading 11.06. Further the Rules of Interpretation of the Tariff mandates that if a product appears to be classifiable under more than one heading the heading coming last in the sequence should be adopted. The Appellants argue that the headings in Central Excise Tariff were not aligned to those in HSN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the officers of the department were expected to visit factories and conduct necessary verification for approval of classification list and even other-wise. In such a context and against the background facts and clarification issued by the Board as stated above we see no reason to allege suppression or mis-declaration on the part of the assessee. So demand can be sustained for the normal period of limitation prescribed in section 11A at the time of issue of notice. In the case of Bhiwani unit extended period of 5 years is not invoked. In the case of Saahil organics the assessments were being made on provisional basis. Here also the question of applicability of extended period does not arise. 25. There are also prayers that the duty liability has to be reworked considering the price realized as cum-duty price. There is also a prayer for allowing Modvat credit for duty paid on inputs. In the facts and circumstances of the case we see merit in these prayers and we allow the same. The Revised duty liability is to be worked out by the adjudicating authority. 26. To sum up it is held that the impugned goods are manufactured goods and its classification was under sub-Heading 1301.10 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
