TaxTMI 
TaxTMI 
TaxTMI 
2000 (10) TMI 962
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....lant or under Heading 28.34, as upheld by the Commissioner (Appeals) under the impugned Order. 2. Shri V. Lakshmikumaran, ld. Advocate, submitted that the Appellants obtain saltpetre from mines which contains 89% Potassium Nitrate and impurities including other salts; that the mined material is dissolved in water at 100°C when Potassium Nitrate dissolves fully giving rise to a saturated solution thereof which is removed to a wooden tank and left to evaporate when saltpetre containing 94% Potassium Nitrate settles as white crystals; that thus the Appellant is engaged in the purification of saltpetre by the Crystallisation process carried out on the saltpetre obtained by mining; that the process of purification does not amount to ma....
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.... were deleted does not make any different that if saltpetre was a specified goods included in the Schedule; it would not have been separately mentioned; that this shows that saltpetre is not excisable and as there is no change in the Schedule from 1992 the position has not been altered; that Notification No. 62/57 dated 27-7-1957 was issued by the Government providing that no licence shall be required for the manufacture and refining of saltpetre; that Section 3 of the Central Excise Act provides for levy and collection of duties on excisable goods at the rates set forth in the Schedule to the Central Excise Tariff Act and as the impugned goods is not covered by the said Schedule, excise duty cannot be levied and collected; that by Finance ....
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....ould fall outside the scope of Chapter 25. The ld. Advocate contended that the present matter is on even stronger ground since while crystallisation is one of the processses of concentration which takes the goods outside the purview of Chapter 25 but the said process has only concentrated the Potassium nitrate content of saltpetre and not brought about any other chemical or structural change; that the impugned product is already in crystal form and as such the process undertaken by them is not crystallisation; that the Appellant is not changing the structure of the impugned product and as such it will be covered by Note 2 to Chapter 25. In support he referred to the test report dated 28-11-1996 of the Chemical Examiner regarding crude saltp....
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....sation to give refined saltpetre; that Note 2 to Chapter 25 excludes 'Crystallisation' process from the purview of Heading Nos. 25.01, 25.03 and 25.05 and accordingly the impugned product goes outside the purview of Chapter 25. He further, submitted that the process undertaken by the Appellant amounts to manufacture as it results in the emergence of a new product known in the commercial trade as refined saltpetre or potassium nitrate having different characteristics and use; that the refined saltpetre finds uses in the manufacture of fireworks, gun powder, matches and metallurgical fluxes; that as per findings in the impugned Orders in Chemicals, where purity is an essential factor having a bearing on the end use of product it can certainly....
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....s generally understood to mean "bringing into existence a new substance", and does not mean merely "to produce some change in a substance" however minor in consequence the charge may be". The Supreme Court referred to the following passage quoted in Permanent Edition of Words & Phrases from an American judgment - "Manufacture implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation; a new and different article must emerge having a distinctive name, character or use." 7. It is, therefore, apparent that for being charged to duty of excise, it is required that goods are produced or manufactured and manufacture will be complete only if a new and differen....
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....hat purification process undertaken by the Appellant does not constitute manufacture as no new commodity comes into existence. He has placed reliance on the decision in S.D. Fine Chemicals case, supra. In that case the Appellants were undertaking purification of bought out chemicals by way of distillation/recrystallisation. It was held by the Tribunal that process of purification does not amount to manufacture as there was no change in the name of the product, no new ingredients had been added and the name and character of the product continued to be the same. The Tribunal held "In the present case, admittedly only the grade of the Chemical gets change and hence the test of manufacture as laid down by the Hon'ble Supreme Court in the ca....