TRISHUL FOOD COLOURS Vs. CCE

JUDGEMENT

(1.) THIS appeal arises from the order -in -original No. 120 of 1990 dt. 27.2.1991, passed by the Additional Collector of Central Excise, Bombay. By this order, he has confirmed the duty demand of Rs. 98,420.91 under proviso to Section 11A of the Central Excises and Salt Act, 1944 and has also imposed a penalty of Rs. 25,000/ - under Rule 173Q of the Act on the ground that the assessee had intentionally misdeclared their product under TI 68 for the period Sept., 1985 to March, 1986, while the product "Food Colour Preparations" is classifiable under Tariff Item 14D of the erstwhile Tariff.

(2.) IN the impugned order, he has held that it is true that Food Colour Preparations are used in food preparations and are manufactured as per ISI Specification No. 5346 and their standards are prescribed. He has held that the said IS is not the authority for classification of the product for Central Excise purposes. He has proceeded to hold that the word "Food" implies to articles used by human beings to satisfy his hunger. It should have some nutritious value. It should give some strength to body. It must contain the fats, minerals, carbohydrates, proteins, vitamins, etc., which are available in the food substances and food substitutes such as fruits, vegetables, wheat, rice, dals, mutton, fish, egg, etc. whereas, the food colours does not have any of the above said qualities. Therefore, the item cannot be considered as "Food". It is further held that food colours them selves cannot be legitimately consumed by human beings directly or after processing such as cooking, dissolving or boiling in water independently. Therefore, He has held that they cannot be considered as "food product" or a food preparation. he has held that captioned products are used just to improve the appearance of food preparations. These are used as colouring substance. Therefore he held that they are classifiable under erstwhile Tariff Item 14D and under the New Tariff sub -heading 3204.90 and that they are not eligible for the aggregate value of Rs. 2.5 lakhs for home consumption under Notification No. 43/82 dt. 28.2.1982 as amended from time to time for their specified goods and rendering them ineligible for exemption under Notification No. 77/85 dt. 1.3.1985 as amended.

(3.) IT is contended by the appellants that they are manufacturers of Food Colour Preparations and they started manufacturing the same from Sept., 1985 and that they had filed a declaration dt. 10.2.1986 with their jurisdictional superintendent of Central Excise classifying the same under IT 68 and claiming benefit of exemption No. 77/85 -CE. They stated that the said item is manufactured in powder as well as in liquid form. The Powder Food Colour Preparations are manufactured by adding common salt and/or Glauber's salt to one or more basic Food Colours to get the desired shade and percentage dye content. The liquid Food Colour Preparations on the other hand are prepared by mixing one or more basic Food Colour in water and glycerine. These Food Colour Preparations are made according to ISI Specifications and according to the Prevention of Food Adulteration Act and Rules made thereunder. As per this Act, no Food Colour or Food Colour or Food Colour Preparations can be marketed without ISI marking and specifications. As per the ISI standards the percentage dye content of all basic Food Colours should not be less than 85%. The percentage dye content of Powder Food Colour Preparations manufactured and marketed by them varies from 3.5% to 70% whereas the liquid Food Colour Preparations it varies from 0.1% to 4%. However, the department raised a Demand Notice dt. 4.5.1987, for the period 1.4.1985 to 31.3.1986 on the ground that the products are classifiable under TI 14D instead of TI 68 on the ground that they had suppressed the facts. Further a show cause notice dt. 16th July, 1990 was also issued substituting the earlier show cause notice from the Additional Collector. It is the appellants contention that the issue is totally covered in their favour in terms of the judgment rendered by the Tribunal in the case of Collector of Central Excise v. Anand Dyes and Co. as reported in 1989 (44) ELT 476, which squarely covers the case in their favour. It is further submitted that this judgment was further considered in the case of Collector of Central Excise v. Roha Dye Chem. Pvt. Ltd. as reported in 1997 (93) ELT 329, which has since been confirmed by Hon'ble Supreme Court as in the case of Collector of Central Excise v. Roha Dye Chem. Pvt. Ltd. as reported in 1997 (93) ELT 329. They also relied on unreported judgment rendered by the Tribunal in the case of Bush Boake Aliens (India) Ltd. v. Collector of Central Excise, as per Final Order No. 1246/90 -C which has also been upheld by the Supreme Court as can be seen from the Court -room highlights published in 1991 (56) ELT A 178.