2007 (2) TMI 383 - AT - Central Excise

Summary

Issues involved:
The judgment involves the demand of duty and penalty arising from the order of the Commissioner of Central Excise, Mumbai on products like Veg./Non-veg. Burgers, Non-veg. Curry Pan, Non-veg. Wraps, Pizza Puffs, and French Fries, along with issues related to classification under CET sub-headings 1601.10 and 2001.10, the process of manufacture, and the period of limitation.

Demand of Duty and Penalty:
The demand of duty amounting to Rs. 2,21,30,791/- raised in show cause notices covering the period September 2000 to February 2006, on various food products, and the imposition of penalties on different individuals associated with the company have been confirmed. The products in question were classified under CET sub-headings 1601.10 and 2001.10, and the extended period of limitation invoked in the show cause notice dated 2-9-2005 was upheld.

Manufacture and Classification:
The contention that no manufacture is involved as the items were procured after undergoing a process by an independent manufacturer and were only heated prior to serving was deemed not tenable. The Tribunal found that the products like burgers, curry pan, wraps, pizza puffs, and French fries underwent processes that resulted in the emergence of distinct new commodities different from their ingredients, thus constituting a process of manufacture. The classification of these products under Chapter 16 as meat preparations or Chapter 20 as vegetable preparations was considered debatable.

Unit Containers and Limitation:
The argument that certain products served in open wrappers or containers cannot be considered as put up in unit containers was supported by a reference to a Supreme Court judgment. The Tribunal acknowledged the prima facie force in the submission that part of the demand covered by the show cause notice was time-barred due to the full disclosure of activities by the applicants since 1998, which negated any intent to evade payment of duty.

Decision and Pre-Deposit:
Based on the findings regarding the packing of products and the limitation issue, the Tribunal directed a pre-deposit of Rs. 10,00,000/- towards duty within eight weeks. Upon compliance with this direction, the pre-deposit of the remaining duty and penalties would be waived, and the recovery thereof stayed pending the appeals. Failure to comply would result in the vacation of stay and dismissal of appeals without prior notice.