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1988 Supreme(HP) 66
High Court Of Himachal Pradesh
SABYASACHI MUKHARJI,S.RANGANATHAN
COLLECTOR OF CENTRAL EXCISE, BOMBAY-I - Appellant
Versus
PARLE EXPORTS (P) LTD. - Respondent
Civil Appeal Nos. 379 of 1988, and 3680-82 of 1987
Decided On : 11/22/1988
Mr. Kuldeep Singh Additional Solicitor General, Mr. A. K. Srivastava and Mr. P. Parmeswaran and Mrs. Sushma Suri, Advocates with him, for Appellants:Mr. Soli J. Sorabjee, Sr. Advocate, Mr. S. Ganesh, Mr. J. R. Gagrat, Mr. P. G. Gokhale, Mr. B. R. Agarwala and Mr. C. M. Mehta, Advocates with him for respondent,
Non-alcoholic beverage bases are not food products or food preparations covered by the exemption notification No. 55/75 C.E. of 1st March, 1975.
Headnote:
CENTRAL EXCISE - EXEMPTION - NOTIFICATION NO. 55/75 C.E. DATED 1ST MARCH, 1975 - NON-ALCOHOLIC BEVERAGE BASES - WHETHER EXEMPTED FROM PAYMENT OF DUTY - HELD, NO - NON-ALCOHOLIC BEVERAGE BASES ARE NOT FOOD PRODUCTS OR FOOD PREPARATIONS COVERED BY THE EXEMPTION NOTIFICATION NO. 55/75 C.E. OF 1ST MARCH, 1975.
Fact of the Case:
The respondent-company manufactured non-alcoholic beverage bases without holding proper Central Excise licence and cleared the said goods without payment of the duty due thereon. Notices were issued by the relevant officer asking the respondent-company to show cause for recovery of the dues and also for imposition of penalty. The Collector, Central Excise, confirmed the demand of central excise duty and imposed a penalty. Aggrieved thereby, the respondent-company filed an appeal before the Tribunal and contended that the question of the dutiability of non-alcoholic beverage bases manufactured by the respondent had been settled by the Tribunal in its decision in the case of respondent itself i.e., Parle Exports (P) Ltd. v. Collector of Central Excise, Baroda, (1987) 27 ELT 349. The Tribunal following its earlier order allowed the appeal and hence the present appeal by the Revenue.
Finding of the Court:
The Court held that non-alcoholic beverage bases are not food products or food preparations covered by the exemption notification No. 55/75 C.E. of 1st March, 1975. The Court observed that the expression "food products" is not defined in the Act and the exemption includes food and food preparations and provides an inclusive definition of food products and ‘food preparations. But the correct and appropriate meaning of the expressions covered in the said notification has to be found out.
Issues: Whether non-alcoholic beverage bases are food products or food preparations covered by the exemption notification No. 55/75 C.E. of 1st March, 1975.
Ratio Decidendi: The Court interpreted the expression "food products" and ‘food preparations’ in the context of the Act and notification and held that non-alcoholic beverage bases are not food products or food preparations. The Court considered the purpose of exemption, the language used in the notification, the commercial parlance, and the intention of the law-maker. The Court also referred to the decisions of various courts and the Government of India's interpretation of the matter.
Final Decision: The appeals were allowed and the decision of the Tribunal was reversed. The Court, however, did not go into the question of penalty and limitation which were left open by the Tribunal.
Sabyasachi Mukharji, J.—These appeals are under section 35-L (b) of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act’) against the decision of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi (Tribunal for short) dated 26th October, 1987.
2. The respondent-company has its factory at Chakala, Andheri and is engaged in the manufacture of non-alcoholic beverage bases falling under Tariff Item 68 of Central Excise Tariff. During the course of enquiry, it was found that the company had during the period from 1st March, 1975 to 18th April, 1979 manufactured non-alcoholic beverage bases without holding proper Central Excise licence and had cleared the said goods without payment of the duty due thereon and had thereby evaded the duty amounting to Rs. 3,50,963.22. According to the revenue, prima facie it appeared that the respondent had contravened the provisions of Rules 9 (1), 53, 173 pp (1), 173 pp (3), 173 pp (6) and 174 of the Central Excise Rules, 1944 (Rules for short) inasmuch as during the period from 1st March, 1975 to 18th April, 1979 the respondent company had manufactured without valid licences required under section 6 of the Act read with Rule 174 of the Rules, goods not elsewhere specified and falling under Tariff Item 68 of the First Schedule of the Act, viz., non-alcoholic beverage bases. The respondent-company had further cleared the said goods without filing list of goods manufactured as required by Rule 173 pp (3) of the Rules. The respondent bad cleared the said goods without preparing gate passes as required under Rule 173 pp (6) of the Rules, and had further cleared the said goods without maintaining accounts as required under Rule 53 of the Rules. In the circumstances, notices were issued by the relevant officer asking the respondent-company to show cause for recovery of the dues and also for imposition of penalty. When the matter came up for consideration before the Collector, Central Excise, he found that non-alcoholic beverage bases were not themselves food or food products and accordingly did not qualify for exemption under Notification No. 55/75 as amended. He accordingly confirmed the demand of central excise duty of Rs. 3,50,963.22 under Rule 9 (2) read with Rule 10 of the Rules. He also imposed a penalty of Rs. 25,000 under Rule 1730 of the Rules. Aggrieved thereby, the respondent-company filed an appeal before the Tribunal and contended that the question of the dutiability of non-alcoholic beverage bases manufactured by the respondent had been settled by the Tribunal in its decision in the case of respondent itself i.e., Parle Exports (P) Ltd. v. Collector of Central Excise, Baroda, (1987) 27 ELT 349, which are the subject-matter of the connected appeals, i e. C A. Nos. 3680-82 of 1987. The Tribunal following its earlier order allowed the appeal and hence the present appeal by the Revenue.
3. The First Schedule of the Act which provides for the dutiability and the rates of duty applicable to various goods mentioned therein contains the expressions "Food and Beverages". It provides therein description of various types of goods and the rates of duties applicable thereto. In the said description "Food and Beverages" many items are included, viz., sugar produced in a factory ordinarily using power in the course of production of sugar, item (1 A) confectionary, cocoa powder and chocolates, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power, namely, boiled sweets, tofees, caramels, candies, nuts (including almonds) and fruit kernels coated with sweatening agent, and chewing gums, cocoa powder, drinking chocolates etc. It also includes items (IB) prepared or preserved food put up-in unit containers and ordinarily intended for sale, including preparations of vegetables, fruit, milk, cereals, etc., and as item 1 (C) food products, in or in relation to the manufacture of which any process is ordinarily carried
