TaxTMI 
TaxTMI 
2002 (6) TMI 565
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....uity and this aspect was appreciated by the Bench in the course of the hearing as well and the subsequent declarations also contain the same details in regard to the products and the processes involved. However, the assessee's claim for exemption in respect of the products by claiming the Soya Nut as Soya textured protein with 'nil' rate of duty and/or as namkeens, such Bhujiya, Chabena under Tariff Heading 2107.91/2108, had not even been considered. The assessee did not emphasis that the products are 'prasad' or 'prasadam' but edible preparations which were squarely in the nature of namkeens such as chabena and bhujiya. This contention had not also been considered and decided as the exemption has been denied only on the ground of the products not being 'prasad' or' 'prasadam'. This mistake also needs to be rectified. (ii) The Assessee had contended that each one of the respective notifications which had been prevailing, had provided for 'nil' rate of duty for the products by virtue of being either soya textured protein or namkeens such as bhujiya, chabena or sweet meats and snacks and this part of the Assessee's claim for 'nil' rate of duty had not been ....
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.... in School Boys Industries v. CST (1987) UPTC 1145 clearly states in para 3 that "simply because wheat is processed to make it puffed wheat, it cannot be said that the character of wheat ....... substantially undergoes change and the processed wheat acquired altogether a different character. Wheat when processed into puffed wheat still remains wheat" and relying on the judgments of the jurisdictional High Court referred to in para 1(a) of the Misc. application filed on 25-6-2001, the plea that wheat when puffed cannot be regarded as having been manufactured so as to attract Central Excise duty liability. The bona fide nature of the Assesses's contention, with respect, had not been appreciated and the judgments had been sought to be distinguished by stating that those decisions did not go into the question of manufacture for excise duty purposes. With respect, it is pointed out that both the decisions of the Allahabad High Court and also the decision of the Supreme Court in CST v. D.S. Bist & Ors. - 1979 UPTC 151 clearly lay down that a mere process would not by itself make the product different from what it was prior to that process and, therefore, the Assessee's bona fide plea of ....
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.... given the process of manufacture for both the items, had been ignored and this had led apparently to the erroneous observation and finding against the assessee and this mistake also needs to be rectified. (x) in para 29 at page 12 of the order and para 32 at page 13 of the order, it has been wrongly stated that the Assessee had admitted that the goods manufactured are excisable and that there is no dispute on this question. With respect, this finding is wrong and that is why additional ground was taken to plead that the goods are not excisable as there is no manufacture in the process involved of converting wheat into wheat puff and the additional ground was allowed to be taken. Therefore, it is wrong to state that the Assessee had admitted that the wheat puffs are excisable goods. It was specifically pleaded that wheat puffs not being excisable and not having been subjected to the process of any manufacture of new excisable goods, the question of duty liability even under Chapter 1904 of the Tariff did not arise. Even though the Assessee's plea was not accepted by the Tribunal or the Commissioner, it cannot be stated that the Assessee had admitted the goods a....
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....ation and the declarations having been accepted by the Revenue from 13-4-1994 till the show cause notice was issued in 1997, on change of opinion, the question of treating the assessee as having wilfully misdeclared the goods does not arise and the findings in this regard being erroneous, the same would require to be rectified. (xiii) In para 37, the Respondent has been directed to recompute the duty liability and also re-determine the liability to penalty on the Assessee and others except Shri R.N. Goel who has passed away and against whom, the penalty has been held to abate. Directions have also been given in para 40 for the purpose. There is no discussion and/or finding whether any liability to penalty is attracted at all and, if so, for what reasons and by whom. Shri Deepak Garg, one of the Appellants, became a Director in the company only on 20th November, 1996 and the show cause notice was issued on 21-3-1997 pursuant to the visit of the Excise Officers on 22-1-1997 and the demand relates to the period from April, 1992 to January, 1997. Therefore, the levy of penalty on Shri Deepak Garg is totally unwarranted. Since the dispute is one of classification and entitlemen....
