SURYA FINE CHEMICALS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE chronology of events submitted by learned counsel in the paper book today shows that the appellant was all along under bonafide belief that due to dispute of M/s. Roha Dychem before various forums food colour preparation shall fall under Chapter 21 while Revenue was claiming classification under Chapter 32 of Central Excise Tariff Act, 1985. But M/s. Roha Dychem was successful before Apex Court holding that goods in question shall be classifiable under Chapter 21 of CETA, 1985. Learned counsel further submits that appellant was given an impression by M/s. International Flavours and Fragrance India Ltd. for whom appellant was job working similar goods, that the goods manufactured on job work shall fall under Chapter 32 of the Central Excise Tariff Act, 1985. Such confusion in the industry prevented appellant to seek registration under Central Excise Act, 1944 even though it was manufacturing food colour preparations both as a manufacturer as well as job worker.

(2.) TO resolve the controversy, legislature intended that insertion of Chapter Note 7 to Chapter 21 to CETA, 1985 with effect from 16th March, 1995 was necessary. But that note related to labeling and relabelling and any other process amounting to manufacture. Learned counsel says that even carrying out any other process was legislated as manufacturing activity for the first time on 16th March, 1995 by Chapter Note 7 of Chapter 21. Therefore, the appellant was all along under bona fide belief that its activities shall not amount to manufacture and not liable to duty and no registration under Central Excise Act, 1944 is warranted.

(3.) THERE was no malafide on the part of the appellant to suppress any fact to the Department when it was all along submitting classification list to the Department for the impugned period. It was well within the knowledge of both sides about the classification sought by the appellant under bonafide belief on the factual scenario aforesaid. No doubt the goods ultimately is held to fall under Chapter 21 of CETA, 1985 but industry had conflict of opinion on classification of the goods in question. Therefore, the appellant may be given benefit of doubt holding that under aforesaid circumstances adjudication is time -barred.