TMI Blog2012 (7) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... s not maintainable - 2478 of 2002, 2883 of 2004, 2167 of 2001 - Final Order Nos. A/70-72/2012-EX(BR)(PB) - Dated:- 31-1-2012 - Ms. Archana Wadhwa, Shri Mathew John, JJ. Appeared for Appellant : Shri A.R.M. Rao Shri R.K. Hasija, Advocates Appeared for Respondent : Shri N. Pathak, A.R. Per Mathew John: There are three appeals being decided in this proceeding. Appeal No. E/2478/2002 is an appeal filed by M/s Hindustan Gum and Chemicals Ltd, Ahmedabad. Appeal No.2883/2004 is an Appeal filed by Commissioner of Central Excise, Rohtak against Hindustan Gum and Chemicals, Bhiwani, Haryana. Appeal No. E/2167/2001 is an appeal filed by Saahil Organics, Ahmedabad. All the three appeal involves the issue whether the Treated Tamarind Kernel Powder produced by the assessees is excisable and if yes what is the classification of the product under Central Excise Tariff. M/s Hindustan Gum and Chemicals market the product under the name TPT-12 . M/s Saahil Organics declared their product as textile gum in the classification list filed before Central Excise Authorities. 2. During the relevant time the excise procedure required the assessees to make a declaration of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration vide its order dated 22-09-2011 in Civil Appeal Numbers 2974 0f 2004, 3420 of 2004 800 of 2007 and 2959 0f 2006. While remanding the matter the Honourable Apex Court had observed as under: We have perused the orders passed by the CESTAT. The CESTAT in its order raised an issue whether TPT-12 is classifiable under Heading 1101.00 of the Schedule to the Central Excise Tariff Act as product of milling industry or under Heading 13.01 as claimed, as affirmed by the Commissioner (Appeals). While answering the aforesaid issue, the CESTAT has merely relied upon the circulars/instructions issued by the board in F.No. 10/18/86-CX.I dated 14.8.86. In our view, the CESTAT ought to have considered whether by the process of treatment the Tamarind Kernal Powder has undergone a change when TPT-12 is manufactured and sold as a marketable commodity. However, the CESTAT has not answered this issue. In our view, this is a primary issue which should have been considered and answered by the CESTAT. The CESTAT is the last finding authority on the question of fact. Therefore, the matter requires to be remanded to the CESTAT for a fresh determination of the issue which it had raised for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in making TPT-12. The Counsel for the Appellants submits that after the processes the product remains Tamarind Kernel Powder only. There is a slight change in its solubility in water in as much as after treatment the product is soluble in cold water. His contention is that this change does not result in emergence of a new product and hence no manufacturing process is involved. He relies on the following decisions of the Apex Court in Support of his argument; (a) Thungabhadra Industries Ltd Vs. CTO AIR 1961 SC 412 This matter was in respect of sales tax liability on hydrogenated groundnut oil under The Madras General Sales Tax Turnover and Assessment Rules 1939. This levy at that time was not a value added tax giving relief of tax paid on earlier stages. But there were provisions in the Rules to ensure that this levy on groundnut, ground nut oil and cake was only at one stage. There was no provision in the Rules to deal specifically with hydrogenated groundnut oil. The dispute was basically whether the sales tax had to be paid for a second time when groundnut oil was hydrogenated. The Apex Court decided that there is no need to pay the tax again. (b) CCE Vs. Tikatar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new name namely TPT-12. Thus all the characteristics of a manufacturing process namely, a permanent change in characteristic, a new use, a new name are satisfied in the case of the process of making TPT-12 and therefore the processes should be considered to be amounting to manufacture. 13. We have considered arguments on both sides. We find that the chemical process carried out gives the product a different molecular structure and makes it suitable for a different use. Any person wanting to use Tamarind Powder as thickener in textile industry will not buy and use such powder unless it is subjected to the processes that the appellants are carrying out. So prima facie the processes constitute a manufacturing process. We have also considered the decisions of the Apex Court cited by the Counsel. In para 10 above we have noted the facts, circumstances and law that resulted in the quoted decisions. In the case of Thungabhadra industries the decision was not in the context of the meaning of manufacture in Central Excise Act. The decisions was only to the effect that considering the legal provisions for collection of sales tax prevailing then there was no case for collecting sales tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der: The natural gums, resins, gum resins and oleoresins covered by this heading may be crude, washed, purified, bleached, crushed or powdered. They are, however, excluded from this Heading when they have been subjected to processes such as treatment with water under pressure, treatment with mineral acids or heat-treatment; for example: gums and gum resins rendered water soluble by treatment with water under pressure (Heading 13.02), gums rendered soluble by treatment with sulphuric acid (Heading 35.06), and resins which have been heat-treated to make them soluble in drying oils (Heading 38.06) . 14.4 The Counsel relies on Circular F. No. 10/18/86-CX.I, dated 14-8-86, issued by CBEC, wherein it has been clarified as under : Heading No. 11.01 of the new tariff covers products of the milling industry including flours, groats, meal and grains of cereals, and flour, meal or flakes of vegetables. It is seen that under the HSN, sub-heading 1106.30 covers flour, meal and powder of the products of Chapter 8 of HSN (viz., edible fruits and nuts peels of fruits, etc.). HSN Explanatory Notes which amplify the scope of the aforesaid sub-heading 1106.30 specify that powders, meal or flours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the entries in Central Excise Tariff. The rival Tariff Headings read as under: 11.01 Products of Milling Industry including flours, groats, meal, grain of cereals and flour, meal of flakes of vegetables. 13.01 Lac; Gums, resins and other vegetable saps and extracts. 19. Between the two headings 13.01 is more suitable than 11.01 for the reason that a product made through chemical process like the one cannot be considered to be akin to other products mentioned in 11.01 where no manufacturing process is involved. On the other heading 13.01 mentions gums which is a description which will cover the product better. The Appellants are relying on the entries in heading 13.01 of the HSN which mentions natural gums to argue that the impugned product will fall outside the scope of heading 13.01 of Central Excise Tariff. The word Natural occurring in 13.01 of HSN is conspicuous by its absence in heading 13.01 of the Central Excise Tariff. 20. Let us now examine the matter with reference to HSN notes. As per HSN notes. Tamarind kernel powder is mentioned in the notes under heading 11.06 and heading 13.02 of HSN as re-produced below. Note (C) under heading 11.06 (C) Flour, meal an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y this approach the Revenue s argument that the product was covered under Heading 13.01 of the Excise Tariff has more merit. 23. We also note that in the clarification dated 14-08-86 issued by CBEC, there is no mention about Tamarind Powder subjected to the impugned processes. There is a mention about tamarind powder in packings for retail sale for prophylactic or therapeutic purposes (classifiable under Chapter 30). So it is very obvious that at the time of issue of the clarification Board had considered only raw tamarind powder and tamarind powder processed to make it suitable for prophylactic or therapeutic purposes and not the impugned goods. 24. Now we have to examine the contention of M/s Hindustan Gum and Chemicals, Ahmedabad that in their case the extended period of 5 years cannot be invoked for demanding duty. We note that the matter relates to a period where the system of filing of classification list in advance and seeking its approval by the department was in vogue and the officers of the department were expected to visit factories and conduct necessary verification for approval of classification list and even other-wise. In such a context and against the background ..... X X X X Extracts X X X X X X X X Extracts X X X X
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