Customs, Excise and Gold Tribunal - Delhi
Parle Exports (P) Ltd. vs Collector Of Central Excise on 26 October, 1987
Equivalent citations: 1988(15)ECC164, 1988ECR469(TRI.-DELHI), 1988(33)ELT445(TRI-DEL)
ORDER V.T. Raghavachari, Member (J)
1. Show cause notice dated 13-8-1979 was issued to the appellants M/s. Parle (Exports) Private Limited, alleging that they had removed excisable goods under Item 68-CET during the period 1-3-1975 to 18-4-1979 and had evaded payment of duty amounting to Rs. 3,50,963.22. The goods referred to therein were non-alcoholic beverage bases. The appellants replied denying the allegations. The show cause notice was revised under a subsequent letter dated 16/ 18-10-1979, invoking the provisions of Rules 173PP(i), 173PP(iii), 173PP(vi) and 174 of the Central Excise Rules. After adjudication, the Collector of Central Excise, Bombay-1 passed order dated 29-12-1984 confirming the duty demand and further imposing a penalty of Rs. 25,000/-. This appeal is against the said order.
2. We have heard Shri J.R. Gagrat, Advocate, assisted by Shri CM. Mehta and Shri R.C. Pandey, Advocates, for the appellants and Shri K.C. Sachar for the Department.
3. Shri Gagrat submitted that this issue as to the dutiability of non-alcoholic beverage bases manufactured by the appellants has been settled by this Tribunal under its decision reported in 1987 (27) ELT 349. Shri Sachar submitted that he would be canvassing the correctness of the said decision advancing arguments in this appeal.
4. The above decision related to the non-alcoholic beverage bases manufactured by the present appellants in their factory within the jurisdiction of the Collector of Central Excise, Baroda. There also the appellants had claimed eligibility for exemption under Notification 55/1975, dated 1-3-1975. The authorities having rejected the said claim the matter had reached the Tribunal. Under the decision cited supra, the Tribunal held that the products (non-alcoholic beverage bases) were eligible for duty exemption in terms of Serial No. 1 of the Schedule to Notification No. 55/75. If that decision is to be followed in this appeal also, the appeal will have to be allowed. The contention of Shri Sachar is that the said decision was wrong since the same ignored the decision of the Andhra Pradesh High Court in the case of Brooke Bond India Ltd. The judgment of the single judge of the Andhra Pradesh High Court as reported in 1980 ELT 65 had been confirmed by a Division Bench on appeal as reported in 1984 (15) ELT 32. The contention of Shri Sachar is that the Andhra Pradesh High Court had held that coffee and coffee-chicory blend are beverages and not food and, therefore, not entitled to exemption as food products or food preparations under Notification No. 55/75 and, therefore, we should also hold that the non-alcoholic beverage bases in issue being beverages, in liquid form, would not be entitled to exemption under Notification No. 55/75. Thus the argument of Shri Sachar is that no beverage can be called a food since the Andhra Pradesh High Court had held so and that in the absence of any contrary decision of any High Court we should follow the said decision and dispose of the present appeal on that basis.
5. This question whether a beverage could be a food or a food product or a food preparation has been elaborately discussed in the judgment reported in 1987 (27) ELT 349 and it had been held that beverages could also be food or food products or food reparations. As regards the reliance on the part of Shri Sachar on the judgments of the Andhra Pradesh High Court we may refer to the bservations of the High Court at the end of paragraph 32 in 1980 ELT 65. The High Court had observed "as I have said earlier in some cases, the dividing line between "beverages" as well as "foods" may be thin - they may in some cases, overlap, but so far as coffee or coffee-chicory blend is concerned there can be little doubt that it is a beverage than a food." It is, therefore, clear that the Andhra Pradesh High Court had not ruled that a beverage can in no circumstance be a food. In fact, in the passage quoted above, the High Court has indicated that a beverage could well be a food in particular instances. Hence Shri Sachar is not correct in his contention that merely because the subject goods (non-alcoholic beverage bases) are beverages, they cannot, for that reason, be food preparations.
6. In the judgment relied on by Shri Gagrat this Tribunal had referred to a passage under Heading 21.07 of the CCCN to draw support for the conclusion that the subject goods would be food preparations. Shri Sachar submits that there are several decisions (referred to by the Division Bench of the Andhra Pradesh High Court in the decisions mentioned supra) cautioning against use of terms and definitions in one statute for construe-ing similar words in another statute. But this aspect was also taken to consideration in 1987 (27) ELT 349 and it was observed that in the absence of any definition of the term in the Central Excise Tariff Schedule and Notification No. 55 of 75 as to what would be a food preparation reference was being made to CCCN.
7. In the said decision reference had been made to the Import Trade Policy of the Government of India for the period April 1981 to March 1982. Shri Sachar contended that even under that policy, coffee had been mentioned under the same heading but that in view of the Andhra Pradesh High Court judgment coffee would not be a food and hence the inclusion of non-alcoholic beverage bases under the said heading (foods) in Appendix 17 would not be relevant. While it is true that coffee had been held by the High Court to be not a food, that would not, for that reason, lead to the conclusion that all other products mentioned in Appendix 17 of the ITC Policy would also not be food.
8. In the earlier decision, the Tribunal had relied upon the entry in the Encyclopaedia Britannica Vol. 13 at pages 420-421 to draw support for the conclusion that beverages could also be food or food preparations. Here again the comment of Shri Sachar was that since coffee has been held by the Andhra Pradesh High Court to be not a food, because it is a beverage, the classification in the Encyclopaedia Britannica mentioning beverages also as foods will have to be ignored. But, as already noted, the Andhra Pradesh High Court had not held that a beverage can in no circumstance be a food.
9. Shri Gagrat pointed out that before the Collector also the appellants relied on an opinion given by Shri D.V. Rege, Professor of Food Technology in the University of Bombay to the effect that the subject goods would be food preparations. He further pointed out that even the chemical examiner of the Department itself had stated that the subject goods may be deemed to fall in the category of food preparations though he had added that before finalising the assessment, it may be worthwhile ascertaining whether the said products are known as food preparations in common parlance and trade. The test reports and opinion are to be found in pages 55 to 58 of the paper book filed by the appellants. The Collector has stated "it would be legally unsafe to rely on the opinion given by Prof. Rege" on the ground that there is no definition of the expression food products and food preparations in the notification. We should in fact think that the opinions of the experts would be relevant and necessary to be considered precisely for the reason that there is no definition in the Act or the notification. If there is a definition of a term in the Act or rules in the certification, we will have to go by that definition only and not by opinions of the experts. In this case it is not disputed that there is no such definition. Therefore, the Collector was not correct in ignoring the opinion of Prof. Rege for the reason that there was no definition in the Act or the notification. So far as the opinion of the chemical examiner, the Collector had made no reference at all thereto in his order. As earlier noted, the chemical examiner has definitely stated that the subject goods may be deemed to fall in the category of food preparations, though he has suggested that enquiry may be made as to the common parlance and trade in this regard. There is nothing to show that any such enquiry was further conducted by the Department or that it went against the tentative opinion offered by the chemical examiner.
10. In view of the above discussion, we are satisfied that there are no reasons not to follow the earlier decision of this Tribunal under which it had not held that the non-alcoholic beverage bases manufactured by this appellant itself were food preparations eligible for exemption under Sl.No. 1 of the Schedule to the Notification No. 55/75. In that view it is unnecessary to go into the other contentions raised regarding limitation etc.
11. The appeal is accordingly allowed and the order of the Collector is set aside.