Circular No. 9/87-CX.1, dated 28-7-1987
Classification of Aqua Mineral Bisleri Treated Water under Central Excise Tariff - Regarding.- A doubt has been raised as to whether the product known as “Aqua Mineral Bisleri Treated Water” is excisable under Heading 22.01 of the Central Excise Tariff or whether the product is non-excisable.
2. The matter has been considered by the Board. It is noted that the process of manufacture of the product is as follows :-
“Water is treated with bleaching powder to eliminate injurious micro-organisms. Thereafter, it is purified by filtration. Subsequently it is softened. Finally, it is sterilised to keep such drinking water free from bacteria, and to avoid contamination during treatment.”
3. It is observed that under the earlier Central Excise Tariff the product in question was considered as non-excisable. By Board’s F. No. B35/38/75-TRU, dated 10-5-1976 treated/demineralised water was considered to be non-dutiable under Item 68. Board has also noted that Collector (Appeals) Bombay in his order-in-appeal No. HN-2635/B/II-621/85, dated 27-12-1985, while holding that the product in question was non-excisable, had relied on the argument that the process of treating was intended to make water potable for hygenic reasons and there was no transformation of form or end use, since the product remained drinking water.
4. Heading 22.01 of the present tariff covers “natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matters, not flavoured ice”. Collector of Central Excise, Bombay. II who raised this issue has referred to the Explanatory Note to H.S.N. relating to Chapter 28.51 which reads as under :-
“natural water, even if filtered, sterilised, purified or softened, is excluded (Heading 22.01)” On this basis, the question has been raised whether treated water could be excisable under Heading No. 22.01.
5. After due consideration of the matter in consultation with the Chief Chemist, Board is of the view that the product would be non-excisable even in the new tariff. Firstly, Section 2(f) of the Central Excises and Salt Act defining “manufacture” has no specific provision in respect of this commodity unlike in some cases and therefore if the product was earlier non-excisable, it should continue to be so even under the new tariff. Secondly, the Explanatory Notes to H.S.N. may not provide conclusive basis for deciding the issue in Central Excise matters as the HSN has special bearing for the purpose of trade and not manufacture. Chapter 22 of the new Tariff does not indicate that such items are to be included. H.S.N. Explanatory Notes to Chapter 22.02, also do not make specific mention of the product in question, although “sweetened or flavoured mineral water” find mention thereunder. Thirdly, if such products are considered as excisable, tap water for domestic use supplied by the Municipal Corporation could also get covered since “waters” are specifically mentioned under Heading 22.01 of HSN, but charging of duty thereon is not intended on Central Excise side. There is a difference between the heading 22.01 of HSN and Heading 22.01 of the CET inasmuch as the excise tariff does not include all kinds of water, whereas sub-heading 2201.90 of the H.S. has residuary entry for “other water”. The Explanatory Note to H.S. page 163 includes clarified or purified water under the category of “ordinarily natural water of all kinds”. But there is no such entry on Central Excise side.
6. In view of the aforesaid position, Board is of the view that Aqua Mineral Bisleri Treated Water is non-excisable.
[F. No. 9/1/87-CX.1]