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TMI Blog2004 (12) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. E/st/633/2004 in E/1051/2004 for stay of the O-I-O No. 06/2004, dated 12-7-2004 of the Commissioner of Central Excise, Bangalore. 2.Shri Habibullah Badsha, Sr. Advocate a/w Shri C. Manishankhar and Shri Jai Kumar, Advocates appeared on behalf of the appellants and Smt. Shobha L. Chary, learned JCDR appeared on behalf of the Department. 3.This Tribunal passed an Interim Order Nos. 838 839/2004, dated 10-8-2004 wherein the appellants were directed to pre-deposit a sum of Rs. 25,00,00,000/- within a period of 4 months. However, they have come before this Tribunal for modification of the Stay Order on the following grounds: (i) The Tribunal has not considered a very important question raised that the sale proceeds of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of Rs. 25 crores, their business would come to a stand still. (iv) Our attention was also invited to Board's Circular No. 247/81/96-CX., dated 3-10-1996 wherein the Department has issued a Circular to the effect that mixing duty paid paints to obtain a paint of different shade shall not amount to manufacture. It was argued that this Circular is squarely applicable to their case where only different flavours are mixed. 4.The Departmental representative urged that at this stage, the appellants cannot introduce additional grounds of excisability of the product supplied to the CBUs. She said that the question of excisability was decided by the then Commissioner in his Order in the year 1985 and the appellants did not protest. Hen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants pay royalty to them for using their brand name. It was urged that the Royalty is given to them mainly for use of their brand name by C.B.Us. The learned Counsel took us through the various clauses of the Agreement and emphasized that the royalty payment is not linked to the sale of the food flavours. In the Pepsi Food case, the concentrates as well as the finished products were excisable whereas in the present case, the food flavours as well as the IMFL are not subject to Central Excise Duty. 6.On a very careful consideration of the entire issue, we find that the mixing of food flavours does not amount to manufacture and, therefore, prima facie, the contention of the appellant that what they supplied to C.B.Us. is not excisable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion, therefore, is answered in the affirmative, i.e. the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee. We remand the proceedings to the Tribunal for consideration of the new grounds raised by the assessee on the merits". 8.The Tribunal, in the case of CCE v. Madura Coats Ltd. - 2000 (124) E.L.T. 274 allowed the additional grounds regarding the question whether impugned process amounts to manufacture or not to be raised at the appellate stage. This decision was upheld by the Apex Court as reported in 2003 (155) E.L.T. A147 (S.C.). Before duty is demanded on a product, it should be proved that the product is ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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