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TaxTMI 
TaxTMI 
TaxTMI 
2001 (5) TMI 485
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....xtended period of limitation was invoked for demanding central excise duty of Rs. 58,235/-, and for levying penalty. The Commissioner of Central Excise, Coimbatore, who adjudicated the matter, after discussing the various submissions made by NEPC, confirmed the demand of Rs. 58,235/-. No penalty was however imposed. 2. The matter was heard on 19-1-2001 when Shri J. Shankarraman, Advocate appearing for NEPC submitted that prior to 16-3-1995 when Chapter Note 2 was inserted in Chapter 22 of the Central Excise Tariff, the mineral water as manufactured by NEPC was not excisable. He also submitted that the appellants had not collected any central excise duty from their customers and if excise duty is found leviable then their sale price should be considered as cum-duty price for the purpose of determination of the assessable value and the quantum of duty payable by them. He relied upon the Tribunal's Larger Bench decision in the case of Srichakra Tyres Ltd. & Ors. v. Collector of Central Excise, Madras - 1999 (108) E.L.T. 361 (Tri.-LB) = 1999 (32) RLT 1 (Tri. - LB), wherein it had been held that the excise duty held payable subsequently was to be abated from total sale price reali....
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....pleaded that the chemicals were added to the chlorine treated water and it was also subjected to ultra-violet radiation. Even prior to 16-3-1995, such a product in which minerals were specifically added, was excisable and dutiable. It was not a case of just purified or filtered water. It was marketed as a mineral water under all India brand name of the appellants as "Trupthi". Such a product even before 16-3-1995 was excisable and dutiable under sub-heading No. 2201.90 of the Central Excise Tariff. He referred to the Board's Circular F. No. 9/1/94/Cx. 1, dated 20-12-1994, wherein it had been clarified that when the treated water was being de-mineralised, and when mineral salts were added thereto, it was dutiable under sub-heading No. 2201.90. He submitted that the Board's Circulars were for the sake of uniformity and they have a binding effect. He pleaded that even prior to 16-3-1995, the product in question was dutiable and that the facts had been suppressed from the Department. No duty was paid even when such goods were dutiable. In the circumstances, the ld. DR pleaded that the extended period of limitation has been correctly invoked and confirmed by the adjudicating authority. ....
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.... 4. The process of manufacture has been described by them as under :- "Water stored in storage tanks is subjected to chlorine treatment by addition of Sodium Hypo Chloride. 20 to 30 mg. of Calcium carbonate is added to 500 Litres of water to give a taste to the water. To add or reduce the mineral contents in the water the necessary chemicals and equipments like Alum doser are used in their plants. They use Micron filters of different sizes to remove bacteria. To ensure that the water is bacteria free, it is subjected to a series of ultra violet radiation. Then the water is filled into cleaned bottles, closed in airtight manner and sealed." It is seen from this process of manufacture that the mineral water in question had been de-mineralised to take out its impurities and thereafter certain specific chemicals were added to make it a mineral water. This process of manufacture is from the write-up given by the Manager of the appellants' Mineral Water Division on 7-2-1995 and had not been denied or disputed by the appellants, NEPC. 5. The main plea taken by the appellants is that prior to 16-3-1995, they were under a bona fide belief that their product was not excisable. ....
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....d potable water, is whether mineral salt have been added or not. In case, there is addition of mineral salt, the product will have to be treated as mineral water and will be liable to duty accordingly. 3. It is therefore, clarified that in case in addition to processes mentioned above, if mineral salt(s) are also added in the treated water, the resultant product will be mineral water and will be excisable and liable to duty under sub-heading 2201.90. 4. The word "Bisleri" wherever it occurs in Circular No. 8/87 stands deleted. 7. It is clear from the process of manufacture of the appellants that to add and to reduce the mineral contents in the product 'Trupthi' as per requirements, necessary chemicals and equipments were used in their plants. Sodium Hypo Chloride and Calcium Carbonate were added and the product was subjected to the ultra-violet radiation. Thus, the product was covered by the description as contained in the Board's Circular dated 20-12-1994 for classification under sub-heading No. 2201.90 of the Central Excise Tariff. 8. The process of manufacture as given in the write-up of the Manager of the Mineral Water Division has already been extracted above. In....
