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TMI Blog2017 (7) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... of appellant. - E/51191-51192/2014 & E/104-105/2016 - A/61323-61326/2017-EX[DB] - Dated:- 5-7-2017 - Mr. Ashok Jindal, Member (Judicial) And Mr. Devender Singh, Member (Technical) Sh. B.L. Narasimhan, Advocate for the Appellant Sh. G.M. Sharma, AR for the Respondent ORDER Per: Ashok Jindal The appellants are in appeal. 2. The facts of the case are that the main appellant is 100% EOU and engaged in production of brown rice basmati, polished basmati rice and by-products such as broken rice, rice bran and rice husk. The appellants are exporter of basmati rice. To get basmati rice, the appellants procured paddy (rice in husk) from the mandis and processes the paddy in their plant to get the basmati rice. During the process of paddy, some bi-product like broken rice and rice bran emerges which were cleared by the appellants in Domestic Tariff Area (DTA). As the appellant is 100% EOU and cleared basmati rice, broken rice and bran made into DTA without payment of duty, therefore, two show cause notices were issued to demand excise duty on the said clearance of basmati rice, broken rice and brown rice cleared into DTA. The show cause notices were adjudicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existence of a new distinct object or article or thing with different chemical composition or integral structure. 28. On going through the above definition of the manufacture, the test laid down by the apex court in the case of Delhi Cloth and General Mills Co.Ltd. (supra) support the definition that a new and different article must emerge having a distinct name, character and use. Therefore, the definition of manufacture as section 2(f) of the Central Excise Act,1944 is pari material to definition of manufacture in Income Tax Act as per section 2 (29BA) of the Income Tax Act,1961. 29. Therefore, the decision in the case of M/s.Cynamid India Ltd. is applicable to the facts of this case wherein the Apex Court has observed as under: 5. The High Court has answered the question in favour of the assessee and against the Revenue. Having referred to the definition of agricultural product in Black's Law Dictionary, the High Court has held that the operation of de-husking paddy is not an industrial or manufacturing operation as commonly understood; it is essentially an agricultural operation and such changes as are brought about in the product are an outcome of agric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) that potpourris are classifiable under Chapter 6 of the Customs Tariff Act, 1975. Equivalent heading in the Central Excise Tariff is Chapter 6 which is blank. Hence they are non-excisable. 34. Further, we find that in the case of Valpus Biotech Ltd. an Praj Agro Vision Ltd., this Tribunal has observed as under: 3.1 As per Section 2(d) of the Act, excisable goods means goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 as being subject to a duty of excise and includes salt . The period involved in these appeals is April, 1998 to September, 1998 and January, 1999 to June, 1999 July, 1999 to September, 1999. During this period, the Central Excise Tariff did not specify cut flowers as excisable goods nor any rate of duty was prescribed for cut flowers . Even in the amended tariff effective from 2008 where the excise tariff, has been aligned with the customs tariff cut flowers fall under Chapter 6 and there is no rate of duty mentioned against cut flowers and the column regarding rate of duty is left blank. This implies that even after amendment to the Central Excise Tariff in 2008 cut flowers remains a non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nents, etc. without payment of customs duty and also to obtain similar goods from domestic market without payment of central excise duty. These units have also been provided a facility to sell a specified quantity of their product in Domestic Tariff Area in India. In respect of excisable goods manufactured by them, Section 3(1) of the Central Excise Act provides that the duty of excise shall be an amount equal to the aggregate of the duties of customs on like goods produced or manufactured outside India, if imported into India. There is substance in the submissions of the learned Advocates for the appellants that the nature of the duty levied on the goods manufactured by 100% E.O.Us. is central excise duty whereas the measure of collection of duty is customs. The measure of collection of duty does not change the nature of duty. In support of their contention the learned Advocate has relied upon the decision in the case of D.G. Gouse Co. Pvt. Ltd. v. State of Kerala supra , wherein it was held that a tax has two elements: subject of a tax and the measure of a tax and decided cases establish a clear distinction between the subject matter of a tax and the standard by which the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty provided in proviso to Section 3(1) of the Central Excise Act. 39. In view of above discussion, we find that the ratio of the decision cited herein above is that if in the tariff, the rate of duty is left blank, in that case, the goods are not excisable goods. Admittedly in the case in hand, the rate of duty in the tariff is left blank, therefore, we hold that the rice is not excisable goods. This view also takes support from the various RTI applications filed by the appellant wherein it has been replied by the department that no unit is manufacturing rice is paying duty on the rice being 100% EOU, we hold that the rice is not excisable goods. 40. In view of the above discussion, the issue No.2 is also answered in favour of the appellant. Which has been affirmed by the Hon ble Apex Court, therefore, we hold that the conversion of paddy into rice/broken rice/rice bran does not amount to manufacture in terms of Section 2 (f) of Central Excise Act, 1944 and the rice/rice bran/broken rice are not excisable goods in terms of Section 2(d) of the Act. Therefore, the impugned orders deserve no merits. Accordingly, the same are set aside. 8. In result, the appeals are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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