KARAMCHAND APPLIANCES (P.) LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) Karamchand Appliances Pvt. Ltd., the petitioner herein, a manufacturer of electro thermo appliances used for domestic purposes, had diluted imported insecticides under sub-heading 3808.10 of the Central Excise Tariff Act, 1985, to make them marketable. In this process, solvent, perfume and stabilizing agents etc. were added. The contention of the respondents is that this process amounts to "manufacture" and, therefore, the petitioner was liable to pay duty. The petitioner disputes the aforesaid position and in the writ petition has made a prayer that the show cause notice dated 1st November, 1995 and the circular of the respondents dated 27th July, 1995 should be quashed.

(2.) Normally, we do not interfere when only show cause notice has been issued and no order has been passed, but the petitioner submits that the respondents have issued a notification/circular dated 27th July, 1995 directing the authorities to treat the said process as "manufacture". It is accordingly submitted that in view of the notification/circular dated 27th July, 1995, the adjudicating authority is bound and has to pass an adverse order and nothing survives or is required to be adjudicated. Notification/circular dated 27th July, 1995 has been enclosed as Annexure A to the writ petition.

(3.) The said circular refers to the order of Customs Excise Board Tribunal No. 300/1993 dated 15.9.1993 in the case of Markfed Agro Chemicals v. Collector of Central Excise holding that the process involving dilution would not amount to "manufacture" under section 2(f) of the Central Excises and Salt Act, 1944 and records that the Central Board of Excise and Customs has not accepted the said decision of the Tribunal on merits, though no appeal was preferred as on account of 'low duty effected' and as the judgment relied upon refers to old tariff. Therefore, in exercise of powers conferred under section 37B of the aforesaid Act and for the purposes of ensuring uniformity in classification and practice of assessment of the said goods, the Board has ordered that the addition of chemicals and other ingredients like inert carriers or solvents and also surface active dispersing and stabilizing agents to pesticide chemicals in highly concentrated form would amount to 'manufacture'.