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TMI Blog1990 (12) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the petitioner was producing compost manure which was excisable and chargeable to Central Excise duty under Tariff Item 68. 2. It is the say of the petitioner that the petitioner is a Corporation registered under the Companies Act and 51% of its shares are owned by Central Government and 49% of its shares are owned by the State Government. To solve the problem of disposal of garbage in the city of Ahmedabad, it was decided that the garbage received from the city and nearby places can be used as compost manure after subjecting the said garbage to natural process. This was on the basis of the Government of India's order to promote production of compost manure all throughout the country and to solve the problem of disposal of garbage in b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised the following contentions : (1) The process involved in using garbage as compost manure cannot be said to be 'manufacturing process' as defined under Section 2(f) of the Central excise Act and, therefore, the compost manure produced by the petitioner would not be excisable goods. (2) In any set of circumstances even if it is considered to be manufacturing process, yet it is exempt from excise duty because of Notification No. 179/77 dated 18th June, 1977 issued by the Central Government in exercise of its powers conferred by sub-rule (1) of rule by which it has granted exemption to all goods falling under Item 68 of the First Schedule to Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), in or in relation to the manufacture of which no process is ordinarily carried on with the aid of power, from the whole of the duty of excise leviable thereon." Further, by Exemption Notification No. 181/80-C.E., dated 12th November, 1980 'compost manure' is exempted from payment of excise duty. The said notification reads as under : "In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance), No. 55/75-Central Excise, dated the 1st March, 1975, namely :- In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the petitioner to obtain Central Excise licence and to clear the goods after the payment of Central Excise duty at appropriate rate under Tariff Item 68 by its letter dated 14th April, 1980. In our view, once the product is specifically excluded from the main item, then there is no question of applying residuary Item. The residuary Item 68 specifically provides the items which are not elsewhere specified. If elsewhere it is provided and there is specific exclusion of the Item, then it cannot be covered by the residuary Item. The residuary Item 68 prior to its amendment in 1980 was as under :- "Item No. 68 - ALL OTHER GOODS N.E.S. "Item No. Tariff Description Rate of duty 68 All other goods, not elsewhere specified, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the manufacture of which any process is ordinarily carried on with the aid of power, were excluded. The Court held that the expression "not elsewhere specified" in Item 68 means "not elsewhere specified" either for the purpose of taxability of for the purpose of exemption. In order to attract Item 68, there must be a total omission of specification of goods in any of the items preceding Item 68. Hence, as there was specific exclusion, of natural, animal or vegetable fertilizers when not chemically treated in Item 14HH, it cannot be covered by residuary Item 68. 8. However, it is required to be clarified that in view of the Explanation, added to Tariff Item 68 by Finance Act No. 2 even the goods which are referred to in any tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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