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2015 (10) TMI 1725 - AT - Central ExciseManufacturing activity or not - activity of blending to increase the viscosity of the product- Appellants had mixed Guar Dal Flour/Powder (75%), Guar Dal Powder/Saw Dust (5-10%) and TKP (10-15%) in a blender - Guar Dal Powder, known as Guar Gum - classification under Sub Heading No.1301.10 - Imposition of penalty - Held that:- Appellants received the Guar Dal Powder which is derived from seed of Guar plant. The seed of Guar plant in powder form known as Guar Dal Powder, was received by the Appellant. The Appellant had undertaken a process of the said powder added with other product and TKP. It is also mixed with Methonol and Glycol in a minimum quantity. There is a chemical reaction during mixing of these items and the viscosity of the final product ranges from 0 to 5000 CPH as per requirement of end use of the product. The chemical reaction in the Blender is expressing the magnitude of internal friction in a fluid and there is a change of properties as per end use of the goods. Thus, there is a change of character of the impugned product. There is change of character of the goods of different properties as per viscosity used in various industries. - the activities undertaken by the Appellant would amount to manufacture. - Decided against the assessee. Classification - Held that:- the Guar Dal Flour/Powder was modified by chemical reaction in order to improve their properties as per end use of the product in various industries. So, it is rightly covered under Chapter 13 of the CETA. Extended period of limitation - bonafide mistake - Held that:- Considering the overall facts and circumstances of the case, we are of the view that the extended period of limitation cannot be invoked. In the case of M/s Ravi Gum Industries [2007 (10) TMI 272 - CESTAT, AHMEDABAD], the Appellant is a job worker. As the matter is related to interpretation of manufacturing and classification of the goods, imposition of penalty on the Appellants cannot be sustained. Demand of duty confirmed for the normal period of limitation with Interest - Penalty waived - Decided partly in favor of assessee.
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