- (1.) Leave granted.
(2.) The appellant-company is engaged in the business of marketing betel nuts in different sizes after processing them by adding essential/non-essential oils, menthol, sweetening agent etc. Initially, the appellant cleared the goods under Chapter Sub-heading 2107 of the Central Excise Tariff and was paying duty accordingly. However, the appellant filed a revised classification declaration under Rule 173B of the Central Excise Rules, 1944, with effect from 17th July, 1997, claiming classification of its product under Chapter Sub- heading 0801.00 of the Central Excise Tariff. It was contended that the crushing of betel nuts into smaller pieces with the help of machines and passing them through different sizes of sieves to obtain goods of different sizes/grades and sweetening the cut pieces did not amount to manufacture in view of the fact that mere crushing of betel nuts into smaller pieces did not bring into existence a different commodity which had a distinct character of its own.
(3.) The Assistant Collector of Central Excise, Guntur Division, who was the Adjudicating Authority, did not accept the contention of the appellant upon holding that the product manufactured by the assessee, namely, betel nut powder, was a preparation containing betel nut with other permitted ingredients which was a new product commercially known to the market with distinct name and character. On his said finding, the Adjudicating Authority rejected the claim of the appellant-company and held that the appellant's product had been rightly classified under Chapter Heading 2107.00 and the appellant was liable to pay duty at the appropriate rate specified in the chapter to the Central Excise Tariff Act, 1985.;