TMI Blog2001 (5) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... period of limitation was invoked for demanding central excise duty of Rs. 58,235/-, and for levying penalty. The Commissioner of Central Excise, Coimbatore, who adjudicated the matter, after discussing the various submissions made by NEPC, confirmed the demand of Rs. 58,235/-. No penalty was however imposed. 2. The matter was heard on 19-1-2001 when Shri J. Shankarraman, Advocate appearing for NEPC submitted that prior to 16-3-1995 when Chapter Note 2 was inserted in Chapter 22 of the Central Excise Tariff, the mineral water as manufactured by NEPC was not excisable. He also submitted that the appellants had not collected any central excise duty from their customers and if excise duty is found leviable then their sale price should be considered as cum-duty price for the purpose of determination of the assessable value and the quantum of duty payable by them. He relied upon the Tribunal s Larger Bench decision in the case of Srichakra Tyres Ltd. Ors. v. Collector of Central Excise, Madras - 1999 (108) E.L.T. 361 (Tri.-LB) = 1999 (32) RLT 1 (Tri. - LB), wherein it had been held that the excise duty held payable subsequently was to be abated from total sale price realisation by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a product even before 16-3-1995 was excisable and dutiable under sub-heading No. 2201.90 of the Central Excise Tariff. He referred to the Board s Circular F. No. 9/1/94/Cx. 1, dated 20-12-1994, wherein it had been clarified that when the treated water was being de-mineralised, and when mineral salts were added thereto, it was dutiable under sub-heading No. 2201.90. He submitted that the Board s Circulars were for the sake of uniformity and they have a binding effect. He pleaded that even prior to 16-3-1995, the product in question was dutiable and that the facts had been suppressed from the Department. No duty was paid even when such goods were dutiable. In the circumstances, the ld. DR pleaded that the extended period of limitation has been correctly invoked and confirmed by the adjudicating authority. In support of his contentions, the ld. DR relied upon the following decisions :- (1) Ranadey Micronutrients v. Collector of Central Excise - 1996 (87) E.L.T. 19 (S.C.). - Circulars issued by the Central Board of Excise Customs were binding on the officers of the Department. Consistency and discipline are of greater importance than wining or losing a case. (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nner and sealed. It is seen from this process of manufacture that the mineral water in question had been de-mineralised to take out its impurities and thereafter certain specific chemicals were added to make it a mineral water. This process of manufacture is from the write-up given by the Manager of the appellants Mineral Water Division on 7-2-1995 and had not been denied or disputed by the appellants, NEPC. 5. The main plea taken by the appellants is that prior to 16-3-1995, they were under a bona fide belief that their product was not excisable. In any case prior to 20-12-1994 when Board s Circular No. 84/84/94 CX, dated 20-12-1994 issued from File No. 9/1/94-CX. 1 [appearing at 1994 (75) E.L.T. T-13] was issued, it was also the understanding of the Department as could be seen from their earlier Circular No. 9/87 CX. 1, dated 28-7-1987 issued from File No. 9/1/87/CX. 1. In their Circular dated 28-7-1987, the Central Board of Excise Customs had clarified that the Aqua Mineral Bisleri treated water was non-excisable. The process of manufacture of the said product, which was found to be non-excisable, had been so described in the circular itself :- Water is treated with b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al contents in the product Trupthi as per requirements, necessary chemicals and equipments were used in their plants. Sodium Hypo Chloride and Calcium Carbonate were added and the product was subjected to the ultra-violet radiation. Thus, the product was covered by the description as contained in the Board s Circular dated 20-12-1994 for classification under sub-heading No. 2201.90 of the Central Excise Tariff. 8. The process of manufacture as given in the write-up of the Manager of the Mineral Water Division has already been extracted above. In the various decisions relied upon by the appellants, different treatments had been referred to. None of the decisions directly relate to the issue before us. In the case of Gujarat State Fertilizers Co. Ltd. v. CCE, Vadodara - 1998 (98) E.L.T. 840 (Tribunal), the matter related to the de-mineralisation of river water. No specific minerals were added to make it a mineral water. In the case of Mc Dowell Company Ors. v. CCE, Cochin [1999 (105) E.L.T. 577 = 1999 (30) RLT 201 (Tribunal)], the matter related to the soft water. In the case of H.T. Chemical Laboratories v. State of U.P. - 1972 (29) STC 148 (Allahabad), the matter related ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uppressed