DIVYA ENTERPRISES Vs. COMMISSIONER OF CENTRAL EXCISE, HYDERABAD

JUDGEMENT

(1.) BOTH these appeals raise a common question of law and facts and hence they are taken up together for disposal as per law.

(2.) THIS appeal arises from OIA No. 151/2001 -C.E., dated 23 -8 -2001. The Commissioner (Appeals), in para 5 of the impugned order, has noted that the assessees were procuring Fullers Earth lumps, a mineral clay, which is also known as Montmorillanite or Bentonite. The same is crushed in jaw crusher and pulverized in the Pulveriser. This powder is heated to about 200C to 300C in the furnace. Then it is treated with Sulphuric Acid. After screening, it is packed in HDPE bags and cleared. The Fullers Earth Powder, on heating, gets thermally activated and then by adjusting its PH value by the addition of Sulphuric Acid, gets powerful adsorption properties. The assessees were manufacturing various grades of Activated Bleaching Earths viz. Rice Bran Oil, for Cotton Seed Oil, SF, SC -100, SC -60 RB/SPECIAL 999, etc. for the purpose of de -coloursation. The Commissioner (Appeals) has noted that de -colourising agent has to have strong adsorption properties in case of Cotton Seed Oil than that of Soya oil for decolorising them. He has noted that this process carried out by the assessee is a process of manufacture and the product, in view of the changes brought out by several processes carried out by the assessee, would go out of Chapter 25 and in the end it would be classifiable under CH 38.02 as Activated Bleaching Earth. The Commissioner (Appeals) has relied on the HSN Notes and also the material evidence in the matter.

(3.) THE learned Counsel submits that there is no process of manufacture. The item remains as such even after the processes carried out by them and it has to be classified only under CH 25.02. He submits that the Tribunal ruling, holding similar activity as a process of manufacture and that it goes out of Chapter 25 and gets classified under Chapter 38.02 as rendered in the case of Manek Chemicals Pvt. Ltd. v. CCE, Ahmedabad - 2002 (145) E.L.T. 335 (Tri. -Del.), is clearly distinguishable. He has filed detailed written submission and argued vehemently for taking a different view. Alternatively, he also prayed for referring the matter to a Larger Bench so that a different view is taken in so far as the assessees case is concerned.