2006 (4) TMI 310 - AT - Central Excise

Summary

Issues:
Manufacturing activity involving conversion of sugar from small to larger grain, applicability of sugar cess, classification of sugar under the Sugar Cess Act.

Analysis:
The case involved a dispute regarding the classification of the activity of converting sugar from small granule to larger grain as a manufacturing activity and the consequent applicability of sugar cess. The appellants argued that since the sugar remains the same, there is no manufacturing activity involved, and thus no cess should be charged. On the other hand, the respondent contended that the sugar manufactured by the appellants, although of larger grain, qualified as sugar under the Sugar Cess Act, 1982, as it contained 90% or more sucrose and was manufactured by a specific procedure. The respondent relied on a precedent from the Orissa High Court to support their argument that different forms of sugar are distinct.

Upon considering the submissions, the tribunal noted that the Assistant Commissioner had classified the sugar manufactured by the appellants under Chapter Heading 1704.90 as sugar confectionary. The appellants failed to provide detailed information about the nature of the sugar they produced, merely stating it was of a larger grain. The tribunal determined that while sugar confectionary differs from regular sugar, it still falls under the definition of sugar as per the Sugar Cess Act. Therefore, the tribunal upheld the Commissioner (Appeals)'s order, concluding that the sugar manufactured by the appellants was chargeable to sugar cess. As a result, the appeal was dismissed, and the decision was pronounced in court on 27-4-2006.