THE COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-II, CHANDIGARH versus M/S. JAGATJIT INDUSTRIES LTD.

Citation: [2002] 2 S.C.R. 500 · Decided: 15-03-2002 · Supreme Court of India · Bench: M.B. SHAH · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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./A 
B 
THE COMMISSIONER OF CENTRAL EXCISE, 
CHANDIGARH-II, C~NDIGARH 
v. 
MIS. JAGA TJIT INDUSTRIES LTD. 
MARCH 15, 2002 
[M.B. SHAH AND B.N. AGRA WAL, JJ.] 
Central Excise Tariff Act, 1985-Tariff Heading 21.02-Intermediate 
C product prepared from yeast-Whether excisable-Held, no, as it was not 
proved that such product wps marketed or marketable. 
D 
Respondents used to buy yeast from market and prepare intermediate 
product of yeast, mollasses and water for the purpose of °!anufacturing 
potable alchohol. 
ifhe excise authority by its show cause notice proposed to levy excise 
duty on the intermediate product. Assistant Commissioner held the 
intermediate product as excisable as the same fell within the category of active 
yeast. On appeal, Commissioner (Appeals) held it as not excisable since the 
same was having a very short shelflife and because it was not proved whether 
E 
it was either marketed or marketable. 
The appeals by the Revenue before Central Excise and Gold Control 
Appellate Tribunal (CEGA T) were dismissed upholding the view of 
Commissioner (Appeals). 
F 
In appeal to this Court, appellant-Revenue contended that CEGAT was 
G 
H 
wrong in holdin~ that yeast was not excisable in view of specific item No. 21.02 
of Central Excise Tariff Act which makes yeast as excisable. 
Respondents contended that they had never contended before CEGA T 
that yeast was not excisable but that they were not manufacturing yeast. 
Dismissing the appeals, the Court 
HELD : The finding given by the Central Excise and Gold Control 
Appellate Tribunal (CEGA T) cannot be held to be, in any way, illegal or 
erroneous because it has not been proved that such intermediate product is 
500 
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COMMR. OF CENTRAL EXCISE v. JAGATJIT INDUS. LTD. [SHAH, J.] 501 
marketed or marketable. It would be misreading the order passed by the A 
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CEGAT to hold that it has arrived at the conclusion that yeast is not excisable. 
The CEGAT has held that the process adopted by the respondents of 
purchasing the yeast from the market which is excisable and mixing it with 
molasses and water for propagating the same cannot be held to be 
manufacture of yeast, as such liquid in mixture form is not marketable. 
B 
[503-H; 502-G-H] 
Union of India v. Delhi Cloth & General Mills Co. Ltd ... (1997) S SCC 767; 
... 
Collector of Central Excise, Baroda v. Mis. Ambalal Sarabhai Enterprises (P) 
Ltd, [1989) 4 SCC 112 and Collector of Central Excise, Baroda v. United 
-· ~ 
Phosphorus Ltd, (2000) 4 SCC 18, referred to. 
c 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7769 of 
2001. 
From the Judgment and Order dated 8.5.2000 of the Customs, Excise 
and Gold (Control) Appellate Tribunal, New Delhi in A. No. E/3084/99-D in D 
F.O. No. 258 of 2000-D. 
WITH 
-. 
C.A. Nos. 8460-8483 of 200 I. 
M.L. Verma, G.V. Rao, Rajiv Nanda for B. Krishna Prasad for the E 
Appellant. 
V. Lakshmikumaran, V. Sridharan for V. Balachandran for the 
,.,....._ 
Respondent in C.A. No. 77691200 I. 
Pankaj Kalra for the Respondent in C.A. No. 8460-83/200 I. 
F 
The Judgment of the Court was delivered by 
SHAH, J. The Commissioner of Central Excise, Chandigarh has 
challenged the order dated 8th May 2000 passed by the Customs, Excise and 
Gold (Control) Appellate Tribunal, New Delhi (for short referred to as G 
... 
''CEGA T') in Appeal No. E/3084/99-D etc., by which the Tribunal dismissed 
the appeals preferred by the revenue involving the common question - whether 
• 
the respondents were engaged in the manufacturing/propagation of yeast 
leviable to central excise duty. Hence, these appeals. 
Therefore, the short question involved in these appeals is - whether the H 
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502 
SUPREME COURT REPORTS 
[2002] 2 S.C.R. 
A 'yeast' propagated by the respondents having self-life of 6-8 hours which can 
be preserved in containers was excisable to the customs duty under description 
of heading 21.02 of the Central Excise Tariff Act. The Tariff Heading 21.02 
reads thus: -
B Heading 
Sub-Head 
No. 
ing No. 
Description of Goods 
Rate of Duty. 
c 
D 
21.02 
2102.10 
2102.90 
Yeasts (active or inactive); other 
single-cell micro-organisms, dead 
(but not including vaccines of Chapter 
30); prepared baking powders. 
-Put up in unit containers and 
ordinarily intended for sale 
10% 
-Other. 
10% 
Learned counsel for the appellant submitted that the order passed by 
the CEGA T is on the face of it illegal in view of the aforesaid specific Item 
No. 21.02 which makes

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