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....sp;Misc. application No. E/Misc/241 has been filed by M/s. Adhunik Food Products Pvt. Ltd. with prayer for permission to raise additional grounds of appeals. 6. We have perused the record. These grounds are for taking on records, the decision of the Hon'ble Allahabad High Court in the case of M/s. School Boys Industries, Roorkee v. CST reported in 1987 UPTC-1145 and in the case of CTT v. National Cereal Products Ltd. reported in 1998 STC (111) 241 stating that these two decisions are applicable and binding on the authorities as the factory is within the jurisdiction of Allahabad High Court. The request for considering these judgments is allowed. The Misc. application is accordingly disposed of. 7. Misc. application No. E/Misc/523 is also for raising additional grounds. On perusal of this Misc. application, we note that there is nothing new in it but only a contention that there was discrimination between the appellant and other manufacturer of similar goods. The other manufacturer has been named as M/s. School Boys Industries, Roorkee and Shri Brij Bhushan Kesarganj, Meerut producing similar goods. This is a general point which will be considered while considering t....
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....e manufacturing excisable goods nor had they sought any clarification about the applicability of the exemption notifications. Longer period of demand was also invoked on the ground that there was mis-declaration by suppressing facts. 9. The assessee replying to the SCN submitted that there was no mis-statement or misdeclaration nor any suppression of fact; that they had filed the declaration under Rule 174A on 13-4-94 with the Asstt. Commissioner, Saharanpur; that similar declarations were filed for the year 1995-96 and 1996-97; that they had the bona fide belief that the declaration had been accepted by the Department inasmuch as no communication was received as an objection; that reopening of classification was not justified. In support of this contention, they cited a number of decisions. They contended that they had given the process of manufacture and therefore, suppression and mis-statement cannot be alleged. It was, therefore, contended by them that the demand was time barred. Ld. Commissioner confirmed the demand of Rs. 2,31,20,970/-. He imposed a penalty of Rs. 2,31,970/- as indicated in the copy served on the assessee and held that interest was chargeable. He also....
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....me is used as a food grain even after being melted. 12. In the above two decisions the question whether a particular process amounts to manufacture or not was not the question before the Hon'ble High Court and the cases are different and distinguishable. 13. Let us now examine the contention of the appellant. In the declaration filed on 13-4-94, the process of manufacture has been set out as 'Cereals like wheat, soya are first roasted/puffed in puffing machine'. The chabena/soya textured protein is then sweatened for prasad or salted, sold in unit containers or sold loose. 14. The goods have been described as "Edible Food" preparation (chabena) Prasad, Prasadam and classification has been claimed under Chapter heading 2107.91/2108.90 of the CETA, 85 claiming exemption under Notification No. 2/94-C.E., dt. 1-3-94 read with Notification No. 12/90-C.E., dt. 20-3-90. 15. We also note that Chapter heading 19.04 reads : "19.04 - Prepared foods obtained by the swelling or resting of cereals or cereal products (for example, corn flakes); cereals other than maize (corn), in grain form or in the form of flakes or other worked grains.......". 16. Fur....
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....w of the matter, the Collector (Appeals) acceptance of chiranjidana as 'prasad' classifiable under 21.07 is also not sustainable because the Chemical Examiner was not categorical in his opinion and had required the actual practice be ascertained and it is found that these products are commercially manufactured in the factory and the assessee sells them to the dealer and the goods are generally available in shops and are not confined only to temples. Therefore, the Collector's order is not sustainable in regard to classification on chiranjidana. All the product, on the other hand, are classifiable under sub-heading 1704.90 as soya confectionary for the reasons aforesaid. However, the perusal of the classification, be submitted by the assessee, also indicates that they had claimed exemptions under Notification 33/86 for the products. There is no ground given as to why the exemption under Notification was not considered by the Asstt. Collector. In this context, it is also worth noting that the Chemical Examiner also had indicated that Notification which is similar to Notification 33/86 should also be considered. The notification exempts, among other things, candy sugar under certain c....
