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TMI Blog2015 (4) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be cooked in the same form as any other rice is to be cooked. Therefore, we do not agree with the CEGAT that there is a transformation into a new commodity, commercially known as distinct and separate commodity. Activity undertaken by the assessee does not amount to manufacture, this appeal is liable to succeed on this ground itself inasmuch in the absence of any manufacture there is no question of payment of any excise duty. We may, however, remark that even otherwise the classification of the product by the Revenue under sub-heading 21.08 may not be correct. In fact, the CEGAT has accepted that classification only on the ground that the product after mixing of raw rice with dehydrated vegetable and spice, has become a new product as it amounts to `manufacture' and on that basis it has held that it no longer remains product of milling industry. As we have held that it does not amount to `manufacture' as the essential characteristics of the product, still remains the same, namely, rice, a natural corollary would be that it continues to be the product of the milling industry and would be classifiable under sub-heading 11.01. Rate of duty on this product, in any case, is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d flour, meal or flakes of vegetables on which nil duty is payable. It was, thus, contended that in no case the assessee was under any obligation to pay the duty on the aforesaid process. The Additional Commissioner did not agree with the contention of the assessee holding it to be a manufacturing process, and opinion of the Additional Commissioner is accepted by the Commissioner (Appeals) as well as by CEGAT. Ms. Charanaya, the Learned counsel appearing for the appellant argued before us that the authorities committed serious error in holding the aforesaid process of the assessee as manufacturing process . Her arguments was that from the reading of the process described above, it would be manifest that it only involved mixing of raw rice, dehydrated vegetable with some spice and did not bring about any new product. It was submitted that the aforesaid mixture, which is sold in a packaged form, is raw food and still needs to be cooked to make it edible. She pointed out that on the packing/pouch of the product even the cooking instructions are mentioned in the following manner: All cooking appliances vary in performance, these are guidelines only. Empty contents into 375 ml ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal, affirming the finding of the quasi-judicial authorities below to the effect that a new product had come into existence as a result of the processes undertaken by the assessee. It was specifically held by the CEGAT that rice did not remain rice at all as a mixed product containing rice, vegetable and spices emerges after the specific process was undertaken by the assessee. He also referred to those observations of the CEGAT where it has remarked that there is a transformation of a new commodity commercially known as distinct and separate commodity having its own character, use and name. Be it the result of one process or several processes in fact ' manufacture' had taken place. He, thus, argued that when a new commodity had come into existence as held by CEGAT, this was the trigger point for the levy of excise duty under the Excise Act. He further submitted that in view of the aforesaid, viz. coming into existence a new product, that particular edible product had to be fallen under Chapter 11 of the Tariff as it is not a product of milling industry not classifiable under Chapter 11 of the Tariff. From the aforesaid arguments advanced by counsel on the either side, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the end product the `betel nut remains a betel nut . The said observation of the Tribunal depicts the status of the product prior to manufacture and thereafter. In those circumstances, the views expressed in the D.C.M. General Mills Ltd. (supra) and the passage from the American Judgment (supra) become meaningful. The observation that manufacture implies a change, but every change of not manufacture and yet every change of an article is the result of treatment, labour and manipulation is apposite to the situation at hand. The process involved in the manufacture of sweetened betel nut pieces does not result in the manufacture of a new product as the end product continues to retain its original character though in a modified form. What is to be highlighted is that even after the betel nut which had been cut to different sizes and had undergone the process, the Court did not treat it as 'manufacture' within the meaning of Sec.2(f) of the Act on the ground that the end product was still a betel nut and there was no change in the essential character to that article even when it was the result of treatment, labour and manipulation, inasmuch as even after employing the same it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out any chemical change in the asafoetida.The process, as we have seen, is nothing more than the addition to the asafoetida of wheat flour and gum arabic.It is stated that gum Arabic is added in order that the particles of the asafoetida and wheat flour adhere to each other. Neither the gum arabic nor the wheat flour reacts chemically with the asafoetida.The contention is that while the raw asafoetida itself is used in cases where its very strongly pungent flavour is required, for example, in the making of pickles and papad, it is compounded in order to render it more suitable for use in dayto- day cooking where a lighter flavour is desired. The essential character of the product therefore does not change. It is used in both its concentrated and blended form only as an addition to food preparation, flavouring agent or for the medicinal properties that it is reputed to possess. Again the test which was applied was that essential character of the product did not change and, therefore, it would not amount to manufacture. It was so held even when gum arebic as well as wheat flour were mixed in the process. A pertinent aspect which was noted was that mixing of these articles did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of another. Although it has undergone a degree of processing, it must be regarded as still retaining its original identity. 5. A large number of cases has been placed before us by the parties, and in each of them the same principle has been applied: Does the processing of the original commodity bring into existence a commercially different and distinct article ? Some of the cases where it was held by this Court that a different commercial article had come into existence include Anwarkhan Mehboob Co. v. The State of Bombay and Others (where raw tobacco was manufactured into bidi patti), A Hajee Abdul Shukoor and Co. v. The State of Madras (raw hides and skins constituted a different commodity from dressed hides and skins with different physical properties), The State of Madras v. Swasthik Tobacco Factory (raw tobacco manufactured into chewing tobacco) and Ganesh Trading Co. Karnal v. State of Haryana and Another, (paddy dehusked into rice). On the other side, cases where this Court has held that although the original com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormal sense of the word. Referring to Anheuser-Busch Brewing- Association v. United States the Court said: Manufacture implies a change but every change is not manufacture and yet every change in an article is the result of treatment, labour and manipulation. But something more is necessary ..There must be transformation; a new and different article must emerge having distinctive name, character on use. And further: At some point processing and manufacturing will merge. But where the commodity retains a continuing substantial identity through the processing stage we cannot say that it has been manufactured. The comment applies fully in the case before us. Although a degree of processing is involved in preparing pineapple slices from the original fruit, the commodity continues to possess its original identity, notwithstanding the removal of inedible portions, the slicing and thereafter canning it on adding sugar to preserve it. It is contended for the Revenue that pineapple slices have a higher price in the market than the original fruit and that implies that the slices constitute a different commercial commodity. The higher price, it seems to us, is occasioned only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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