LexCOMMISSIONER OF CUSTOMS & CENTRAL EXCISE, GOA versus PHIL CORPORATION LTD.
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/ -r [2008] 2 S.C.R. 531 -)' COMMISSIONER OF CUSTOMS & A CENTRAL EXCISE, GOA v. PHIL CORPORATION LTD. (Civil Appeal No. 2215 of 2002) FEBRUARY 7, 2008 B (ASHOK BHAN AND DALVEER BHANDARI, JJ.) ~ Central Excise Tariff Act, 1985: Chapter Heading 20.01-10- Chapter 20 - HSN Note - c Classification of products - Processing of cashewnuts, peanuts, almonds by dry/oil roasting, salting and seasoning - Packing the same in small containers - HELD: The products have to be classified under Chapter 20 - HSN is a safe guide for purpose of deciding issues of classification - Interpretation D of Statutes - HSN explanatory notes - Significance· of in classification of products . .. ~ The respondent assessee in C.A. No. 2215 of 2002 was engaged in the business of processing cashewnuts, E peanuts, almonds etc. by dry/oil roasting, salting, seasoning and packing them in small containers. These . goods were cleared by the assessee under its brand name without payment of excise duty. A show cause notice was issued to the assessee stating that the goods were F ~~ classifiable under Chapter heading 2001.10 of the Central Excise Tariff Act, 1985. Accordingly demand of Central Excise duty was raised and penalty was proposed under the Central Excise Act, 1944. The stand of the assessee that the goods were classifiable under Chapter Heading 0801.00 and chargeable to nil rate of duty was rejected by G ~ .... the Commissioner of Customs and Central Excise. However, the Customs, Excise and Gold Control Appellate Tribunal allowed the appeal of the assessee holding that the goods cleared by it were not assessable to duty. 531 H / 532 SUPREME COURT REPORTS [2008] 2 S.C.R. A In the instant appeals, it was contended for the -f- Revenue that the assessee after receiving the items concerned, carried out various processes such as dry/ oil roasting, salting, seasoning with spices or herbs and flavours and flushing the same with Nitrogen gas and then B packed them in unit containers bearing the brand names. It was submitted that the products, thus, fell under Chapter 20 of the Central Excise Tariff Act. It was also contended that in view of s.2(f)(ii) of the Central Excise ~ Act and HSN note 3 to Chapter 20 of the Central Excise c Tariff Act, the process itself would amount to manufacture. .Disposing of the appeals, the Court HELD: 1.1 The Central Excise Tariff Act, 1985 is broadly based on the system of classification from t~e D International Convention called the Brussels' Convention on· ~he ·Harmonised Commodity Description and Coding System (Harmonised System of Nomenclature) with necessary modifications. HSN contains a list of all the " .... possibl,e goods that are traded and as such the mention E of an item has got nothing to do .yvhether it is manufactured and taxable or not. This court has clearly enunciated that the HSN is a safe guide for the purpose of deciding issues of classification. [paras 28-29] (550-C, D, E] Brussels' Convention on the Harmonised Commodity F Description and Coding System (Harmonised System of Nomenclature) - referred to. ·..,r~ 1.2 In the instant case, the HSN explanatory notes to ~, Chapter 20 categorically state that the products in question are so included in Chapter 20. The said HSN G explanatory notes also categorically state that such products are excluded from Chapter 8 as they fall in -+-- .... Chapter 20. Jn thjs view of the matter, the classification of the prOdlf.cts in question has to be made under Chapter 20 of the Central Excise-Tariff Act, 1985. [para 29 and 33] H [550-E, F] COMMNR. OF CUSTOMS & CENTRAL EXCISE, GOA 533 v. PHIL CORPN. LTD. -~ 2.1 The legal position has been clearly crystallized A in judgments of this Court that certain processes which may not otherwise amount to manufacture have been deemed to be manufacture by the Parliament under section 2(f)(ii) of the Central Excise Act, 1944. [para 30] [550-F, G] B Collector, Central Excise, Bombay vs. S.D. Fine . Chemicals Pvt. Ltd. [1995] Supp. 2 SCC 336 - relied on. J Amrit Agro Industries Ltd. & Anr. Vs. Commissioner of Central Excise, Ghaziabad [2007] 201 ELT 183(SC); c Collector, Central Excise, Shillong vs. Wood Craft Products Ltd. [1995] 3 SCC 454; and Union of India & Anr. Vs. Delhi Cloth & General Mills Co. Ltd. AIR 1963 SC 791: 1963 Supp.(1) SCR 586 - referred to. O.K. Play (India) Ltd. vs. Commissioner of Central D Excise-II, New Delh
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