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TMI Blog2004 (5) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... btained, which is called inter-mixture of vitamins, is stored in plastic drums/aluminium bottles; that in order to identify the particular inter-mixture of vitamins which has to be used in the particular grade of finished product, a sticker is affixed on the drum giving the details regarding the content of the drum and are thereafter used in the manufacture of infant foods; that they do not sell any part of these inter-mixtures of vitamins to any body and they have never cleared the same outside the factory as these inter-mixture of vitamins are not saleable in the market as such it is of no use to any other infant food manufacturer whatsoever; that the adjudicating authority, under the impugned Order, has held that the process of mixing the various vitamins and the making of inter-mixture of vitamins amounts to manufacture within the meaning of Note 11 to Chapter 29 of the Schedule to the Central Excise Tariff Act on the ground that the process of mixing the vitamins would come under the category of "adopting of any other treatment to render the product marketable to the consumer". 3.The learned Counsel, further, submitted that as the Note 11 to Chapter 29 was introduced only wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he product was already marketable, any amount of treatment to enhance its marketability, or impart more value addition to it would not amount to manufacture. Reliance has also been placed on the following decisions - (i) CCE, Indore v. Pure Pharma Ltd. - 2002 (143) E.L.T. 386 (T) (ii) Ranbaxy Laboratories Ltd. v. CCE, Chandigarh, Final Order No. A/374/2003-NB(C), dated 9-7-2003 [2003 (160) E.L.T. 899 (T)]. 4.He also mentioned that all activities, covered by Note 11 to Chapter 29, are intended to make the product marketable to the retail consumer; that thus the expression 'consumer' in the last portion of Note 11 should also be construed in the same manner and not a captive consumer like the appellants; that for this reason also Note 11 is not attracted in the present case. This submission is supported by the decision in Pure Pharma Ltd., supra. He, further, submitted that merely because the Heading 29.36 separately covers vitamins and inter-mixture of Vitamins it cannot ipso facto be concluded that the process of mixing the vitamins in specified proportion would amount to manufacture. He relied upon the decision in the case of CCE v. Markfed Vanaspati and Alli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal Representative, submitted that the process undertaken by the appellants involves mixing of required vitamins in a pre-determined ratio with the help of electro mechanical device; that after mixture, Vitamins lose their identity and a new product known by a different name 'inter-mixture of vitamins' comes into existence; that Shri V.K. Pabbi, an Executive of the appellant-company has deposed in his statement dated 1-8-2001 that vitamin pre-mix and inter-mixture of vitamins are the same and are used for the same purpose that is the manufacture of baby foods; that the case records show that vitamins pre-mix are available in the market and have also been imported by the appellants themselves; that thus the inter-mixture of vitamins is capable of being bought and sold in the market. In support of his contention, learned Senior Departmental Representative produced a photocopy of a Bill of Entry No. 178859, dated 15-12-2000 for import of Vitamin Premix by M/s. Nestle India Ltd. He also produced copies of invoices of M/s. Remidex Pharma Pvt. Ltd. for sale of vitamin pre-mix. He relied upon the decision in the case of Union of India v. Sonic Electrochem (P) Ltd., 2002 (145) E.L.T. 274 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants tantamounts to "manufacture" in terms of Section 2(f) of the Central Excise Act. Regarding invocability of extended period of limitation, the learned Senior Departmental Representative contended that the very fact the Appellants had themselves imported pre-mix of vitamins, is sufficient for them to know that Central Excise duty is payable on the inter-mixture of vitamins; that they had suppressed the fact of manufacturing inter-mixture of vitamins as they had not filed any declaration and as such extended period of limitation is invocable. He relied upon the decision in Gujarat Insecticides Ltd. v. CCE, Vadodara, 2002 (147) E.L.T. 86 (T) and Gillooram Gaurishanker, supra. 7.We have considered the submissions of both the sides. The learned Advocate for the Appellants has emphasised that the only case made out in the show cause notice was that they were affixing labels on the containers containing inter-mixture of vitamins and this process of labelling would amount to manufacture in terms of Note 11 to Chapter 29 and that the Commissioner has confirmed the duty relying upon the last portion of Note 11 that is 'adoption of any other treatment to render, the product mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Even if a product is by itself marketable and the assessee undertakes some treatment on the product which render it marketable in some other form, the said treatment would be covered by the phrase "any other treatment to render the product marketable to the consumer". In the instant matter, the appellants mix the various vitamins in a pre-determined ratio which render them marketable to the consumer as inter-mixture of vitamins. The vitamins, that is the starting material, were marketable, prior to the treatment as individual vitamins, whereas the treatment rendered by the appellants has made them marketable as inter-mixture of vitamins. In the case of Lakme Lever, supra, the appellants have merely packed 12 assorted colours of lipsticks in one carton instead of 12 lipsticks of one colour. In view of these facts, the Tribunal observed that the process should be one which confers upon a product the attributes of marketability which it did not possess earlier. The vitamins, in the original forum, do not have the attribute of marketability as inter-mixtures of vitamins which the treatment rendered by the appellants has attributed. Similarly in Lupin Laboratories case [2002 (139) E. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment. There is no material to show on the basis of which they entertained the bona fide belief that the vitamins inter-mixture is not excisable. The Circular in respect of Agarbathi mix was firstly issued in November, 1999 and secondly it was in respect of mixing of a few aromatic chemicals with a base oil in a container in liquid form normally carried out in a continuous manner in the course of manufacture of Agarbathi. The circular is of not general application and the process is quite different in both cases. We, however, agree with the learned Advocate that after May, 1999 when they furnished the information about mixing of vitamins to the Department, extended period cannot be invoked. Further as Note 11 to Chapter 29 was introduced only with effect from 1-3-97, no duty of excise can be demanded in terms of the said Note prior to 1-3-1997. We also agree with the learned Advocate that they will be eligible to avail the Modvat credit of the duty paid on inputs used in the making of inter-mixtures of vitamins subject to their production of duty paying documents, within two months of receipt of this Order, to the satisfaction of the jurisdictional adjudicating authority whom the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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