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CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL, MADRAS
S.L. PEERAN, V.K. Asthana, JJ.
Twenty First Century Pharmaceuticals (P.) Ltd. -Appellant
Versus
Commissioner of Central Excise, Chennai -Respondent
Final Order No. 239/2000 Appeal No. E/1238/98, 239 of 2000, 1238 of 1998
Decided On : 09-02-2000
Per V.K. Ashtana : This is an appeal against the Order-in-Appeal No. 124/98 dt. 31-3-1998 passed by the Commissioner (Appeals) wherein the question of excisability and classification of "Multinal Tablets" was considered and the Order-in-Original was upheld, which had classified the product under heading 3003.10. However, while the excisability of the product was upheld, the Order-in-Appeal changed the classification from Chapter 30 to 21. It also reduced the penalty from Rs.5,000/- to Rs. 2,000/- but held the product to be dutiable.
2. Heard Sri N. Venkatraman, learned advocate for the appellants, who submits as follows:-
(a) The appellants received vacuum dried spirulina powder for conversion into saleable retail packs of the powder as well as into converting the same as tablets. As far as the packing of the item received in the same form as powder is concerned, the department has not raised any dispute or demand. Therefore, the dispute is limited to the question whether the conversion of spirulina powder received by them into tablets which are packed by the name of "Multinal" amounts to manufacture and whether the said product would fall under Chapter 21, as the Order-in-Appeal impugned has not given any further sub-classification?
(b) The learned advocate submits that the conversion of spirulina powder into tablets would not constitute manufacture, as the end product is merely spirulina in tablet form.
(c) The technology involved in tableting the powder necessarily requires the addition of certain chemicals which perform three main functions:-
(i) Diluents - to increase the bulk so that when the powder is converted into tablet, the required weight of spirulina is contained in it.
(ii) Preservatives - to ensure that spirulina in tablet form does not get contaminated by Oxidation etc. and is therefore, fit for human consumption.
(iii) Binders and Lubricants which are necessary for the formation of tablets in the tableting machine.
The learned advocate submits that as far as the diluents are concerned, the need to dilute certain substances has been recognised in various industries and as per the decision of the Tribunal in the case of Jayu Products v. CCE as reported in 1994 (4) RLT 850 (CEGAT)=1994 (74) ELT 158 (T), it has been held that dilution of ultra marine blue with addition of China clay and water does not amount to manufacture. He, further, submits that as far as the use of solvents is concerned, it has been held in CCE v. Berger Paints as reported in 1998 (24) RLT 415 (CEGAT)=1998 (104) ELT 642 (T) that mere addition of solvents does not amount to manufacture, there being no change in the character of the product. Thirdly, the learned advocate submits that addition of preservatives also does not amount to manufacture as is held in the decision of the Tribunal in the case of Jayu Products (supra), wherein acid dyes were added to preserve parity and shade of ultra marine blue.
As far as the addition of binders is concerned, the learned advocate submits that in a recent decision the Tribunal has considered this very issue with respect to the similar spirulina powder in the decision of Sanat Products Ltd. v. CCE as reported in 2000 (115) ELT 163 (T), wherein it was held that mixing the binder to the dried and powdered spirulina to facilitate easy filling into capsules does not alter the character of natural product and that the same product is not classifiable under sub-heading 21.08 of the Central Excise Tariff Act. The learned advocated further submits that even the change in form from powder to tablet could not constitute manufacture as has been held by the Hon'ble Madras High Court in the case of Coromondal Prodora v. GOI
(d) Finally, the learned advocate submits that any process to constitute manufacture under section 2(f)
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