At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Bangalore
By, THE HONORABLE JUSTICE: S.S. GARG
By, MEMBER AND THE HONORABLE JUSTICE: V. PADMANABHAN
For Petitioner: Naveen Kushalappa, A.R.
1. This Revenue appeal is filed against Order-in-Appeal No. 157/2003-C.E., dated 24-6-2003. The respondents are manufacturers of "Parry's Natural Beta Carotene" and "Pro 9 Natural Mixed Carotenoids" claiming classification under Chapter sub-heading 2936.00 of Central Excise Tariff Act, 1985. The original authority vide its Order-in-Original disapproved this classification and directed the respondent to classify the goods under sub-heading 2108.99 and confirmed the demand of duty and penalty. When the issue was carried to Commissioner (A), he passed the impugned order, in which he allowed the respondent's appeal with consequential relief. Aggrieved by the said order, the Revenue has filed the present appeal. With the above background, we heard Shri Naveen Kushalappa, AR for the Revenue and none appeared for the respondent.
2. Revenue's argument is that the goods covered in the present dispute are in the nature of food supplements and hence merit classification under 2108.99. Accordingly, they have prayed for setting aside the impugned order and reinstating the Order-in-Original.
3. The respondent received "Parry's Natural Beta Carotene" and "Pro 9 Natural Mixed Carotenoids" in bulk which was classified under 2936.00 in their factory, they undertook the process of encapsulation i.e., repacking of the raw material received in bulk into capsule form, to facilitate sale of the same in retail market and enable easy consumption. The claim of the respondent is that encapsulation does not alter the identity or character of the raw material and hence their final product should also be classified under 2936 as pro vitamin.
4. After going through the process of manufacture as stated in affidavit by the Senior Manager of the respondent, the learned Commissioner (A) has come to the conclusion that the raw material does not undergo any change when it is made into capsule form. Accordingly, he has come to the conclusion that repacking of the goods in to capsule form does not result in any new product. He has relied upon the Tribunal's decision in the case of Sarat Products : 2000 (115) E.L.T. 163 holding that conversion of spirulina into capsule form does not amount to manufacture. Accordingly, he has set aside the Order-in-Original and allowed the appeal of the respondent. The respondent has undertaken repacking of the goods received by them in bulk into the form of capsule. Revenue was of the view that after encapsulation, the goods would be liable to be classified under 2108.99 as dietary supplements. As clearly held by the Commissioner (A), the goods remain t
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he same and there is not even addition of vitamin during the process of repacking. Accordingly, we find no justification in reclassifying the product upon repacking into 2108. Accordingly, we do not interfere with the impugned order, which is upheld and Revenue appeal is rejected.