TaxTMI 
TaxTMI 
1986 (7) TMI 358
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng and grinding of chicory powder with aid of power amounts to manufacture as defined in the Central Excises and Salt Act and hence the chicory powder so manufactured is classifiable under Tariff Item 68 CET from 1-3-1975 and that the exemption claimed under Notification No. 55 of 1975 was not admissible. The common order-in-appeal is dated 7-3-1981 and it is the two revision petitions preferred to the Central Govt. against the said order that are now before us, on transfer, as appeals. 3. We have heard Shri V. Lakshmi Kumaran, Advocate for the appellants and Shri K.C. Sachar, JDR for the Department. 4. We shall first discuss the two general questions that arise in both appeals i.e. whether roasting and grinding chicory roots with the aid of power for preparation of chicory powder would amount to manufacture as defined in the Central Excises and Salt Act and that even if so whether the chicory powder so manufactured is entitled to exemption from duty under Notification 55/75 C.E., dated 1-3-1975. Thereafter the facts of the two appeals will be considered with reference to other reliefs. 5. There is no doubt that the roasting and grinding of chicory roots is done by both ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... again been observed as follows :- "As chicory has not been declared as an excisable goods it is not liable to duty and it does not fall under Item No. 68 of the First Schedule." Based on these observations it is contended that we must also hold that the chicory powder manufactured by the two appellants cannot be classified under Tariff Item 68 CET. We may note that the product that was under consideration in the case before the Andhra Pradesh High Court was a mixture of coffee powder and chicory powder, commercially known as French Coffee. It was in considering the excisability of this compound product that the above observations have been made. The High Court was not (sic) chicony powder (manufactured with aid of power) for the purposes of levy of excise duty. It has already been seen that the process of roasting and grinding with the aid of power to convert chicory roots into the new and distinct commercial commodity (chicory powder) amount to a process of manufacture as defined in the Central Excises and Salt Act. In these circumstances the contention of the appellants to the contrary is not acceptable. 7. The next question is whether, as claimed for the appellants, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e dismissed confirming the orders of lower authorities. 9. But so far as Appeal No. 1071 of 1981 is concerned, there are certain other facts necessary to be considered before granting or refusing relief. Chicory powder became excisable only from 1-3-1975. It is pointed out for the appellants that from 1-3-1975 duty was being paid under Tariff Item 68 CET at the instance of the Department though the appellants were claiming that no such duty was payable. It is in this connection stated that the appellants had written a letter dated 2-7-1975 to the Collector claiming that no duty was payable under Tariff Item 68 in respect of the chicory powder manufactured by them. This relief was being claimed thereon under Notification No. 55 of 1975 and not on the other ground that the goods do not fall under Tariff 68 CET in the absence of any manufacture as defined in the Act. The reply to this letter from the Collector was under letter dated 19-7-1975 which read "as roasted chicory has been accepted as a food article, it is not dutiable under Tariff Item 68". It is pointed out for the appellants that in view of this clarification no duty was being paid after the receipt of this letter and t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pronouncements of the High Court or the Supreme Court which necessitated the reconsideration of the issue. The contention of the appellants in the present instance is that there was no such compelling circumstances and that in fact no such compelling circumstances were even disclosed in the show cause notice. But Shri V. Lakshmi Kumaran made it clear in advancing this argument that he was not relying on any principle of res judicata or estoppel. That is why he contended that even if we have to conclude that the Department was justified in its stand that the process of roasting and grinding the chicory roots with the aid of power to prepare chicory powder amounted to manufacture, demand for duty could be made prospectively from the date of the show cause notice only and not for any antecedent period. 13. As already stated, the appellants who were paying duty stopped payment of duty in view of the letter of the Collector dated 19-7-1975. No doubt Shri Sachar contended that this letter was not the same as an order on a classification list and that, on the other hand, the letter was in response to a communication accepting dutiability under Tariff Item 68 but claiming exemption in t....