the information from the department with an intent to evade payment of central excise duty. The limitation has been discussed by the Commissioner of Central Excise, Coimbatore, who adjudicated the matter in para 14 of the impugned adjudication order as under :- 14. As far as the question of extended time limit is concerned, it is apparent that the party is fully aware of the clarification issued holding the impugned product to be excisable and hence their failure to take out a registration and pay duty can only be viewed as intentional with the purpose of evading duty. Hence, I hold that the extended time limit of 5 years is applicable in this case. 12. While we agree with the adjudicating authority that there was suppression of facts, in the facts and circumstances, demanding duty prior to the date of the Board s Circular dated 20-12-1994 does not appear to be justified. The adjudicating authority had not imposed any penalty. Accordingly, the demand is restricted to the period from 20-12-1994 to 15-3-1995. 13. Further, the appellants in Grounds S and T of their appeal had prayed as under :- S. Without prejudice to the above, as per Section 4(4)(d)(ii) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and name Trupthi as mineral water prior to 16-3-1995. The appellants in the present case has denied that they have added minerals in the water which is marketed by brand name Triputhi . They in their reply dated 26th Dec. 1995 to the show cause they have clearly contended that they were only carrying on the process of purification and filtration by various process and subjecting the water to chlorine treatment for removing bacteria in the water. They have specifically denied addition of any mineral salt to such purified water. The mineral water was not subjected to excise duty prior to 16-3-1995 and the same was introduced as a commodity and goods, by virtue of the introduction of Chapter Note 2 to Chapter 22 on 16-3-1995. The period in question is prior to this introduction of Chapter Note. Therefore, the question raised by the appellant assessee is that prior to this introduction of Note 2 to Chapter 22 where the process of purification and filtration without addition of mineral salt would not bring into existence new goods by virtue of Section 2(f) of the Act. It has also been contended that the Board of Revenue by their Circular No. 9/87 dated 28-7-1987 had clearly states th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the facts of the present case and a different view is not possible to be taken. 20. Even on the aspect pertaining to time bar, it is seen that the department was fully aware of the manufacture and sale of the product by the appellants. Furthermore, the Board by their own Circular vide No. 84/84/94-CX, dated 20-4-1994 - 1994 (75) E.L.T. T-13 had clearly mentioned that Aqua Mineral Bisleri treated water would be non-excisable even in the new Tariff. The Circular further added that Explanatory Note to H.S. at page 163 includes clarified or purified water under the category of ordinarily natural water of all kinds . It noted that but there is no such entry of Central Excise side, the manufacture of only mineral bisleri treated water is not excisable . In view of this Board s Circular, it cannot be alleged that appellants had suppressed the fact of manufacture and they did not hold bona fide belief for contending the demands are time barred. This was further clarified by Board letter F. No. 9/1/94-CX. 1, dated 20-12-1994 stating that water which is treated with bleaching powder to eliminate injurious micro-organisms and further purified by filtration and softening the water to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultra violet radiation. Then the water is filled into cleaned bottles, closed in airtight manner and sealed. However, in the finding portion, the Commissioner has not come to any findings on Calcium Carbonate, which is being alleged to be added for taste and Sodium Hypo Chloride are in the nature of mineral salts or only chemicals. He has also not come to a clear findings of such additions, to amount to mineralisation of water. It is not clear if the products were at any time tested before and after the processing, to come to a conclusive findings, that the minerals content are being increased or decreased, as the case may be, to come to a desired mineral level content. The appellant, before me, submitted that Sodium Hypo Chloride and other chemicals are being added to kill the bacteria in the water. This claimed used cannot be confirmed or overruled from the findings in the Order (b) I find that the ld. Member (T), in the order prepared by him, in this case, has come to a conclusion, in para 7 8 thereof, that the process of manufacture undertaken by the appellants is to add and to reduce minerals content of the product Trupthi as per requirements. Therefore, it was cover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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