TaxTMI 
TaxTMI 
2024 (11) TMI 664
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....Cr. during every financial year. Besides manufacturing of said goods, the Appellant was also doing trading of dry dates/ chhuhara. The Appellant used to buy dry dates/ chhuhara from open market and sold them after undertaking the following processes on such goods:- i. Washing----- Washing from water for dust removal, ii. Pressing -------- For breaking dry dates for removal of seeds, iii. Deseeding------- Remove seeds from dry dates, iv. Cutting----------- Cut dry dates in to small pieces, v. Dehydration------ Cut dry dates are subjected to oven drying for removal of moisture, vi. Sieving---------- To get only requisite size of cut dates for final sale, vii. Packing & Despatch -------- Packing in 25 Kg and 50 Kg bags. 2.1 There was no change in the properties of the end-product different from dry dates. Only physical appearance was changed. The end products were sold as "dry dates cut" or "dry dates chura" to manufacturers of mouth fresheners. As dry dates remained the same after above processes, having same characteristics, qualities and name, the sale of the said goods was treated as trading of dry dates and no exci....
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....ng with interest and penalty. 2.5 The allegations stated in the show cause notices can be summarized as below:- i. Dry dates were not traded as such but after undertaking above processes, ii. End product was classifiable under SH 20089999 of the Central Excise Tariff, iii. Processes undertaken by the Appellant on dry dates would amount to manufacture, and iv. As per chapter Note-7 0f chapter 20, labeling or relabeling, repacking from bulk to retail packing or adoption of any other treatment to render the product marketable to the consumer would amount to manufacture even if processes undertaken did not amount to manufacture. 2.6 Both the show cause notices were adjudicated by the Joint Commissioner Central Excise Noida-I by a common order, OIO No.53-54/JC/NOIDA-I/2016-17 dated 31.03.2017 whereby the whole demand of excise duty was confirmed with equal penalty and interest. The Appellant filed appeal with the Commissioner (Appeals), CGST, Noida who upheld the OIO and dismissed the appeal of the Appellant vide OIA No.NOI-EXCUS-001-APPL-1951- 17-18 dated 27.03.2018. 2.7 Hence, the present appeal before the Tribunal. 3. Shri A. P. Singh, ....
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....ings of the headings/sub- headings as mentioned in the tariff. However, where the goods, in question, are capable of being called by more than one name, the classification is to be done with reference to the most appropriate name and for this purpose, the basic functional/character/use would become more relevant. It is submitted that cut dry dates provides the essential character to the dry dates as the same provides the nutrition, aroma, consistency, mouth feel and appearance of dry dates. It is further submitted that cut dry dates/ chura dry dates are marketed and consumed in the open market as dry dates. Thus, cut dry dates form the essential character of dry dates, the same are classifiable as dry dates under Chapter heading 08041090. He places reliance on the following decisions:- i. Collector of Central Excise vs. Fusebase Eltoto Ltd. [1993 (67) E.L.T. 30 (SC)]; ii. Indian Cable Co. Ltd. Vs. Collector of Central Excise, Calcutta [1994 (74) E.L.T. 22 (SC)]; iii. Metagraphs Pvt. Ltd. Vs. Collector of Central Excise, Bombay [1996 (88) E.L.T. 630 (SC)]; iv. United Copiex (India) Pvt. Ltd. vs. Commissioner of Sales Tax [1997 (94) E.L.T. 28 (SC)]....
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....ble elsewhere. He emphasizes that as dry dates in all forms find entry in Chapter 8 of the Central Excise Tariff, it would not be classifiable under SH 2008. He stated that when the item does not fall under Chapter 20, there is no applicability of Chapter Note-7 of Chapter 20 which specifies as:- "7. In relation to products of this Chapter, labelling or re- labelling of containers or repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to "manufacture"." He urged that the above provisions were not applicable when end products were not of Chapter 20. 3.4 The Learned Counsel stated that in the SCN, it was alleged that processes undertaken by the Appellant enhanced the value of goods many times, hence, such "processes" amounted to manufacture. In this context he contended that value addition was no principle to consider processes as manufacture. There was statutory definition of term "manufacture" under Section 2(f) of the Central Excise Act, 1944. He submitted that only those processes which are within ambit of Section 2(f) would be treated as amount to manufacture. He also refer....
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....the end product is processed dry dates different from dry dates and is classifiable under Sub-heading 20089999 of the Central Excise Tariff as prepared fruit. In the impugned Order-in-Appeal, the Commissioner (Appeals) has given his observation on the said issue as under:- "Cut dry dates so manufactured are hardly recognizable as raw dates or dates unless being specifically pointed out as these have lost original physical appearance. ......" The above findings for classification of end product under chapter heading 2008 in place of 0804 are only based on imaginary narrative without support of any legal provisions. Physical appearance of a commodity does not decide its classification. The classification of an item in the Central Excise Tariff is regulated in accordance with the principles enunciated in General Rules for Interpretation (GIR). Rule 1 of GIR provides that classification shall be determined according to the terms of the headings and any relative Sections or Chapter Notes. If the goods to be classified are covered by the words in a heading and the Section and Chapter Notes do not exclude classification in that heading, the heading applies. A heading that is w....
