TaxTMI 
TaxTMI 
2004 (12) TMI 203
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....0 of CETA as "Fixed Vegetable Oil". However, the Department has changed the view and proceeded against the appellants for re-classification of the items under CSH 2108.99 of the CETA, as "Dietary Food Supplement". The contention of the appellants is that the items, in the first instance, have resulted only on repacking and encapsulating and it has not resulted into a process of manufacture or bringing into existence new products or goods. The second point was that the item has been rightly classified under Chapter 15, which is an appropriate heading for classifying the items, which are extracted out of plants in the form of oil. The same has been marketed as 'Dietary Food Supplement' in the capsulated form. This view has also been acknowledged by the Commissioner (Appeals) in subsequent proceedings and he has proceeded for classifying the items under Chapter 15. 3. The description of the CSH 2108.99 is "Edible preparations not elsewhere specified or included". It is the contention of the appellants that the Commissioner has not given a detailed reasoning to bring the items under CSH 2108.99 and the items do not satisfy the criteria of Chapter 21. The descriptions of all th....
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....he item does not satisfy the terms of Para 16 of HSN Explanatory Notes and therefore reasoning adopted by the Commissioner is not a correct one and not in terms of Tariff notes and Explanatory Notes of HSN. He submitted that the process of encapsulating has not resulted into a process of manufacture. He submits that the mere fact of the appellants having termed the product as 'Food Supplement' by itself does not attract Chapter 21, as Chapter 21 refers to those type of items which are obtained by processing of cooking, dissolving or boiling in water, milk or other liquids as stated in the Explanatory Notes of HSN. It should be used in the making of beverages or food preparations for human consumption and consisting of mixtures of chemicals (organic acids, calcium salts, etc.) with foodstuffs (flour, sugar, milk powder, etc.). 6. Ld. JCDR pleaded in support of the findings of the Commissioner given in internal Page 16 at sub-para (iii) of the Order, which is reproduced, below - "(iii) Their argument is that when specific entry is there in the tariff there is no need for referring to trade parlance theory, chemical examination, chapter note, interpretation rules and HSN; e....
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....ve seen as to whether the item satisfied the criteria of being "Edible preparations not elsewhere specified or included". Various sub-headings under Chapter 21 deal with items like- (a) Preparation for Lemonades or other Beverages intended for use in the manufacture of Aerated Water. (b) Sharbat (c) Prasad or Prasadam (d) Sterilised or Pasteurised Miltone The item does not fall in any of the above items. As per HSN Explanatory Notes, the item given in Chapter 21 has to be preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.) for human consumption. It has to be preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption and examples mentioned are those of preparations consisting of mixtures of chemicals (organic acids, calcium salts, etc.) with foodstuffs (flour, sugar, milk powder, etc.). Even going to Para 16 of HSN Explanatory Notes at Page 276, which has already been extracted, we do not find the item satisfying the criteria laid down in Chapter 21 or the terms of HSN Explanatory Notes. We find that the Commissioner has not given reaso....
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....wherein Spirulina (algae) powder was held to be a natural product and not being a manufactured produced and held to be not excisable. In the case of Kothari Products Ltd. v. CCE, Kanpur - 2002 (139) E.L.T. 633 (Tri. - Del.), the Tribunal held that repacking of coconut oil from bulk into small packs did not result in a new product having a different name, use or character and hence held that there was no process of manufacture involved in such process of re-packing. The same view was expressed in the case of Ammonia Supply Company v. CCE, New Delhi - 2001 (131) E.L.T. 626 (Tri. - Del.) wherein it was held that filling of liquid ammonia from tankers into smaller cylinders did not amount to a process of manufacture. In the case of Ram Kishore Chemicals Co. Pvt. Ltd. v. CCE, New Delhi - 2002 (145) E.L.T. 106 (Tri. - Del.), it was again held that repacking of Hydrogen Peroxide and Acetic Acid from bulk tankers and carbuoys into small containers and affixing of such containers with labels/stickers of manufacturer's name as well as appellant's own firm's name did not amount to a process of manufacture. The Apex Court, in the case of UOI v. J.G. Glass Industries Ltd. - 1998 (97....