2018 (2) TMI 1794 - AT - Central Excise

SSI exemption - after crushing chillies, the chilly powder is being sold - claim of appellant is that the process do not amount to manufacture and not included the above in calculation of SSI turnover - Held tat - The crushing of the chilly is not amount to manufacture. When it is not amount to manufacture, then it is not subject to excisability and the value of the same cannot be included for the purpose of the SSI limit - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Applicability of SSI exemption to the value of chilly powder in the total turnover.

Analysis:
The case involved an appeal against Orders-in-Appeal, focusing on the manufacturing and clearance of ready-to-eat and ready-to-cook food items by the appellant, who had not discharged the duty liability and claimed the benefit of SSI exemption. The appellant also sold chilly powder after crushing chillies, arguing that crushing does not amount to manufacturing. The Department disagreed with the appellant's claim, leading to the appeal.

During the proceedings, the appellant contended that crushing chillies does not constitute manufacturing activity, citing legal precedents such as the Tinna Rubber & Infrastructure Ltd. case and the Crane Betel Nut Powder Works case. The appellant also referred to the Krishna Chander Dutta case, emphasizing that whole black or white pepper and pepper powder are considered the same goods. Additionally, the appellant argued that the value of chilly powder should be excluded from the SSI exemption limit.

On the other hand, the Department, represented by the Learned AR, supported the findings of the impugned order. After considering the arguments from both sides and reviewing the legal precedents, the Tribunal concluded that crushing chilly does not amount to manufacturing. Therefore, the chilly powder's value should not be included in the total turnover for the purpose of the SSI exemption.

Consequently, the impugned order was set aside, and the appeal filed by the assessee was allowed. The judgment was pronounced and dictated in Open Court on 6-2-2018 by Dr. Satish Chandra, President.