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TMI Blog2013 (11) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... es) can be distinguished by physical and chemical methods and with instrumental analytical techniques – Decided Against Revenue. - Appeal No.E/233/2006 - Final Order No. A/10879/2013-WZB/AHD - Dated:- 18-7-2013 - Mr. M.V. Ravindran and Mr. H.K. Thakur, JJ. For the Appellant: Shri Anand Nainawati, Adv. For the Respondent: Shri S.K. Mall, Addl.Commissioner (A.R.) JUDGEMENT Per: M.V. Ravindran This appeal is directed against Order-in-Original No.49-50/Commissioner(Adjudication)/2005, dt.03.10.2005. 2. The relevant facts that arise for consideration are that the respondent herein is manufacturing various kinds starch and classified the product under Chapter 11 of Central Excise Tariff Act, 1985 and cleared the same at Nil rate of duty. On an intelligence gather by the officers of DGCEI, the premises of the respondents were searched and various documents were recovered and statements of various personnel of assessee were recorded. On culmination of such an investigation, show cause notice was issued to the respondent herewith directing to show cause as to why their product should not be classified under Chapter 35 as modified starch. The adjudicating authority, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by both sides, we find that that the issue involved in this case is regarding classification of the product manufactured by the respondent. The respondent had classified the product under Chapter 11, while it is the case of the Revenue that the said product merits the classification under Chapter 35. 6. In our considered view, the decision of the co-ordinate bench of the Tribunal in the case of Riddhi Siddhi Gluco Biols Ltd (supra) was considering the very same issue (wherein one of was a Member). After considering in detail the various submissions made, the Bench reached to a conclusion that the product i.e. Maize Starch would merit classification under Chapter 11. To arrive at such a view, the Bench has recorded the following findings:- 7.2?The rival entries canvassed by the parties for classifying the impugned goods are Chapter Sub-Heading 11.03.00 and Chapter Sub-Heading 35.05.20 of the Central Excise Tariff. (The sub-headings applicable for starch underwent change in numbering later on also on re-organization of tariff w.e.f. 28-2-2005. However, the relevant entries germane for deciding the classification did not undergo any changes). These entries read as follows : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellow dextrins) that often have a pale yellow to tan color; or (4) oxidizing starch in an aqueous suspension which results in the introduction of carboxyl and carboxyl groups and partial depolymerization of the starch. Each of these processes produces starch derivatives with the desired altered properties, for example, viscosity, paste clarity, or gel-forming ability, for different uses. Cross-linked starch derivatives are produced by treating an aqueous suspension of starch granule with cross-linking reagents. The resulting modified starches have improved cooking characteristics (higher gelatinization temperatures); increased stability to acid, heat or shear, with resulting control of viscosity during processing; and improved textural characteristics of starch pastes. Starch ethers or esters (substituted starches) are formed by treating an aqueous suspension of starch with appropriate reagents in the presence of an alkaline catalyst. These stabilized starch derivatives have freeze-thaw stability and a reduced tendency to undergo syneresis (formation of water on the surface of a gel or paste due to retrogradation). The pertinent HSN explanatory notes on the entry CSH 3505.20 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch) used in the manufacture of explosives. 7.4 As per the explanatory notes, modified starches may be distinguished from unmodified starches of Chapter 11 on the basis of changes in their properties, for example, solution and gel clarity, tendency to cool or to crystallize, water binding capacity, freeze-thaw stability, gelatinization temperature or peak viscosity. We note that different physical and chemical properties distinguish modified starches of Chapter Heading 3505 from native starches of Chapter 11. We find that unless these parameters are ascertained on test, it cannot be conclusively found as to whether the impugned goods are correctly classifiable under Chapter 11 of the Tariff or Chapter Heading 3505 of the Tariff. 7.5?We find that though the assessee had relied on various technical authorities to canvass its case, the Adjudicating Authority has not referred to or discussed any of these in his order. The test report of South India Textile Research Association submitted by the appellant extracted below gives the parameters of MSP sold for use in textile industry by the assessee. Sl. No. Characteristics Actual test results Standar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standards and had conducted the chemical test not as per the relevant standard and equipment. As the Commissioner had not considered or discussed various parameters of modified starches in the impugned order, the Tribunal remanded the matter for fresh adjudication after fresh chemical examination of the samples. 7.6 We find that native starch of Chapter Heading 11 and modified starch of Chapter Heading 3505 are different in its physical and chemical properties as reflected in the explanatory notes to HSN, the encyclopedia relied on and the expert opinions. As the Commissioner had relied on the opinion of the departmental expert, it was necessary that he also critically examined the expert opinions furnished by the assessee to support its case. It was open to the Commissioner to examine the experts before he arrived at a finding against the assessee and relying only on a similar opinion of the Chemical Examiner who also had not studied the actual process of manufacture followed by the assessee or determined the properties of the impugned goods by testing samples. In our considered opinion, the impugned order is not sustainable, for the reason that the important conclusion on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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