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SRK. PRODUCTS (PVT.) LTD. Versus COMMISSIONER OF C. EX., BANGALORE

2007 (5) TMI 373 - CESTAT, BANGALORE

Manufacture - Shigekai powder - Classification of goods - whether the crushing of Shigekai pods and rita mixed in the proportion of 10:1 and marketing in retail packs would amount to process of manufacture and liable to be classified under sub-heading 33 05.99 for purpose of levy of excise duty? - Held that: - reliance placed in the case of State of Maharashtra v. Mahalaxmi Stores [2002 (11) TMI 112 - SUPREME COURT OF INDIA] supports the contention that mere powdering of shigekai nuts and rita w .....

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- Dr. S.L. Peeran, Shri T.K. Jayaraman, JJ. REPRESENTED BY : S/Shri H.S. Padmanabha, M. Chandrashekaran and E.N. Ramachandra, Advocate, for the Appellants. Shri Anil Kumar, JDR, for the Respondent. [Order per : S.L. Peeran, Member (J)]. - In all these appeals, the issue is common and hence they are taken up together for disposal as per law. 2. The question that arises for consideration in all these appeals is as to whether the crushing of Shigekai pods and rita mixed in the proportion of 1 .....

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t. The Hon ble High Court of Karnataka in Writ Appeal No. 1413-1736/98 [1999 (111) E.L.T. 27 (Kar.)] had decided the issue in revenue s favour. The matter was taken up before the Apex Court and the Apex Court in Civil Appeal No. 8608/01 in the case of Shri Ramakrishna Soap Nut Works v. Superintendent of Central Excise and others by their order dated 28th February 07 [2007 (210) E.L.T. 332 (S.C.)] has set aside the division Bench Judgment of the Hon ble Karnataka High Court. The Hon ble Apex Cour .....

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continue to operate. 3. In view of this Supreme Court directions, the appellant in Shri Ramakrishna Soap Nut Works has filed a Memo in Appeal No E/265 & E/ 639/04 to withdraw their appeals as they pertain to the period prior to January 99 and for that period the Karnataka High Court Division Bench judgment would apply to them. 4. In view of the Memo filed in E 265 and E 639/04 in the case of Shri Ramakrishna Soap Nut Works, these two appeals are dismissed as withdrawn. 5. All .....

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d and confirmed on the basis of the Division Bench Judgments of the Karnataka High Court which judgments has been set aside by the Hon ble Apex Court in Civil Appeal No. 8608/2001, dated 28-1-2007. Therefore, the impugned orders are no longer sustainable. It was further submitted that even on merits, the mere process of powdering shigekai pods and rita into shigekai powder would not bring into existence new product for purpose of excisability. It is the submission of the counsel that there was n .....

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1 (2) (ECL) 71 (Mad) is in assessee s favour, wherein it has been clearly held that bringing into existence of shigekai powder will not bring the item within excisable net. The finding rendered by the Madras High court in the said judgments in para 55 to 65 is relied, which is reproduced herein below. 55. The Seeakkai, in my considered view will not fall under the ambit of items other grouped as 3305.99 and therefore it is not an excisable commodity. Seeakkai is a natural product and it is .....

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r any one of the entries relied upon by the respondents. Nor it will fall under other items as the expression has to be read ejusdem generic. 56. A Division bench of this Court had occasion to consider the assessability of Usilai Arappu Powder, Seakkai Powder or Arapputhool under the Tamil Nadu Sales Tax Act and held that the two products will not fall under the entry hair applications . In that context, the Division Bench in W.A. Nos. 875 to 978 of 1994 dated 22-2-1995 held thus :- It is a .....

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d soap nut powder falls within the expression hair applicant. In our view, it is sufficient to notice that the sale of tiger brand soap nut powder for the first time during the period 12-3-1993 to 1-4-94 came to be subjected to sales tax under Serial No 51, First Schedule of the Act pursuant to the impugned letter dated 11-5-1994 as till then, the sales of such product were being subjected to sales tax only under residuary entry at Serial No. 63, Part D, First Schedule of the Act. It is also dis .....

