TaxTMI 
TaxTMI 
TaxTMI 
2005 (4) TMI 136
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....itially they were clearing the goods under Chapter Sub-heading 2107.00 of the Central Excise Tariff and were paying duty. They were also availing Cenvat credit in respect of the various inputs. However, they filed revised classification declaration under Rule 173B of the erstwhile Central Excise Rules, 1944 with effect from 17-7-1997 claiming the classification of the products under Chapter Sub-heading 0801.00 of the Central Excise Tariff. They contended that the crushing of betel-nuts into smaller pieces by machines and passing them through different sizes of sieves to obtain goods of different sizes/grades and sweetening the cut pieces does not amount to manufacture. Mere crushing of betel-nut into small pieces does not bring into existen....
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....ant Commissioner is therefore, not tenable and is liable to be set aside." The Revenue strongly challenged the findings of the Commissioner (Appeals). 3. Shri Ashok Haranahalli, learned Advocate appeared for the Revenue, appellant in this case, and Shri M. Chandrasekharan, Sr. Advocate & Shri V. J. Sankaram, Advocate appeared for the respondents. 4. The learned Advocate for the Revenue urged the following points :- (1) The learned Advocate drew our attention to Chapter Note 4 of Chapter 21 which reads as under - "4. In this Chapter "Betel-nut powder known as supari" means any preparation containing betel-nuts but not containing any one or more of the following ingredients, namely lime, katha (catechu) and tobacco, whether or not cont....
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....es India - 2004 (174) E.L.T. 7 (S.C.) (ii) Kedia Agglomerated Marbles Ltd. - 2003 (152) E.L.T. 22 (S.C.) (iii) Brakes India Ltd. - 1998 (101) E.L.T. 241 (S.C.) (iv) Empire Industries Ltd. - 1985 (20) E.L.T. 179 (S.C.) (v) Sree Baidyanath Ayurved Bhavan Ltd. - 1996 (83) E.L.T. 492 (S.C.) (vi) Sree Ramakrishna Soapnut Works - 2004 (167) E.L.T. A175 (S.C.) (vii) Sree Ramakrishna Soapnut Works - 2004 (164) E.L.T. 238 (Kar.) (viii) Karnataka Soapnut Powder Mfrs. Association - 1999 (111) E.L.T. 27 (Kar); 2000 (118) E.L.T. A156 (S.C.) (ix) Kothari Chemicals - 1996 (86) E.L.T. 209 (All.) (x) S.N.Sunderson (Minerals) Ltd. - 1995 (75) E.L.T. 273 (M.P.) (xi) SKB Dry Fruits Marketing Co. Pvt. Ltd. - 2003 (151) E.L.T. 424 (Tri.-Del.)....
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...., no new product emerged when betel-nuts were cut into small pieces and certain other ingredients were added to it and the character and use of the raw material remained the same. The change in the raw material i.e. betel-nut into betel-nut powder/betel-nut pieces/supari was not such a transformation to term it manufacture, in view of the characteristics of the raw material remaining the same, even after such processing. Though the goods may find a mention in the tariff, in order to be subjected to levy of excise duty, the goods should have resulted from "manufacture" as was held by the Apex Court in the cases cited supra. It was categorically held by the Constitution Bench of the Honourable Apex Court in the case of Union of India & Anr. v....
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....etel-nut'. It may remain so but when other ingredients added to it how can we say these processes do not bring into existence a new and distinct commodity? If we ask for betel-nut, the shopkeeper will not give supari powder. In other words, the betel-nut is different from the supari powder. We cannot disregard Note 4 of Chapter 21. Moreover a plethora of case laws relied on by the learned Advocate appearing for the Revenue are entirely in Revenue's favour. The Tribunal in the case of National Starch Products (P) Ltd [1996 (86) E.L.T. 665 (Tri.)] held that conversion of tamarind seed into tamarind seed powder is a process of manufacture. The Tribunal in the case of Eagles Chicory (Firm) [2000 (126) E.L.T. 908 (Tri.)] has held that th....