TMI Blog2003 (12) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-12-1993 to Collector of Central Excise, Coimbatore seeking clarification from the department regarding excisability and dutiability of liquid sodium silicate manufactured out of duty paid sodium silicate and the Superintendent of Central Excise, Pollachi-I Range vide his letter O.C. No. 15/94, dated 4-1-1994 had clarified that the process of dissolving the Solid Form of Sodium Silicate in water would not amount to manufacture and such units would not come under the purview of the Central Excise Licensing Control. Therefore, they surrendered the Registration Certificate dated 17-10-1994 and had filed a declaration on 21-10-1994, thereafter did not file any declaration after the introduction of Note 10 to Chapter 28 of Central Excise Tariff which was introduced w.e.f. 1-3-1997 to the effect that :- "In relation to products of this Chapter, labelling or relabelling of containers and repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture". 2.It is alleged that solid sodium silicate is duty paid item which was received by M/s. ASCPL from M/s. ACI for conversion to liquid sodium ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacture of soap. It undergoes lot of processes to become liquid sodium silicate, as admitted by them in the "process of manufacture" furnished to the department. Further, with regard to their argument as to "marketability", I would like to mention here that because of the fact the liquid sodium silicate could not be stored for a long time, only solid sodium silicate is marketed as such. In order to get liquid sodium silicate, it is not a simple process as to adding water to the solid sodium silicate, but it undergoes various processes as explained by them. Therefore, I hold that the process involved in bringing out the liquid sodium silicate amounts to "manufacture" and the same is rightly coming under the purview of Section Note 10 of Chapter 28 of CET". It was pointed out that the Addl. Commissioner had clearly recorded that the item could not be stored for long and only solid sodium silicate was marketable as such and this itself was sufficient to hold that these were not goods to be used by the consumer under Note 10 of Chapter 28 and should have dropped the proceedings. However, the Commissioner in the impugned order did not appreciate these submissions and has held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectly (especially domestically), not in manufacturing etc. (page 366) 6.With regard to the definition of said term, the reliance was placed on the following citations :- (1) Mangla Brothers v. CC, Bombay - 1984 (15) E.L.T. 151 (T) (2) CCE, Indore v. Pure Pharma Ltd. - 2002 (143) E.L.T. 386 (T) = 2002 (51) RLT 156 (T) (3) Ammonia Supply Co. v. CCE, New Delhi - 2001 (131) E.L.T. 626 (T) = 2001 (45) RLT 271 (T) (4) RamKishore Chemicals Co. Pvt. Ltd. v. CCE - 2002 (145) E.L.T. 106 (T) He submitted that in the following citations the term "Consumer" and "Consumer goods" were discussed :- (1) Lakme Lever Ltd. v. CCE, Mumbai-III - 2001 (127) E.L.T. 790 (T) (2) Mod Apparel Exports v. CC, Calcutta - 1996 (86) E.L.T. 388 (T) (3) Jayanti Food Processing Pvt. Ltd. v. CCE - 2002 (141) E.L.T. 162 (T) = 2002 (49) RLT 133. He also submitted that principles of Interpretation of Statutes viz, 'Ejusdemgeneris' would also apply to the all the terms in Note 10 to Chapter 28 and is required to be understood as to whether the goods were marketable to the consumer and also whether they were repacked from bulk to retail packs. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges v. CCE - 2000 (120) E.L.T. 81 (T) (4) Majestic Auto Ltd. v. CCE, Meerut - 2001 (130) E.L.T. 551 (T). 10.He also submitted that maximum penalty cannot be imposed under Section 11AC which would depend upon the totality of facts and circumstances of the case. In this regard, he relied on the Apex Court judgment rendered in the case of State of M.P. v. Bharat Heavy Electricals - 1998 (97) E.L.T. 33 (S.C.) = 1998 (25) RLT 327 (S.C.). 11.Ld. Counsel, further, submitted that Department did (sic) [not] take any samples for chemical test and also did not place any evidence of the item being marketable and hence they have not discharged their burden and on this ground also he relied on large number of citations cited supra. 12.He also submitted that Rule 209A of the Central Excise Rules is not invocable and in this regard also, relied on large number of judgments. Some of which are noted herein below :- (1) Killick Nixon Ltd. v. CCE, Aurangabad - 1998 (97) E.L.T. 436 (T) (2) Standard Surfactants Ltd. v. CCE, Kanpur - 1998 (103) E.L.T. 675 (T) (3) Cipta Coated Steels v. CCE - 1999 (113) E.L.T. 490 (T). 13.Ld. SDR defended the order and submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted into liquid sodium silicate by addition of water and pumped into the boiler with a mixture of 60 Kgs of Sodium Hypochloride solution (Liquid Bleach) which helps in coloring and bleaching the final products i.e. Sodium Silicate. The finished product is manufactured by Steam boiler to a pressure of approx. 50 Kgs./cm. sq. equivalent 45 Celsius. The supplier of the solid sodium silicate is not the ultimate consumer in the light of the definition of the term "Consumer". The Addl. Commissioner in the impugned order has clearly noted in Para 22 which is extracted supra that liquid sodium silicate could not be stored for a long time and only solid sodium silicate is marketed as such. The Department has not drawn any sample for chemical test and taken any expert opinion about the shelf life of the item and as to whether it can be used directly by the consumer. There is no evidence of marketability produced by the department to discharge the burden that liquid sodium silicate after several processes become a new product, which can be marketed and used by the consumer. Due to fatal mistake on the part of department and in view of clear admission made by the Addl. Commissioner in the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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