NEPC AGRO FOODS LTD. Vs. CCE, COIMBATORE

JUDGEMENT

(1.) In this appeal filed by M/s NEPC Agro Foods Ltd., (hereinafter referred to as 'NEPC'), the matter relates to the duty liability in respect of the mineral water, which was marketed under the brand name 'Trupthi'. The period involved is prior to 16.3.95. NEPC had claimed that no process of manufacture was involved in the production of mineral water and that the mineral water 'Trupati' was non -excisable prior to 16.3.95 when by virtue of insertion of Chapter Note 2 in Chapter 22 of the Central Excise Tariff, the process was deemed to be the process of manufacture. The Revenue had sought to classify the product in question under sub -heading No. 2201.90 of the Central Excise Tariff. In the show cause notice dated 27.11.95, extended period of limitation was invoked for demanding central excise duty of Rs. 58,235/ -, and for levying penalty. The Commissioner of Central Excise, Coimbatore, who adjudicated the matter, after discussing the various submissions made by NEPC, confirmed the demand of Rs. 58,235/ -. No penalty was however imposed.

(2.) The matter was heard on 19.01.2001 when Shri J. Shankerraman, Advocate appearing for NEPC submitted that prior to 16.3.95 when Chapter Note 2 was inserted in Chapter 22 of the Central Excise Tariff, the mineral water as manufactured by NEPC was not excisable. He also submitted that the appellants had not collected any central excise duty from their customers and if excise duty is found leviable then their sale price should be considered as cum -duty price for the purpose of determination of the assessable value and the quantum of duty payable by them. He relied upon the Tribunal's Larger Bench decision in the case of Srichakra Tyres Ltd. and Ors. Vs. Collector of Central Excise, Madras - 1999 (32) RLT 1 (Tribunal - LARGER BENCH), wherein it had been held that the excise duty held payable subsequently was to be abated from total sale price realisation by treating it as cum -duty price for the purpose of determination of assessable value and quantum of duty demand payable. He also prayed that the benefit of modvat credit should also be extended to them. In support of his contention that no process of manufacture was involved in the purification and production of mineral water, ld. Advocate referred to the following decisions: -

(3.) We have carefully considered the matter. The issue for our consideration in this appeal filed by NEPC is whether the mineral water as produced by NEPC was liable to pay duty on clearances prior to 16.3.95. From 16.3.95 onwards, there is no disputes and it is an admitted position that the packed, filtered and purified mineral water as produced by NEPC was excisable and dutiable in view of the insertion of Note 2 in Chapter 22 of the Central Excise Tariff, by the Finance Bill of 1995. In fact after 16.3.95, NEPC were paying full rate of central excise duty of 10% Adv. on the mineral water was marketed under the appellant Company's national brand name of 'Trupati'. They had three plants for producing mineral waters in different parts of the country. The demand of central excise duty in these proceedings is for the period prior to 16.3.95, from 17.12.94 to 15.03.95, under show cause notice dated 27.11.95.