Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs Maize Products Ltd. on 6 July, 1994
Equivalent citations: 1994(73)ELT390(TRI-DEL)
ORDER G.A. Brahma Deva, Member (J)
1. This is an appeal filed by the Department against an impugned order dated 17-10-1985 passed by the Collector of Central Excise (Appeals), Bombay.
2. The respondents have received back 6 bags weighing 150 kgs and 34 bags weighing 850 kgs Anhydrous Dextrose Powder for re-processing/re-conditioning/re-packing under Rule 173-H and had cleared after procuring three bags weighing 150 kgs and 16 bags weighing 800 kgs of Dextrose Powder without duty. The party had received the product Anhydrous Dextrose Powder for re-conditioning under Rule 173-H of the Central Excise Rules and had cleared after processing Dextrose Powder. The demand was raised for the products cleared without payment of duty and the same was confirmed by the Assistant Collector. In appeal Collector (Appeals) has observed that Anhydrous Dextrose Powder which was brought in for re-processing/re-conditioning/re-packing and the Dextrose Powder which were cleared subsequently are the same in composition. Seiving does not amount to manufacture. Clearance of the Dextrose Powder without duty was purely protected by Rule 173-H. Accordingly the appeal was allowed by him.
3. The Tariff description of Item No. IE reads as under :-
"Glucose and Dextrose and preparations thereof :-
(i) Glucose in whatever form, including liquid glucose, dextrose, monohydrate and anhydrous dextrose.
(ii) Preparations of glucose and dextrose in which the reducing sugars expressed anhydrous dextrose amounts to more than eighty per cent by weight."
4. Smt. J.M.S. Sundaram, learned SDR appearing for the Revenue submitted that what they have brought in is that Anhydrous Dextrose powder and manufactured into Dextrose Powder. Referring to tariff entry and relying upon the Material and Technology by Longman J.H. DE Bussy at page 616, she submitted that there are three forms of dextrose viz. De-monohydrate dextrose, Anhydrous A-Dextrose and Anhydrous B-Dextrose. They are different forms commercially understood as such. Hence the Department was justified in charging the duty on Dextrose powder since the Dextrose Powder and Anhydrous Dextrose powder are not one and same. She also relied upon the Tribunal's decision in the case of Shriram Refrigeration Industries Ltd. v. Collector of Central Excise, reported in 1986 (26) E.L.T. 353 (T) and also in the case of Triveni Sheet Glass Works Ltd. v. Collector of Central Excise, reported in 1992 (62) E.L.T. 329.
5. Shri Jitender Singh, learned Advocate appearing for the respondents submitted that the process undertaken by the party did not amount to manufacture and after re-processing no new product came into existence. All the three forms of dextrose are liable to duty under same tariff entry and accordingly on re-processing one item into another cannot be charged to duty and he relied upon the following decisions in support of his contention.
(1) Government of India in Re: Union Corporation, Bharatpur -1982 (10) E.L.T. 491 (Govt. of India).
(2) Collector of Central Excise v. Bakul Aromatics & Chemicals Ltd. -1989 (43) E.L.T. 758 (T).
(3) Collector of Central Excise v. Maize Products Ltd. -1990 (49) E.L.T. 544 (T).
6. We have considered the submissions made by both sides and perused the records including citations. We find that the Anhydrous Dextrose Powder was brought in for re-processing and the same was cleared as Dextrose Powder. There is a clear finding given by the Collector (Appeals) that the goods were cleared are the same in composition. The processing of seiving undertaken by the party to remove lumps, which across on account of the absorption of moisture by the item did not amount to manufacture involving the emergence of a new product. Clearance of the Dextrose Powder without duty was clearly protected by Rule 173-H. In the very party's case (supra) reported in 1990 (49) E.L.T. 544 (T) the Tribunal had taken the view that the duty paid rejected bags of 'White Dextrine' and 'Mapropharm Starch' transformed into 'Yellow Dextrine' and 'Maize Starch Powder' respectively without changing the characteristics and propriety of the returned goods does not amount to manufacture and accordingly not liable to duty. Relevant observation is reproduced as under :-
"It is evident that when the rejected duty paid goods were received, they were 'White Dextrine' and 'Mapropharm Starch' but when subsequently cleared, they were 'Yellow Dextrine' and 'Maize Starch Powder'. Thus there was difference in colour in case of Dextrine and there was difference in form in case of Starch. When the goods were produced at the original stage as 'White Dextrine' and 'Mapropharm Starch', they were not found to be of standard quality and therefore, they were returned. On return of the goods as it was not possible by any method on reprocessing to attain the standard quality of the said goods, the goods in question were obtained by application of process without changing the characteristics and propriety of returned goods. This factual position was not rebutted by the Department with any evidence. Since the Supreme Court time and again has held in series of decisions that every change in the raw material is not manufacture; that for transformation of a product, a new and different article must emerge having a distinct name, character or use. Mere change in the physical form, shape or substance of a commodity would not by itself lead to the conclusion that a new article has been manufactured. Following the ratio of the Supreme Court decisions, the Department was not justified in levying the tax on commodity as a new identifiable goods in the present case. Accordingly the appeal is dismissed."
7. On the same analogy and taking into consideration that no other process except process of seiving which did not amount to manufacture and no new product emerged as it was rightly analysed by the Collector (Appeals) in the impugned order and concurring with mat view we upheld the impugned order and accordingly the appeal filed by the Department is hereby dismissed.
8. Operative portion of this order was already pronounced in the open Court on conclusion of the hearing on 17-6-1994.
Dated 29-6-1994 Sd/- Sd/-
(G.A. Brahma Deva) (S.K. Bhatnagar)
Member (J) Vice President
S.K. Bhatnagar, Vice President
9. While agreeing with Hon'ble Member Judicial, I would like to emphasise the following.
10. The Tariff, description of Item No. IE includes inter alia, the following :
"Glucose and Dextrose and preparations thereof :-
(i) Glucose in whatever form including liquid glucose, dextrose monohydrate and anhydrous dextrose."
(emphasis supplied)
11. It is significant that the entry itself emphasises glucose in whatever form and explicitly mentions dextrose monohydrate and anhydrous dextrose as well.
12. Admittedly the dextrose powder which was brought in for reprocessing was cleared simply after seiving and removal of moisture only. Evidently no new commodity emerged. Hence the order of the Collector is required to be upheld. The appeal is therefore rejected.