TaxTMI 
TaxTMI 
TaxTMI 
2008 (7) TMI 396
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....r referred to as CETA, 1985) as "Plain Starch" or to be classified under heading 3505 of CETA, 1985 as "Modified Starch". Sl. No. Trade Name of starch Usage 1 Anilostarch Mainly used in textile industry for sizing of yarn. Also used in paper industry as a smoothening agent and gives stiffness. 2. Anilostarch-A Edible starch for food and confectionery. 3. Anilostarch-Al Refined starch for tabeleting 4. Anilostarch-SP Refined starch for tabeleting. 5. Anilostarch-H High viscosity for textile sizing and finishing. 6. Anilostarch-L Low viscosity starch for sizing and finishing. 3. Brief facts of the case are as under :- 3.1 The respondents are engaged in the manufacture of plain starches, liquid glucose, modified starches etc. falling under chapter No. 11, 17 & 35 etc. of the CETA, 1985. On the basis of intelligence gathered by the DGCEI, the manufacturing process was verified and after recording statements of some of the officers of the Company, two show cause notices came to be issued as detailed above on the ground that the products mentioned....
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....ntioned in Ch. 5 of the book titled "Technology of Corn Wet Milling and Associated Processes" by Paul Harwood Blanchard Vol. 4 that for the manufacture of ordinary powder starches the flash dryer is commonly used. (c) The expert opinion of Shri Navinchandra G. Parikh dt. 1-8-2005, Dr. L.F. Rabari dt. 2-8-2005 and the deposition made by Dr. G.P. Sharma, Chemical Examiner in his cross-examination revealed that use of Flash Dryer at a temperature of 125 degree centigrade did not bring into existence any variety of modified starch. Dr. Rabari had given a comparative data of wet starch, starch dried in atmospheric condition and starch dried in flash dryer and observed that there was no modification in the structure of native starch on flash drying. (d) Samples were drawn for testing and the Chemical Examiner, Vadodara reported that the sample was plain starch. (e) Shri Narendra Kumar had given his opinion on the basis of use of Sulphur Di-oxide in the process of steeping of maize grains which formed sulphuric acid after reaction with water which was a known bleaching agent which imparted bleaching acid hydrolysis and acid thinning. In view of the process of manufacture given in Ullma....
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.... A most versatile principle comprises a three step wet modification. By applying different reaction condition - temperature, pH, additives - and strict process control specialty products with unique properties are made. These specialty products are named modified starches. They still retain their original granule form and thereby resemble the native (unmodified) starch in appearance, but the modification has introduced improved qualities in the starch when cooked. The paste may have obtained improved clarity, viscosity, film forming ability etc. (c) The specification for Maize Starch for cotton textile industry have been detailed in IS 1184 of 1977 as under :- Physical Seconds Viscosity at 75% 30 Sec. min. Changed to 40 Sec. by Redwood Viscometer No. 1 vide amendment No. 2 in 1983. Chemical Moisture content 13% max. Starch content 98% min. Ash content 0.25% max. Protein content 0.60% max. Free acidity 40 ml. max. PH 4.5 min. Petroleum-Hydro Carbon entractable Matter .25% max. Admittedly these specificat....
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....he use of Flash Dryer and has not considered the above factors at all. She also submitted a copy of the order-in-original No. 3-4/Comm./PKL/06 dt. 30-3-2006 passed by Commissioner, Panchkula. In this order-in-original, it has been held that addition of Potassium Permanganate and Sodium Meta Bi Sulphite even in very small quantities would result in manufacture of modified starches. She has also observed in her order in para 121 "it is clear that native starch is in a condition of least possible modification and even if one chemical is added, physical property changes. Such a product cannot be considered native starch. Neither the BIS nor the HSN notes give any indication that such a change has to be a chemical change or that a change in the brightness does not modify plain starch. I also find that the International Starch Institute lists bleached starch under modified starches as INS No. 1403 along with dextrins (INS No. 1400), acid treated starches (INS No. 1401) and alkaline modified starch (INS No. 1402). Thus, if the starch produced by, the wet milling process is simply dried, it can be called a common or unmodified starch. The Food and Drug Administration of the USA also catego....
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....erature submitted by them in support of their contention that what was manufactured is only plain starch and not modified starch. (i) Revenue cannot plead new grounds other than the grounds raised in the review order issued by the Committee and more so when the grounds pleaded are not the issues arising out of even the show cause notice. 7.1 We have considered the arguments advanced by both the sides in detail. 7.2 The first question to be decided is whether any modification in starch takes place during the manufacturing process adopted by the respondents. Commissioner has relied upon Ullman's Encyclopedia of Industrial Chemistry. His argument is that Section 1.1 of the chapter refers to starch and Section 1.2 refers to modified starch and in the literature, use of Flash Dryer has been mentioned in the process of manufacture of starch and not in the process of modified starch. He has also relied upon Chapter 5 of the book titled "Technology of Corn Wet Milling and Associated Processes" by Paul Harwood Blanchard Vol. 4 and in this chapter, it has been mentioned that for the manufacture of ordinary powder starches, the Flash Dryer is most commonly used. The expert opinion of Shri ....
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....ee has said that the chemical reports should not be considered. Further once the whole manufacturing process has been explained, to say that the Adjudicating Authority or the appellate authority should consider only one aspect of the manufacturing process is not correct especially if such a view results in wrong classification and wrong levy of central excise duty. The objective is to correctly classify and levy the central excise duty. Therefore once the whole manufacturing process has been explained in the show cause notice, it is necessary for the Adjudicating Authority and the appellate authority to look at the process as a whole and further if on the request of the respondents, if any, further verifications/tests have been carried out needless to say that they have also to be considered so that the final classification decided is correct and justice is rendered. In view of this, we feel that the Department is not correct when it says that the Chemical Examiner's report should not be considered and the respondents are not correct when they claim that other aspects of manufacture other than application of heat should not be considered. 7.4 In view of the above discussion, for d....