JYOTI LIMITED Vs. CCE

JUDGEMENT

(1.) THE issue involved in this Appeal filed by M/s. Jyoti Ltd. is whether the process of crushing, grinding, powdering, screening, magnetic separation of China Clay and other Clay amounts to manufacture in view of Note 2 to Chapter 25 of the Schedule to the Central Excise Tariff Act. When the matter was called, no one was present on behalf of the Appellants. They, in fact, have requested, under their letters dated 31.7.1998 and 9.12.1998, to decide the Appeal on the basis of grounds of appeal mentioned in their Memorandum of Appeal in which they had submitted that they were purchasing completely manufactured China Clay and other clays from the dealers for the manufacture of final product namely, Ceramic Product and electrical insulators; that the process of crushing, grinding, powdering, etc. mentioned in paragraph 3 of the show cause notice dated 13.2.1991 were being carried out by the manufacturers of the China Clay and other clays"; that as such they were not manufacturing china clay and other clays. They have further submitted that if the clay at procurement stage and after carrying out process(es) remains clay, there is no manufacture as defined in Section 2(f) of the Central Excise Act; that after mixing in ball Mill, the clay remains the clay and there is no transformation and no new product came into existence. Reliance has been placed on the decision in the case of U.O.I. v. Delhi Cloth & General Mills, 1977 ELT J199 (SC) :, 1973 April Cen -Cus 56 (SC) :, 1990 (27) ECR 151 SC :, ECR C 216 SC. They have finally submitted that action of the department in taxing same commodity twice under the same heading is contrary to the express provision of Central Excise Act and they relied upon the following decisions.

(2.) SHRI H.K. Jain, Ld. S.D.R. reiterated the findings of the Additional Collector as contained in the impugned order. Referring to note 2 to Chapter 25, he emphasized that the process of conversion of China Clay or other Clay by crushing, grinding, powdering, screening by Magnetic separation with the aid of power into china clay and other clays would amount to manufacture; that as these processes were not brought to the notice of the Department and no classification list was filed nor licence was obtained, the Appellants had suppressed the facts and extended time for demanding duty under Section 11A(1) of the Central Excise Act was rightly invoked. Finally he mentioned that the Appellate Tribunal in the case of Jayshree Insulators & Others v. C.C.E. Vadodara order No A/1112 -1114/98 -C dt. 6.11.1998 has held that Feldspar powder obtained by the process of grinding/crushing the feldspar lumps would amount to manufacture.