Customs, Excise and Gold Tribunal - Tamil Nadu
Collector Of C. Ex. vs Brooke Bond India Ltd. on 29 April, 1998
Equivalent citations: 1998(101)ELT296(TRI-CHENNAI)
ORDER S.L. Peeran, Member (J)
1. This is a revenue appeal against the order dated 18-2-1993 passed by the Commissioner (Appeals), Trichy. He has held that the re-processing of instant clotted coffee does not result in process of manufacture and hence the appellants were carrying out the process on the coffee which has come back in a damaged condition for re-processing and is not dutiable. He has noted the appellants submissions that the instant coffee is manufactured from duty paid coffee beans which are roasted and granulated and mixed with chicory roasts and then extracted and spray dried to form instant coffee. In the present case, in the damaged clotted instant coffee, the appellants carried out re-processing by emptying the damaged packets and dissolving them in hot water and then spray drying the same and once again pack them in new packets. The Commissioner also held that the A.C. misdirected himself with regard to the re-processing of clotted coffee as given by the assessee and that re-processing does not involve grinding of coffee seeds, roasting and granulating the coffee beans and mixing with chicory roasts. Therefore, he has concluded that re-processing of clotted coffee appears to be different from the manufacture of instant coffee and such process does not amount to process of manufacture and the demands raised are not proper and correct.
2. The revenue in this appeal contends that the observation of the Commissioner is not correct due to the following facts :
"1. That as per the information and flow chart submitted by the party, the clotted coffee is dissolved in water and added to regular mixture of coffee/chicory dissolved water and further manufacturing process is carried on, thereby the lost aroma and flavour of the clotted coffee is recouped by mixing it with the fresh product mix of instant coffee. In the process, the clotted coffee also absorbs the lost aroma and flavour.
2. That the clotted coffee for all practical purposes is a waste and has no market value and there can be no question of any ordinary process other than what they have declared to the department as mentioned above at para 1 is required.
3. That the party if at all changed their process from what they have declared earlier to the Department, they ought to have intimated the same. Their denial of their earlier intimation before the Collector (Appeals) not correct and that the learned Collector should not have entertained the said stand at appeal stage.
4. That the learned Collector (Appeals) has not taken the factual position of the issue and issued order based on the party's after-thought statement placed before him."
3. Arguing for the appellants, the learned DR submits that it is a fresh process carried out by them and such fresh process results in marketable commodity and therefore, it has to be held as a process of manufacture calling for imposition of duty.
4. The learned Advocate submits that the duty had already been paid on the goods which had left the factory. Due to some defects the goods had come back under proper procedure. The assessee has followed the procedure for receiving back the said goods and they merely added water and dried them to remove the clotting in the granulates. Since the quantity received back had already duty paid under D-3 No. 11, dated 28-11-1990, the question of paying duty does not arise. Hence, the Commissioner has rightly dropped the proceedings. He submits that in any case in a similar facts and circumstances the Tribunal has held that re-processing/re-conditioning of glucose on such material does not amount to process of manufacture as can be seen in the case of CCE v. Maize Products Ltd. reported in 1994 (73) E.L.T. 390 (Tribunal). He also relies on the judgment of Division Bench rendered in the case of Shri Krishna Gyanoday Sugar Ltd. v. Govt. of India reported in 1980 (6) E.L.T. 183 (Patna), wherein the Hon'ble High Court has held that re-processing of defective sugar does not amount to a new product as on such re-processing the end product produced is only sugar from the defective sugar.
5. On a careful consideration of the submissions made, we are of the view that the order of the Commissioner is a well reasoned order and there is no illegality or infirmity calling for interference. The citations referred to by the learned Counsel are applicable to the facts of the present case. In the case of CCE v. Maize Products Ltd. the duty had been paid on Anhydrous Dextrose Powder. The same has been returned for re-processing. The assessee has carried out seiving and removal of moisture and the same was cleared without payment of duty. The Tribunal after looking into several aspects held that such process does not amount to existence of new product or commodity and is only re-processing of duty paid goods. The appeal of the revenue was rejected. Even in the case of Shri Krishna Gyanoday Sugar Ltd. cited supra, the Hon'ble High Court has held that re-processing of defective sugar does not bring into existence of new sugar and the question of paying duty on re-processing is not sustainable. We notice in the present case that the appellants are merely wetting out the returned granulates and dried them again and there is no additional inputs to refresh the instant coffee. In these circumstances, we cannot hold there is a new process resulting in fresh instant coffee.
6. We, therefore, uphold the reasoning of the Commissioner in light of these judgments and we do not find any merits in this appeal. Hence, the appeal is rejected.