IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.6011-6013 OF 2007

Commr. of Central Excise ...Appellant(s)

Versus

M/s. Shanmugananda Soapnut Works ...Respondent(s)

O R D E R

Repeatedly this Court has observed that in cases in which excisability is in

issue, the Department should insist on the examination of the process undertaken by

the assessee in the manufacture of a given product.  Despite our saying so, repeatedly,

the Department is not insisting on examining the process.  This is one more such case.

In the present case, the investigation revealed that the respondent-assessee,

M/s. Shanmugananda Soapnut Works, was engaged in the manufacture of Shikakai

powder by crushing shigekai pods and 'Reeta' mixed in preparation of 10:1.  Despite

the said revelation made in the course of investigation, the show cause notice has not

even alleged that the assessee is engaged in  the manufacture  of Shikakai

 ...2/-

C.A.Nos.6011-6013/07..contd..

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powder by crushing shigekai pods and 'Reeta' being mixed and, consequently,  the

entire adjudication stands derailed.  Further, it may be stated that mixing of 'Reeta'

has been held to constitute manufacture in numerous judgments.  But, in this case, the

respondent-assessee has specifically averred that they are merely powdering shigekai

pods and that they do not add any herbal material thereto.  Lastly, in the present

case, the adjudication authority has not insisted on examining the process undertaken

by the assessee in conversion of the pods into powder.

We  may  state  that  there  are  other  conjoint  matters  in  which  we  are

informed that the cases involved mixture of Reeta into Shikakai powder.  However, as

stated above, this is not the case in the present matter.

Therefore, for want of allegations in the show cause notice and for want of

specific findings with regard to use of Reeta in the powder, we do not wish to interfere

on the facts of the present case.  We make it very clear that those cases  in which

Reeta is  added to  the  powder  stand  on a

 ...3/-

C.A.Nos.6011-6013/07..contd..

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different footing and we do not wish to comment about those cases herein.

Subject to above, Civil Appeals stand dismissed with no order as to costs.

                         ...................J.               (S.H. KAPADIA)

                  ...................J.                                         (B. SUDERSHAN REDDY) New Delhi, September 17, 2008.