The appellant company went up in appeal against the said order of the Adjudicating Authority to the Commissioner of Customs and Central Excise, Appeals and the same was decided in favour of the appellant company.
On his said finding, the Adjudicating Authority rejected the claim of the appellant company and held that the appellants product had been rightly classified under Chapter Heading 2107.00 and the appellant was liable to pay duty at the appropriate rate specified in the chapter to the Central Excise Tariff Act, 1985.
Appearing for the assesee company, Mr. Soli J. Sorabjee, learned senior advocate, companytended that crushing of betel nuts into smaller pieces and sweetening the same with essential number essential oils, menthol and sweetening agents did number result in the manufacture of a new product and as observed by the Tribunal, the end product remained a betel nut.
Aggrieved by the order of the Commissioner, the Revenue went up in appeal to the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Bangalore for short the Tribunal by way of Appeal No.
After companysidering the submissions made on behalf of the respective parties, the Commissioner came to the companyclusion that the process of cutting betel nuts into small pieces and the addition of essential number essential oils, menthol, sweetening agent etc.
The High Court companyfirmed the view taken by the Tribunal and after taking into companysideration the process involved in companyverting the whole betel nuts into sweetened betel nut pieces, the High Court dismissed the appeal and chose number to interfere with the order passed by the Tribunal.
This appeal has been filed by the assessee company impugning the decision of the High Court dated 15th September, 2005.
The Assistant Collector of Central Excise, Guntur Division, who was the Adjudicating Authority, did number accept the companytention of the appellant upon holding that the product manufactured by the assessee, namely, betel nut powder, was a preparation companytaining betel nut with other permitted ingredients which was a new product companymercially known to the market with distinct name and character.
The appellant went up in appeal before the High Court of Andhra Pradesh under Section 35 B of the Central Excise Act, 1944 against the said order of the Tribunal dated 12th April, 2005.
The Tribunal accordingly allowed the appeal filed by the Revenue and set aside the order passed by the Commissioner on 6th May, 2004.
However, the appellant filed a revised classification declaration under Rule 173B of the Central Excise Rules, 1944, with effect from 17th July, 1997, claiming classification of its product under Chapter Sub heading 0801.00 of the Central Excise Tariff.
It was companytended that the crushing of betel nuts into smaller pieces with the help of machines and passing them through different sizes of sieves to obtain goods of different sizes grades and sweetening the cut pieces did number amount to manufacture in view of the fact that mere crushing of betel nuts into smaller pieces did number bring into existence a different companymodity which had a distinct character of its own.
E.734/2004.
In other words, the betel nut is different from the supari powder.
Arising out of SLP C No.20185/2005 WITH CIVIL APPEAL NO.6659 OF 2005 M S. CRANE BETEL NUT POWDER WORKS Appellant Versus COMMISSIONER OF CUSTOMS CENTRAL EXCISE, TIRUPATHI Respondent ALTAMAS KABIR, J. Leave granted.
The Tribunal took a different view and reversed the order of the Commissioner upon holding that the end product of the process involved in the preparation of the appellants product was different from the original material.
The Tribunal went on to observe as follows When subjecting raw material to process of manufacture, it is number necessary that there should be a sort of transmutation.
The Commissioner accordingly allowed the appeal filed by the appellant herein and set aside the order passed by the Assistant Commissioner of Central Excise, Guntur Division, with companysequential relief to the appellant company.
According to the Tribunal, a new and distinct product known as supari powder had emerged.
The appellant company is engaged in the business of marketing betel nuts in different sizes after processing them by adding essential number essential oils, menthol, sweetening agent etc.
Initially, the appellant cleared the goods under Chapter Sub heading 2107 of the Central Excise Tariff and was paying duty accordingly.
