2008 (2) TMI 40 - SC - Central Excise

Activities of processing dry fruits, peanut & activities of clearance of wheat dalia, rice flips, roasted and spiced channa and channa dal which cleared in different pouches bearing brand name Yum Yum and SKB which are packed cartons - held that the activities carried on by the assessee amounted to manufacture and that the products in question were classifiable under Chapter 20 of CETA Assessee s appeal dismissed

Summary

Issues:
1. Whether the activities carried out by the appellant amount to manufacture for the purpose of central excise duty?
2. Whether the products in question are chargeable to duty under Chapter 20 of the Central Excise Tariff Act?

Analysis:

Issue 1: Activities Amounting to Manufacture
The appellant, engaged in processing dry fruits and other goods, was issued a show cause notice for allegedly evading central excise duty by not disclosing material facts. The Additional Commissioner confirmed the duty demand, imposed penalties, and ordered redemption of seized goods. The Commissioner (Appeals) rejected the appellant's appeal. The Tribunal upheld the order but reduced the penalty, leading the appellant to file the present appeal. The Supreme Court entertained the appeal specifically concerning peanuts, pista, cashewnuts, and almonds. The Court de-linked this appeal from others and disposed of connected appeals separately. Notably, in a related case, the Tribunal had held that similar activities did not amount to manufacture. However, the Supreme Court reversed this view, determining that the appellant's activities constituted 'manufacture' and the products were classifiable under Chapter 20 of the Central Excise Tariff Act. Consequently, the Court set aside the Tribunal's order and allowed the appeal filed by the Revenue.

Issue 2: Chargeability of Products to Duty
Considering the similarity between the products in the present case and those in the Phil Corporation Ltd. case, the Supreme Court dismissed the appellant's appeal in line with its decision in the Phil Corporation Ltd. case. The Court emphasized that the Tribunal's order in the present case aligned with the decision in Phil Corporation Ltd., where it was established that the products were chargeable to duty under Chapter 20 of the Central Excise Tariff Act. Therefore, the Court upheld the dismissal of the present appeal, citing conformity with its earlier ruling.

In conclusion, the Supreme Court's judgment clarified that the appellant's activities constituted 'manufacture' for central excise duty purposes and that the products in question were indeed chargeable to duty under Chapter 20 of the Central Excise Tariff Act. The dismissal of the appellant's appeal was based on the alignment of the Tribunal's decision with the Court's earlier ruling in a related case.