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....11. Central Excise duty had been demanded for the period 17-12-1994 to 15-3-1995 under show cause notice dated 27-11-1995. The extended period of limitation has been invoked. In para-6 of the show cause notice, it was alleged as under :- "6. From the aforesaid facts, it appears that M/s. NEPC have engaged themselves in the manufacture of mineral water and have cleared them without following central excise procedure and without payment of central excise duty in contravention of the provisions of Rule 9(1), 49, 51, 52H, 53, 173B, 173F, 173G and 226 of the Central Excise Rules, 1944. They also appear to have deliberately suppressed the information from the department with an intent to evade payment of central excise duty." The limitation has been discussed by the Commissioner of Central Excise, Coimbatore, who adjudicated the matter in para 14 of the impugned adjudication order as under :- "14. As far as the question of extended time limit is concerned, it is apparent that the party is fully aware of the clarification issued holding the impugned product to be excisable and hence their failure to take out a registration and pay duty can only be viewed as intentional with the pu....
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....he case of Srichakra Tyres Ltd. v. CCE, Madras [1999 (108) E.L.T. 361 (Tribunal) = 1999 (32) RLT 1 (Tribunal)] as well as that of Modvat credit in the light of our observations above, has to be extended. 16. Subject to above, the appeal is otherwise rejected. Ordered accordingly. Sd/- (Lajja Ram) Member (T) 17. [Contra per : S.L. Peeran, Member (J)]. - With due respect to my ld. brother, my order in the present case is as follows :- 18. In my considered opinion, the appeal is required to be allowed both on merits as well as on time bar. My ld. brother has upheld the order on the ground that the appellants were marketing the brand name "Trupthi" as mineral water prior to 16-3-1995. The appellants in the present case has denied that they have added minerals in the water which is marketed by brand name "Triputhi". They in their reply dated 26th Dec. 1995 to the show cause they have clearly contended that they were only carrying on the process of purification and filtration by various process and subjecting the water to chlorine treatment for removing bacteria in the water. They have specifically denied addition of any mineral salt to such purified water. The m....
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....29) STC 148 held that distilled water is nothing but a purified form of water. It is neither a medicine nor a pharmaceutical preparation nor is it prepared through any manufacturing process and held it to be not taxable. The Tribunal also in the case of Gujarat State Fertilizers Co. Ltd. v. CCE - 1998 (98) E.L.T. 840 upheld this very contention and held that purification of water and selling the same would not bring into existence new goods and set aside the demands. The said order has been followed by this Bench in the case of Mc Dowell & Co. & Others v. CCE Cochin [1999 (105) E.L.T. 577 = 1999 (30) RLT 201 (Tri) . Both these judgments would clearly apply to the facts of the present case and a different view is not possible to be taken. 20. Even on the aspect pertaining to time bar, it is seen that the department was fully aware of the manufacture and sale of the product by the appellants. Furthermore, the Board by their own Circular vide No. 84/84/94-CX, dated 20-4-1994 - 1994 (75) E.L.T. T-13 had clearly mentioned that Aqua Mineral Bisleri treated water would be non-excisable even in the new Tariff. The Circular further added that Explanatory Note to H.S. at page 163 inclu....
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.... Member (Judicial). Therefore, I am not repeating the facts which are recorded therein. After considering the submissions and material on record, I find - (a) The order impugned in this case recorded - "Water stored in storage tanks is subjected to chlorine treatment by addition of Sodium Hype Chloride. 20 to 30 mg of Calcium Carbonate is added to 500 Litres of water to give a taste to the water. To add or reduce the mineral contents in the water the necessary chemicals and equipments like Alum doser are used in their plants. They use Micron filters of different sizes to remove bacteria. To ensure that the water is bacteria free, it is subjected to a series of ultra violet radiation. Then the water is filled into cleaned bottles, closed in airtight manner and sealed." However, in the finding portion, the Commissioner has not come to any findings on Calcium Carbonate, which is being alleged to be added for taste and Sodium Hypo Chloride are in the nature of mineral salts or only chemicals. He has also not come to a clear findings of such additions, to amount to mineralisation of water. It is not clear if the products were at any time tested before and after the processing, t....