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....er liquids) for human consumption. It was also argued that this is a preparation for use directly for human consumption. It was submitted by them that puffed soya nuts were preparations for infants use and were supplied to State Govt. or Central Govt. under Integrated Child Development Scheme. It was meant for providing healthy food to children in primary schools. It was also argued for the appellants that it was Prasad/Prasadam. We have examined the contention of the appellant. We note that it cannot be termed Prasad/Prasad am or Chabena as discussed in paras 17 to 19. We note that where the statute does not contain any definition the test commonly applied is how the product is identified by a class or section of the people dealing with it or using it. It is generally by its functional character that the product is identified. Soya bean puffs have been described in the profile as snacks, breakfast food which enhances longevity. In the profile itself it has not been described as infant food. The product is not prasad/prasadam. The product therefore, qualifies for classification under Chapter heading 21.07 or 21.08. 22. In so far as puffed soya nut is concerned, the argum....
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....arted with the visit of Central Excise officers to the premises of M/s. Adhunik on 22-1-97. Investigations were made thereafter and the facts as alleged in the show cause notice dt. 21-3-97 came to notice. 26. The main argument of the appellant is with regard to the limitation. A demand of Rs. 2,31,20,970.40 had been made through show cause notice dt. 21-3-97 for the period April, 1992 to Jan., 97. It is an admitted position that no information of any sort had been submitted to the Central Excise Department prior to 13-4-94. It was argued that they had filed a declaration on 13-4-94 for exemption from the requirement of taking Registration Certificate and that it should be deemed to be a declaration for the purposes of classification and exemption from payment of duty. As per allegations in the show cause notices no declaration even for exemption from the Registration Certificate was filed for the years 1992-93, 1993-94, 1995-96 and 1996-97. Even in the declaration said to have been filed on 13-4-94 the goods had been declared to be the Prasad/Prasadam, Chabena and Soya textured protein. These expressions had been taken from the exemption notifications. Nowhere they describ....
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....age, they had sought and substantiated any claim for exemption. If an assessee claims exemption from the levy of duty under any exemption notification then it was for him to claim such an exemption and to substantiate the claim for such an exemption. 30. The goods in question were described in the contracts, orders, invoices, etc. not as Prasad/Prasadam, Chebana or Soya Textured Protein, but only for Central Excise purposes they became Prasad, Prasadam, Chabena and Soya Textured Protein, as these were the expressions used in the exemption notifications. In the contracts, orders, invoices, etc. they were described as Wheat Puffs and Soya Nuts. What could be the belief for describing goods differently for duty purposes. No reasonable basis had been given for such a different description, which in the facts and circumstances of the case, is a mis-declaration amounting to suppression of facts, attracting extended period of limitation for raising the demand. 31. The Supreme Court's decision in the case of Padmini Products v. CCE - 1989 (43) E.L.T. 195 (S.C.) referred to their earlier decision in the case of Collector of Central Excise, Hyderabad v. Chemphar Drugs and Lin....
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....m for evading the payment of duty. 33. In the case of Ashwini Vanaspati Industries Pvt. Ltd. v. CCE - 1991 (56) E.L.T. 214 (Tribunal), the matter was decided mainly on the plea of the appellant that they had intimated the authorities about the fact of manufacture of soap without the aid of power, through number of letters written by them, and they had repeatedly invited the Range Superintendent for verification and permission for exemption under Notification No. 28/64-C.E., dt. 1-3-64. In that case the appellants were already manufacturing soap with the aid of power and were paying duty thereon. The Tribunal observed "it would have been and entirely different matter, if the appellants had altogether suppressed from the Department the fact of manufacture of soap without the aid of power or steam and its clearance without payment of duty in terms of the exemption notification". In the present case, the goods were misdeclared even in the declaration for exemption from Registration and the goods had been removed without any approval and the facts on record on which the correct assessments could be made had been suppressed. 34. We, therefore, hold that there is no infirm....