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.... --- Soft (khayzur or wet dates) 08041030 --- Hard (Chhohara or Kharek) 08041090 ---- Other Applying principle of rule 1 of GIR, all type of dates is covered under heading 0804. As per Chapter note 3, even partially rehydrated or treated with certain other process would not change the classification. It is observed that after processes as given above, end product namely dry date cut or dry date chura remains dry date as its essential character is not lost. In Chapter note, it is clearly mentioned that even moderate heat treatment would not change the classification of the product namely dry date. In the sequence of processes undertaken by the Appellant, deseeded dates are subjected to moderate heating just to remove moisture. In view of the said note, classification cannot be altered on such heat treatment. It is also found that deseeded dates merit classification under Chapter heading 0804 as may be verified from import data available at zauba.com. It shows that up to the stage of de-seeding, dates are classifiable under chapter heading 0804 and thereafter only process of cutting, moderate heating and sieving are done which obviously do not change its essentia....
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.... SUGAR OR OTHER SWEETENING MATTER OR SPIRIT, NOT ELSEWHERE SPECIFIED OR INCLUDED - Nuts, ground-nuts and other seeds, whether or not mixed together : 2008 11 00 --- Ground-nuts kg. 6% 2008 19 --- Other, including mixtures: 2008 19 10 --- Cashew nut, roasted, salted or roasted kg. 6% and salted 2008 19 20 --- Other roasted nuts and seeds kg. 6% 2008 19 30 --- Other nuts, otherwise prepared or preserved kg. 6% 2008 19 40 --- Other roasted and fried vegetable products kg. 6% 2008 19 90 --- Other kg. 6% 2008 20 00 --- Pineapples kg. 6% 2008 30 --- Citrus fruit: 2008 30 10 --- Orange kg. 6% 2008 30 90 --- Other kg. 6% 2008 40 00 --- Pears kg. 6% 2008 50 00 --- Apricots kg. 6% 2008 60 00 --- Cherries kg. 6% 2008 70 00 --- Peaches, including nectarines kg. 6% 2008 80 00 --- Strawberrieskg. 6% -Other, including mixtures other than those of sub-heading 2008 19 : 2008 91 00 -- Palm heartskg. 6% 2008 93 00 --- Cranberries (Vaccinium macrocarpon, kg. 6% Vaccinium Oxycoccos Vaccinium vitis-idaea) 200....
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....mmediate consumption in that state, they may be provisionally preserved (e.g., by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions). The term ''chilled" means that the temperature of a product has been reduced, generally to around 0°C, without the product being frozen. However, some products, such as melons and certain citrus fruit, may be considered to be chilled when their temperature has been reduced to and maintained at + 10 °C. The expression "frozen" means that the product has been cooled to below the product's freezing point until it is frozen throughout. Fruit and nuts of this Chapter may be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled. 5.3 The processes mentioned in Chapter 8 include chilling, steaming, boiling, drying and provisionally preserving. It shows that even after drying the product of Chapter 8, the classification would not be changed. It may further be seen that General Note of HSN Chapter Note 20 specifies as:- "Heading 2008 covers fruit, nuts and other edible parts of plants, whether whole, in pieces or crushed, including mixtures thereof, prepared or pres....
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....aterial (Dates in natural form) . Cut dry dates so manufactured are hardly recognisable as raw material." The Commissioner (Appeals) has treated the end product as new product only on the ground that it was different from raw dry date and it could not be recognized as dry dates. With a view to understand what process amounts to manufacture under Central Excise, we refer the provision of section 2(f) of the Central Excise Act, 1944 (CEA) which defines "manufacture" as: "manufacture" includes any process: (i) incidental or ancillary to the completion of a manufactured product; (ii) which is specified in relation to any goods in the Section or Chapter notes of the First Schedule to the Central Excise Tariff Act, 1985, as amounting to manufacture. The statutory definition would indicate that "manufacture" under Central Excise has to be construed in two ways: (A) "general concept" of manufacture: (B) "deemed concept" of manufacture. General concept- It has been held by the Hon"ble Supreme Court in the case of UOI vs. Delhi Cloth and General Mills Co. Ltd. [1977 (1) E.L.T. J 199 (SC)] that an activity or process, in order to amount to manufacture must lead t....
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.... on account of the cited process, no manufacturing therefore took place. In view of the above we hold that processes undertaken by the appellant do not amount to manufacture and as such not dutiable. 8. As regards "Deemed" concept of manufacture- Section 2(f) (ii) of CEA, provides for concept of deemed manufacture. If an activity, in relation to specified goods, is specified as amounting to manufacturing activity in the relevant Chapter Notes/Section Notes of CETA, then such activity would amount to manufacture and the resultant products would attract levy of excise duty. Normally, an activity of repacking from a bulk pack to smaller packs would not amount to manufacture under the general concept. However, in respect of goods of some Chapters, such an activity is specified as amounting to manufacture by way of a Chapter note. The Commissioner (Appeals) has observed that dry dates are subjected to the process of cutting dry dates after washing & drying are classifiable to SH20089999 of the Central Excise Tariff. He further observed that the process of cutting dry dates after washing and drying changed them in to a product that was ready for consumption and certainly marketable to....