K. Prakash Anand, Member (T)

1. The issue in this matter is the correct classification of "Truity Fruity, a preparation of vegetable and fruits which the respondents claim Is being manufactured by them entirely for further production of end products at their various units. They have stated that the product is not for sale. Mere transfer of the material from their Barari Unit to their other units cannot be regarded as sale, it is stated. Further, it is claimed by the respondents that the containers in which truity fruity is packed are not designed to hold pre-determined quantity of goods.

2. on the other hand, the Assistant Collector, who adjudicated the matter found that truity fruity, which were in fact boiled sweets/fruits, used in the manufacture of bread etc. was saleable in the market, although it was not being sold because the respondents were not manufacturing It in sufficient quantity to meet the demand of other consumers. The Assistant Collector has referred in his order to the definition of sale as contained in Section 2(h) of the Central Excises and Salt Act, 1944, according to which "sale and purchase with their grammatical variations and cognate expressions, mean any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration". It is observed in this connection that the transaction in this case would amount to sale, since the respondents received payment from their sister concerns by book transfer. Furthermore, it was held that the goods are being packed in polythene bags of pre-determined weight of 3 kgs. and these were kept in wooden packages to facilitate transfer and transport. Accordingly, the Assistant Collector decided that truity fruity alongwith various other products categorised as 'others' in the classification list were correctly falling under sub-heading 2001.10-CET.

3. The order of the Assistant Collector was set aside by the learned Collector (Appeals) who held that the respondents were not selling their products in the ordinary course of trade in the open market. Therefore, the goods could not be considered as ordinarily intended for sale. Additionally, it was observed that there was no indication that unit packings were marked, numbered or labelled with description, weight etc. of the material. The teamed Collector (Appeals) therefore, held that the goods could not be considered as "put up in unit containers and ordinarily intended for sale". Accordingly, he set aside the order of the Assistant Collector. It is against this order that the department has come up in appeal before us.

4. We have heard Shri L.C. Chakravarti, JDR for the department and Shri J.M. Ojha, consultant for the respondents.

5. At the outset Shri Ojha raised an objection that the appeal is barred by time. After hearing him we rejected the contention. This is for the reason that the appeal had been received by the Registry on 24.11.1987 and the date of communication of the impugned order is mentioned as 25.8.1987, and, therefore, the appeal had been filed within 3 months period. The contention of Shri Ojha was that the appellate order should have been received on 20.8.1987 and not 25.8.1987. He based this argument on the fact that the endorsement on the impugned order of appeal, regarding attestation and despatch is dated 20.8.1987. It was pointed out to him that the despatch having been on 20.8.1987, it would not be possible to presume that it should have been received on that day itself and there was no reason to disbelieve the endorsement in the appeal about the receipt by the Collector of the impugned order on 25.8.1987.

6. The learned Departmental Representative has submitted that the order of the learned Collector (Appeals) does not appear to be correct in law as the definition of unit container is clearly provided in Note to Section IV of the Central Excise Tariff, which does not prescribe the requirements of labelling