ORDER
K.K. Bhatia, Member (T)
1. This appeal is against the Order-in-Original No. 5/93, dated 16-2-1993 passed by the Commissioner of Central Excise, Guntur, confirming duty amount of Rs. 2,54,282/- BED and Rs. 12,714/- SED on the appellants under Section 11A(2) of the Central Excise Act, 1944. The Collector has imposed further penalty of Rs. 50,000/- on the appellants under Rule 173Q of the Central Excise Rules, 1944. The brief facts in the case are that the appellants had removed a total quantity of 3,30,235.85 kgs. of mango pulps in 850 gms. tins and also jerry cans in 850 gms. tins. The proceedings were initiated against the appellants which culminated in the Collector passing the aforesaid order. The Collector in the impugned order observed that M/s. Nutrine Confectionery Company Ltd. placed an order on the appellants for supply of mango pulp out of the mangoes supplied by M/s. Nutrine Confectionery Company to be packed in jerry cans which also supplied by the same company. M/s. Nutrine Confectionery Company Ltd. paid only the processing charges for the pulp delivered in jerry cans to them by the appellants. The Collector held that the assessee undertook the manufacturing activity of mango pulp. The Collector classified the said product under sub-heading 2001.10 of the CETA, which at the material time covered preparations of vegetables, fruits, nuts and other parts of plants including jams, fruit jellies, marmalade, fruit or nut fruit juice and vegetable juice whether or not containing added sugar or sweet under this broad description. The sub-heading 2001.10 relates to the products put up in unit containers and ordinarily intended for sale which was subject to the duty @15% ad valorem at the material time. The alternative sub-heading under this broad heading was 2001.90 related to the other products which was subject to ‘nil’ rate of duty.
2. We have heard Shri T. Ramesh, learned Advocate assisted by Sri Muthu Venkatraman, Advocate for the Appellants and Shri G. Sree Kumar, learned SDR for the Revenue Respondents.
3. Learned Advocate for the appellants mainly relied upon the decision of the Tribunal in the case of Mafco Ltd. as reported in 1994 (71) E.L.T. 241. In this case, by a majority judgment, the Tribunal on the similar facts held that the process of preparation of fruit pulp does not amount to manufacture within the meaning of Section 2(f) of the Central Excise Act, 1944, so as to attract the levy of duty. The Tribunal accordingly set aside the duty demanded on the mango pulp in this case and also the penalty imposed on the appellants therein. The appellants also relied upon the judgment of the Hon’ble Supreme Court in the case of Dy. Commissioner, Sales Tax (Law) v. Pio Food Packers as reported in 1980 (6) E.L.T. 343 (S.C.). In this judgment, the Hon’ble Apex Court in relation to the preparation and canning of pineapple slices, observed that notwithstanding the removal of inedible portions, the slicing and thereafter canning it or adding sugar to preserve it and also that pineapple slices have a higher price in the market than the original fruit, it is held that when the pineapple fruit is processed into pineapple slice for the purpose of being sold in sealed cans, there is no consumption of the original pineapple fruit for the purpose of manufacture. It is further observed that the case would not fall within the Section 5A(1)(a) of the Kerala General Sales Tax Act and accordingly upheld the findings of the High Court in the matter, dismissing the appeal of the Revenue in that case.
4. Learned SDR, on behalf of the Respondents, on the contrary submits that the order of the lower authority is passed ex parte and the arguments now being advanced before the Bench and also the case laws cited were not considered by him. It is, therefore, contended that the matter may be remanded for reconsideration by the original authority for giving his findings on the arguments advanced herein.
5. We have carefully considered the submissions made before us by both sides. It is observed that though prima facie, it appears that the case of the appellants is similar to the facts as considered favourable in the decision of CEGAT in the case of Mafco Ltd. referred to supra, but however, since the findings therein have not been discussed in the decision of the lower authority, it is considered just and fair that all the facts and the legal propositions as discussed in the above referred decisions are considered in their proper per-pective by the adjudicating authority. In view of these findings, we set aside the order impugned passed by the lower authority and remand the matter to him to reconsider all the aspects of the matter de novo including the classification and limitation involved in the case. The adjudicating authority would afford a reasonable opportunity to both sides to state their case before him before taking a final decision in the matter. Since the matter is pending for a long time, the de novo order should pass within a period of three months from the date of receipt of this order.
6. The appeal is disposed of in the above terms.