NESTLE INDIA LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The issue involved in this Appeal, filed by M/s. Nestle India Ltd. is regarding dutiability of inter -mixture of vitamins.

(2.) Shri V. Lakshmikumaran, learned Advocate, submitted that the Appellants manufacture infant foods chargeable to Nil rate of Central Excise duty; that for the purpose of manufacture of the infant foods, they buy various vitamins like vitamin A, Vitamin D, Vitamin E, etc. on payment of duty from the manufactures of vitamin; that depending upon the requirement of the particular vitamin content to be present in the finished product, the various vitamins are mixed in a pre -determined ratio with the help of electro mechanical devices by effecting a uniform dispersion of liquid, semi solid or solid ingredients of a mixture by means of mechanical agitation; that after mixing the vitamins, the item so obtained, which is called inter mixture of vitamins, is stored in plastic drums/aluminium bottles; that in order to identify the particular inter -mixture of vitamins which has to be used in the particular grade of finished product, a sticker is affixed on the drum giving the details regarding the content of the drum and are thereafter used in the manufacture of infant goods; that they do not sell any part of these inter mixtures of vitamins to any body and they have never cleared the same outsider the factory as these inter -mixture of vitamins are not saleable in the market as such it is of no use to any other infant food manufacturer whatsoever; that the Adjudicating Authority, under the impugned Order, has held that the process of mixing the various vitamins and the making of inter -mixture of vitamins amounts to manufacture within the meaning of Note 11 to Chapter 29 of the Schedule to the Central Excise Tariff Act on the ground that the process of mixing the vitamins would come under the category of "adopting of any other treatment to render the product marketable to the consumer".

(3.) The learned Counsel, further, submitted that as the Note 11 to Chapter 29 was introduced only with effect from 1.3.1997, the demand of duty prior to 1.3.1997 can not be confirmed against them; that the only case made out in the show cause notices is that they were affixing labels on the containers containing the inter -mixture of vitamins which would amount to labeling within the meaning of Note 11 and consequently the said process would amount to manufacture; that they had pointed out, in their reply, as to how the tying of a label which contains certain details like date of process, batch No., gross weight, net weight, etc. would not amount to labeling within the meaning of Note 11; that the Adjudicating Authority had not adverted to their submissions and she had totally given up the case made out in the show cause notice; that once having given up the case made out in the show cause notice, the impugned Order ought to have discharged the show cause notice; that the Commissioner has sought to sustain the duty demand by contending that the activity is covered within the last portion of Note 11 viz. "adoption of any other treatment to render the product marketable to the consumer." which is beyond the show cause notice. He also contended that the process undertaken by them can not come under the category of "adoption of any other treatment to render the product marketable to the consumer"; that the crucial requirement for the application of this portion of Note 11 is that but for the adoption of that treatment, the product should not be marketable to the consumer; that in other words, prior to the adoption of that treatment, the product should be in a non -marketable state; that if the product is otherwise marketable even without that treatment, the treatment can not amount to "adoption of any other treatment to render the product marketable"; that in the present case, the vitamins are otherwise marketable, question of Appellants doing any operation on them to make them marketable to the consumer jut can not arise; that thus the crucial requirement for the applicability of last portion of Note 11 is not satisfied and they activity can not be learned to amount to manufacture. He relied upon the decision in the case of Lakme Lever Ltd. Vs. CCE, Mumbai III, 2001 (127) ELT 790 (T) wherein it has been held that the process to fall within the clause must be one which confers upon the product the attributes of marketability which it did not possess earlier and if the product was already marketable, any amount of treatment to enhance its marketability, or impart more value addition to it would not amount to manufacture. Reliance has also been placed on the following decisions : - (i) CCE, Indore Vs. Pure Pharma Ltd. 2002 (143) ELT 386 (T) (ii) Ranbaxy Laboratories Ltd. Vs. CCE, Chandigarh, Final Order No. A/374/2003 NB(C) dated 9.7.2003.