TaxTMI 
TaxTMI 
1998 (6) TMI 238
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....nts have issued with show cause notice on 7-6-1988 alleging that the appellants had fully suppressed the fact of manufacture of cola/orange concentrates/flavours falling under T.I. 68 of erstwhile Central Excise Tariff and Chapter sub-heading 3301 of Central Excise Act in their factory and cleared the said goods without obtaining Central Excise licence and without following Central Excise procedures and without payment of Central Excise duty during the year 1983-84, 1987-88 (up to December, 1987) and thereby evaded payment of Central Excise duty to an extent of Rs. 4,79,490.71. Statements were recorded on the deduction of goods cleared through autorickshaw bearing No. MED 1517 on 29-12-1987 by inspecting squad. The goods carried in the autorickshaw was not accompanied by Central Excise Gate Pass. One Karunanidhi, Accountant of the appellant had informed the officers that the company is manufacturing Industrial Flavours and concentrates and stated that neither they had Central Excise Licence nor filed any declaration to Central Excise Department. The consignment contained 12 card board boxes valued at Rs. 13,710/- and there was no proof of Central Excise payment. On follow up action....
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....ty of manufacture and the term `manufacture' under Section 2(f) of the Central Excise Act includes any process incidential or anciliary to the completion of a manufactured product. Since power is used in the manufacturing process of Cola/orange concentrates for testing the incoming raw materials and outgoing finished products which is incidential and anciliary in the completion of the manufactured product, therefore he held that testing the goods with the aid of power which is a must, amounts to manufacture of goods with the aid of power. He noted that the party did not contest the classification. He has held that benefit of the Notification No. 179, dated 18-6-1977 is not applicable and the said notification covers only goods falling under T.I. 68 in or in relation to manufacture of which no power is ordinarily carried on with the aid of power, from the whole of duty leviable thereon. He has also held that from 1-3-1986 onwards, the goods filed under sub-heading 33.03 of Central Excise Act as claimed by the party as the goods are used as raw material in the food and beverage industry and they are classifiable under Heading 33.02. He has held that Notification No. 230/86, dated 3-4....
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....ause it is not a process of manufacture. Likewise, he relied on the judgments rendered in the case of Jain Soaps Mills v. Union of India and Others as reported in 1979 (4) E.L.T. (J 147) which was also on the like terms. He also relied on the judgment of Sandoz India Limited v. U.O.I. and Others as reported in 1980 (6) E.L.T. 696 (Bombay) which laid down that mere change in physical form does not amount to manufacture. 6. Ld. DR submits that the appellants were carrying on the process with the aid of power and the final product cannot be manufactured without using machines which were run on power and they were fully aware of the process of manufacture and hence they ought to have taken Central Excise licence and paid the duty. They have not filed any declaration and therefore having suppressed facts wilfully to department and hence larger period liable to be invokable. 7. On a careful consideration of the submissions, we notice that the appellants are not contesting the case on merits. Even they are not contesting with regard to use of power for the manufacture of the final product. Their only contention is that the activity which they had carried on with the use of....
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....ach of the judgments cited above are clearly distinguishable. In the case of Intercity Cable System (P) Ltd., the Tribunal noted the facts and also examined the clarification issued by the Board in their letter S/213/41/88-CX. 6, dated 30-12-1988 to come to conclusion that the appellants were carried away with such clarification to hold that there is no suppression of facts. There is no such clarification in the present case which could be said to come to the rescue of the party. Even in the case of CCE v. Music India Ltd. - 1988 (97) E.L.T. 171 (Tribunal), the Tribunal noted the controversy pertaining to the valuation on job work basis and the includibility of cost of raw materials provided by customer to job worker, which had been a subject matter of much controversy and the issue came to settled only through Supreme Court judgment in the case of Ujagar Prints Ltd. v. UOI - 1988 (38) E.L.T. 535 (S.C.). This judgment is also not applicable to the facts of the case. Even in the case of Indian Aluminium Cables Ltd. the Tribunal noted the plea of the appellants as regards exemption of waste of scrap in view of the number of judgments they had disclosed the fact of clearance of waste ....