TMI Blog2023 (4) TMI 1131X X X X Extracts X X X X X X X X Extracts X X X X ..... us items as mentioned above in the prepared dyes. Even though the percentage of the dye content reduced but otherwise there is no change in the chemical character of the product therefore, it is clear that SO dyes purchased by the respondent is already as formulated/ standardized/prepared form of dyes. Chapter Note 8 applies only in a case where the dyes are not formulated/ standardized or prepared. If the dyes are not in the said form or semi-finished form and only after the process it gets converted into formulated/standardized/ prepared then only as per Chapter Note 8 of Chapter 32 the process shall become a manufacture process. The Adjudicating Authority has also considered various certificates produced by manufacturer of SO dyes from whom the respondent had purchased the goods. The said certificate suggests that manufacturer of dyes had supplied prepared/ formulated/ standardized SO dyes in powder form to the respondent which was ready to use. Note-8 to Chapter 32 prescribes conversion from unformulated/ unstandardised or unprepared dyes into formulated/ standardized or prepared form shall amount to manufacture. Since the respondent have provided documentary evidence sugges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing detailed finding dropped the proceeding initiated in show cause notice dated 03/09.04.2012. Therefore, the present appeal is filed by the Revenue. On the same issue involving different period, the assessee also filed appeal. 2. Shri Vijay G Iyengar, learned Assistant Commissioner (AR) appearing on behalf of the Revenue reiterates the grounds of appeal. He submits that respondent have purchased the unformulated/unstandardized/unprepared dyes and converting the same in formulated/ standardized/ prepared dyes by diluting the strength of the dyes for making them ready to use as contemplated in Note 8 to Chapter 32 therefore, the process of such conversion amounts to manufacture hence liable for duty. He placed reliance on the judgment of this Tribunal in the case of Collector of Central Excise, Bombay vs.. French Dyes Chemical (P) Limited 1997 (90) ELT 411. He submits that in view of the Note-8 and judgment cited above, the Commissioner s findings that condition stipulated in Note-8 to Chapter 32 has not been satisfied, is not correct and legal therefore, the impugned order needs to be set-aside and the Revenue s appeal is to be allowed. 2. On the other hand, Shri PP Jade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 2003 (154) E.L.T. 343 (S.C.)-CCE vs. Tata Iron And Steel Co. Ltd. (w) 2003 (153) E.L.T. 491 (S.C.)- Markfed Vanaspati Allied Indus. (x) 1995 (77) E.L.T. 248 (S.C.)-CCE vs. Steel Strips Ltd. (y) 1994 (74) E.L.T. 492 (S.C.)-UOI vs. Parle Products Pvt. Ltd. (z) 1995 (77) E.L.T. 49 (S.C.) - CCE vs. S.D. Fine Chemicals Pvt. Ltd. (aa) 1989 (40) E.L.T. 287 (S.C.) CCE vs. Jayant Oil Mills Pvt. Ltd. 3. We have carefully considered the submissions made by both the sides and perused the record. The issue to be considered in the present case is whether the process of mixing/diluting SO dyes with dry salt, globular salt (sodium sulfide), dextrose etc. to match the strength with the help of ball mill amounts to manufacture within the meaning of Section 2(f) of Central Excise Act, 1944 read with Note-8 to Chapter 32 of Central Excise Tariff Act, 1985. We find that the Adjudicating Authority has considered the entire investigation, statements of the persons, chemical examiner test report while dropping the proceedings of the show cause notice. The claim of the respondent was that except dilution of the readily manufactured SO Dyes, no process is carried out an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sting the purchase of ready to use SO dyes in powder form and sold the same by reducing its strength (dye content) and keeping in view the opinion of Chemical Examiner and the certificates of ATIRA and CRDC to the effect that dye content of the purchased SO dyes was reduced, the process adopted by the assessee of diluting the SO dyes by mixing with dry salt/starch etc. did not amount to manufacture within the meaning of Note-8 to Chapter 32. To arrive at the conclusion, the Adjudicating Authority has relied upon various decisions which support the case of the respondent. In the case of Commissioner of Central Excise vs. Fresh Laboratories 2008 (231) ELT 161 (Tri. Ahmd.) a similar issue was considered by this Tribunal wherein the following order was passed:- Both the appeals, one filed by Revenue and one filed by assessee, are being disposed, off by a common order as the issue involved is identical. Whereas one Commissioner (Appeals) vide his impugned order-in-appeal has held that process of dissolving synthetic organic dye in water does not amount to manufacture, the other Commissioner (Appeals) has held that such activity amounts to manufacture. As such, there are two diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 32 also lays down that it is only conversion of unformulated/unstandardised or unprepared forms of dye into formulated/standardized or prepared form of dyes used for dying which will amount to manufacture and not otherwise. No evidence has been brought out by Revenue to establish that vat powder purchased by the appellants was unformulaled/unstandarsied or unprepared. On the contrary, invoices clearly indicate that they have been classified under Chapter 3204.29 which relates to standardized/formulated dyes only. It is also not denied by the Revenue that vat powder (dye) of different colours by themselves were prepared and formulated dye. They were by themselves standardized dye. Mixing of two standardized/formulated or prepared dye will therefore not amount to manufacture as has also been clarified by Department vide Trade Notice No. 48/86, dated 14-7-1986 issued by Bombay I Collectorate. Even otherwise, a mere change in the shade of standardized dye into another shade of standardized dye cannot be said to bring into existence an entirely new product as standardized dye will still remain a standardized dye only and the classification is not based on colours/shades. In view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specially, when the show cause notices issued were pregnant with the admission on the part of the Revenue as indicated in the opening part of this para. The Revenue having chosen to issue show cause notices, burden of proof was on the Revenue. Mr. Rana is not right in contending that the burden of proof was on the petitioners. The burden always lies on the person who asserts that the particular goods are excisable. It lies at first on the party who would be unsuccessful if no evidence at all was given on either side. There is essential distinction between burden of proof and onus of proof. The burden of proof lies upon the person who has to prove a fact and it never shifts, but the onus of proof shifts. Onus means the duty of adducing evidence. Assuming that onus, has shifted on the petitioner, then, the evidence produced by the petitioners has substantially established the link between the material supplied and used by the petitioners. 17. The concept of marketability to which the respondent No. 2 had given go-bye cannot be said to be legal in view of the law laid down by the Apex Court in the case of Bhor Industries Ltd. (supra) and reiterated in the case of Ambalal Sarabha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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