ANDHRA CEMENTS Vs. COMMISSIONER OF CENTRAL EXCISE, VISAKHAPATNAM

JUDGEMENT

(1.) THESE appeals arise from OIA Nos. 54 -56/2004 -C.E., dated 11 -6 -2001. The issue involved in this appeal is as to whether on carrying on the process of grinding, the Granulated Blast Furnace Slag (GBS) would bring into existence a new product viz. Ground Granulated Blast Furnace Slag (GGBS) and whether the same is classifiable under CSH 2618.00 and demands for the period 23 -7 -1996 to 2/2000 is required to be confirmed. The learned Sr. Counsel pointed out to a large number of judgments to point out that the process of grinding will not bring into existence a new product as the character and physical form of the product does not change. A mere physical change cannot be held that new product has come into existence, requiring it to be classified under different heading and for confirmation of demand. The citations relied by them are as follows : -

(2.) THE learned SDR pointed out that the process of crushing of stones into stones of smaller sizes amount to manufacture and the Larger Bench, in the case of Hindustan Construction Co. Ltd. v. CCE, Chandigarh - 1997 (89) E.L.T. 123 (Tribunal) has held in the light of several judgments that such activity would bring into existence new goods. The learned Sr. Counsel submitted that the ratio of this judgment has been set aside by the Apex Court in the case of State of Maharashtra v. Mahalaxmi Stores - 2003 (152) E.L.T. 30 (S.C.) wherein it has been held that the crushing of boulders into smaller size Gitti does not amount to a process of manufacture.

(3.) ON a careful consideration and examination of all the judgments cited by both sides, we find that the activity of mere grinding of GBS to bring into existence GGBS would not amount to a process of manufacture. There is no chemical change nor does it change the character of the slag. The slag remains slag and, therefore, the finding given by the Commissioner, without examining the ratio of 23 judgments cited by the assessee, is not justified and not correct in law. Mere physical change will not bring into existence a different commodity. The change should bring a change in the name and character and use of the commodity as held by the Apex Court in a large number of judgments. The following cases apply to the facts of this case. In the case of Iswar Grinding Mills v. CCE - 2000 (117) E.L.T. 743 (Tribunal) wherein crushing/powdering of tobacco leaves first manually and then with power aided crushing/grinding machine to form tobacco flakes/powder has been held to be not a process of manufacture. Likewise, the judgment of Alchemie Pvt. Ltd. v. CCE - 2000 (117) E.L.T. 745 (Tribunal) wherein it has been held that Concentrate spent liquor/wash containing 4 to 6% caustic soda obtained by concentration of 16 -18% after removing impurities has been held to be not a new product and the process has been held to be not a process of manufacture. In the case of Twenty First Century Pharmaceuticals Pvt. Ltd. v. CCE - 2000 (126) E.L.T. 694 (Tribunal), it has been held that conversion of Spirulina powder into tablet form (Multinal Tabs) does not amount to a process of manufacture. In the present case, there is no change in the character nor in its use and hence the ratio of the judgments cited by the Sr. Counsel would apply to the facts of the case. The impugned order is not correct and legal and hence the same is set aside by allowing the appeal with consequential relief, if any.