Customs, Excise and Gold Tribunal - Calcutta
Keventer Agro Ltd. vs Commr. Of Central Excise on 16 January, 2003
Equivalent citations: 2003(88)ECC251, 2002ECR264(TRI.KOLKATA), 2003(160)ELT321(TRI-KOLKATA)
JUDGMENT Archana Wadhwa, Member (J)
1. Demand of Rs. 4.10 lakhs has been confirmed against the appellants by including the value of straw in the value of fruit juice in the name and style "FROOTI". The said demand of duty has been confirmed for the period from 4.4.89 to 10.9.91 by way of issuing of show-cause notice dated 31.12.92.
2. During the adjudication proceedings, the appellants contested the demand on the ground that straw is not an essential part of the fruit drink and the same is being supplied by them to facilitate a particular style of drinking of the FROOTI. The final product can also be consumed in other styles without the straw and as such, straw is not an essential and independent part of the product. In fact, they contended that the packet contained the marks with the words 'cut here to pour' -- which clearly establish that the product can also be consumed without the straw and straw is only optional. If the container is cut in the manner printed therein, there is no need to use the straw. The applicant/appellant company also challenged the demand on the point of limitation.
3. The above contention of the applicants/appellants on merits was accepted by the Assistant Commissioner who accordingly dropped the demand against them, vide his order dated 15.7.97.
4. The Revenue filed an appeal there against before the Commissioner (Appeals) who set aside the order passed by the Assistant Commissioner. Hence the present appeal.
5. The appellants before us relied upon the earlier decisions of the Tribunal in the case of Parle Beverages Ltd. v. Collector of Central Excise, Bombay, 1998 (61) ECC 529 (Tri) : 1998 (104) ELT 72 (Tri) wherein it was held that straw used in consume FROOTI, is an optional product and the value of the same is not includible in the assessable value of FROOTI. To the similar effect is another decision of the Tribunal in the case of Venkatesh Beverages Ltd, v. Collector of Central Excise, Indore, 1998 (62) ECC 200 (Tri) : 1999 (108) ELT 163 (Tri), laying down that straw is supplied with the fruit juice only to provide convenience to the consumer and the fruit juice is capable of being consumed without use of straw. The Commissioner (Appeals) has distinguished the above orders by observing that in the present case, the appellants were supplying straw with 100% of their clearances whereas in the above referred decisions, supply of straw with the FROOTI was only to the extent of 7.17% to 53.50%.
6. After hearing Dr. Samir Chakraborty, Ld. Advocate for the appellants and Shri T.K. Kar, Ld. SDR for the Revenue, we find that the Assistant Commissioner while dropping the demand of duty against the appellants has held as under:
"The question in the instant case is - (a) whether straw is essential or optional (b) whether the product can be consumed without straw. The straw are supplied with the product to facilitate particular style of drinking "Frooti". The final product can also be consumed in other style without straw. Straw is not an essential and indispensable part of the product. The soft point has been provided in, the packet for piercing the straw for consumers who prefer to drink in a particular way. It can also be drunk without the straw piercing the said soft point. The packet containing the product bears marks with the word "cut here to pour" which clearly establishes that the product can also be consumed without straw and straw is only optional. If the container is cut in the manner printed therein, then no need to use the straw.
Thus straw is not an essential one. It is only an accessory and not an essential part.
Taking all the relevant consideration into account, I pass the following order:-
'Straw supplied separately alongwith the final product is not an essential item and only an accessory. Straw is a bought out item and supplied by specific request of consumer and not forming the part of the final product. Value of straw need not be included in the assessable value.' "
From the above observations made by the Assistant Commissioner, it is clear that the straws are supplied separately alongwith the final product and they are optional items. The Tribunal in the above two cases involving the same product, has held that such straws supplied with Fruit juice are not an integral part of the main product and as such their cost is not includible in assessable value of fruit drink. We note in the case of Venkatesh Beverages Ltd. v. Collector of Central Excise, 1998 (62) ECC 200 (Tri) : 1999 (108) ELT 163 (Tri) that straws were supplied along with the each container. As such distinction made by the appellate authority that straws are being supplied in 100% cases in the present appeal is not justified.
7. Inasmuch as the issue is squarely covered by the above referred decisions of the Tribunal, we set aside the impugned order and allow the appeal with consequential, relief to the appellants.