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the counsel for the petitioner contends that Seeakkai powder is not the soap nut powder, but it is separate commodity and it is misnomer to call Seeakkai or Arapputhool as the case maybe as soap nut powder. 58. The meaning of the expression soap as given in the new Webstor s Dictionary is at page-1438 which reads as follows :- A Chemical compound of an alkali and fat, soluble in water, and used for detergent or cleansing purposes. 59. As against the expression soap which is used as a .....

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l Lexicon). Hence it is clear that Seeakkai is not soapnut powder or soapnut. Hence, it is clear that Seeakkai is different from soapnut and it is not in effect a substitute. It is neither a detergent or a scouring powder, nor it has any application to the oil to the hair, nor it will come under any of the headings in Chapter 33 or 34. It cannot also be brought under the expression other in any of the chapters as well. 61. The product which the petitioner marketed, namely Seeakkai Powder or .....

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commodities. Both the Chapters will not apply and therefore the two products are not excisable, though it can not be ruled out that there was no manufacturing process at all. 62. There is manufacturing process by the mixture of two or more items and it may satisfy the definition of manufacture or processing. But the Seeakkai or Arapputhool or for that matter, even assuming that it is being applied for the purpose of taking oil bath to remove the oil from the body or being used a scouring po .....

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he decision of the Apex Court in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai reported in AIR 1999 SC 22 where Their Lordships of the Supreme Court held thus :- 20. Much water has since flown beneath the bridge, but there has been no corrosive effect on thee decision which, though old, continue to hold the field with the result that law as to the jurisdiction of the High Court in entertaining a writ petition under Article 226 of the Constitution, in spite of the alternative statutor .....

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n action as the TRIBUNAL. Hence, this objection is overruled. 64. In the circumstances, the Writ petition is allowed and the rule nisi already issued is made absolute. Consequently, W.M.P. Nos. 19319 and 19320 of 1999 are dismissed and W.M. P. Nos. 9757 and 9758 of 1998 are closed. 65. In W.M.P. No 9759 of 1998, there will be consequential direction to the respondents to forthwith release all the books of accounts, finished products and raw materials seized from the petitioner on 2-1-9 .....

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nd this contention has been accepted by the Apex Court in Civil Appeal No. 8608/01 in the case of Shri Ramakrishna Soap Nut where they referred in the first paragraph itself that the shigekai is a forest product. Therefore it is submitted that the department itself considered shigekai powder as soap nut powder and classified the same under sub-heading 1404.90.21 from 2005-06 onwards carrying nil rate of duty. It is also submitted by learned counsel Shri Anantha Padmanabhan that in terms of HSN E .....

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r in terms of this show cause notice as falling under Chapter Heading 33.05.98. Therefore, it is submitted that the said classification is not sustainable in terms of HSN explanatory notes and also because that item is a vegetable product, it has to fall under 1404.90.21 as soap nut powder carrying nil rate of duty. It is pointed out that the revenue itself has considered the shigekai powder as soap nut powder in terms of the show cause notice dated 3-3-99 issued to M/s SRK Products Pvt. Ltd. 8. .....

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crushing of boulders into small size gitti does not amount to process of manufacture. Further reference is made to Crane Betel Nut Powder Works v. C.C. & C., Tirupathi, 2007 (210) E.L.T. 171 (S.C.) wherein crushing of betel nuts into smaller pieces and sweetening the same with essential/non-essential oils, menthol, sweetening agents etc., does not result in manufacture of a new and distinct product having a different character and use as the end products continues to retain its original char .....

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The Apex Court in the case of Sri Ramakrishna Soap Nut Works in Civil Appeal No. 8608/01 has set aside the Division Bench judgment of the Karnataka High Court for demands subsequent to January 99. The appellant in Ramakrishna Soap Nut Works (Appeal No. 265 & 639/04) has prayed for withdrawal of appeal as it pertains to period earlier to January 99. Hence, these two appeals are dismissed. The Apex Court while setting aside the judgments of the Karnataka High Court has referred to the appeal p .....

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d the Hon ble High court has clearly held in the extracted portion of the judgment (supra) that bringing into existence shigekai powder which is nothing but soap nut powder cannot be considered as excisable commodity for classification under Chapter Heading 3305.99. In terms of this judgement Shigekai powder is nothing but soapnut powder. Therefore, the contention raised by learned counsel Shri Ananthapadmanabhan that for period earlier to 2004-05, vegetable plaiting materials, vegetable product .....

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