Per V.K. Agrawal:

The issue involved in this appeal, filed by M/s. Seth Liladhar Biyani & Sons is whether the process of purification undertaken by them amounts to manufacture and whether refined saltpetre is classifiable under Heading 25.05 of the Schedule to the Central Excise Tariff Act, as alternatively claimed by the Appellant or under Heading28.34, as upheld by the Commissioner(Appeals) under the impugned Order.

2. Shri V. Lakshmi Kumaran, ld. Advocate, submitted that the Appellants obtain saltpetre from mines which contains 89% Potassium Nitrate and impurities including other salts; that the mined material is dissolved in water at 100°C when potassium nitrate dissolves fully giving rise to a saturated solution thereof which is removed to a wooden tank and left to evaporate when saltpetre containing 94% Potassium Nitrate settles as white crystals; that thus the Appellant is engaged in the purification of saltpetre by the Crystallisation process carried out on the saltpetre obtained by mining; that the process of purification does not amount to manufacture and the product remains saltpetre after the purification process; that the fact that excavated saltpetre is not used directly without purification for fire works does not mean that the two are different goods having different uses; that the Potassium Nitrate is the ingredient in the saltpetre which makes it a suitable material for fireworks and Potassium Nitrate to the extent of 89% is present even in the naturally occurring saltpetre; that purification makes the material more suitable for fireworks but it does not mean that the mined saltpetre does not have the required properties; that purification done by way of distillation/recrystallisation does not amount to manufacture as no new Chemical commodities come into existence as held by the Tribunal in S.D. Fine Chem (Pvt.) Ltd. Vs. CCE 1996 (12) RLT 121=1997 (91) ELT 610 (T); that the appeal filed by the Revenue was dismissed by the Supreme Court on 20.11.95 in C.A. No. 2532/92.

3. The Learned Counsel, further, submitted, that in Section 6 (a) of the Central Excise Act, saltpetre is specifically referred to separate from goods specified in the Schedule to the Central Excise Tariff Act which clearly points to saltpetre not being covered in the Tariff since, had it been so, there was no necessity to mention it separately; that amendment of Section 6 in 1992 by which the words 'or of saltpetre or of any specified component parts or ingredients of such goods, or of specified containers of such goods" were deleted does not make any different; that if saltpetre was a specified goods included in the schedule, it would not have been separately mentioned; that this shows that saltpetre is not excisable and as there is no change in the Schedule from 1992, the position has not been altered; that Notification No, 62/ 57 dated 27.7.1957 was issued by the Government providing that no licence shall be required for the manufacture and refining of saltpetre; that Section 3 of the Central Excise Actprovides for levy and collection of duties on excisable goods at the rates set forth in the Schedule to the Central Excise Tariff Act and as the impugned goods is not covered by the said schedule, excise duty cannot be levied and collected; that by Finance Act, 1996, Salt has been removed from the Act as it is now called only "Central Excise Act" instead of "Central Excises & Salt Act;" that saltpetre by name is not mentioned in the Central Excise Tariff and as such is not chargeable to duty. The Ld. Counsel also mentioned that the finding in the impugned Order that the refined saltpetre goes out of the purview of Chapter 25 in view of Note 2 to Chapter 25 and further it gets included in Chapter 28 on account of Note 1 (a) of that Chapter is erroneous; that Note 1 (a) to Chapter 28 does not have the effect of taking in a non-manufactured mineral product; that Heading 2 8.3 4 covers nitrates but nitrates which are manufactured in the Central