2024 (3) TMI 847 - AT - Central Excise

Process amounting to manufacture or not - classification of Savory Oats to be under 19042000 or not - period February 2015 to January 2016 - HELD THAT - It is brought out that the very same issue was decided by the Tribunal in the appellant s own case for different periods wherein the Tribunal has set aside the demand of Excise Duty, interest and the penalties. Following the decision of the Tribunal in the assessee s own case in M/S. AMEYA FOODS VERSUS THE COMMISSIONER OF GST CENTRAL EXCISE, COIMBATORE AND MR. I.R. NARAYAN VERSUS THE COMMISSIONER OF GST CENTRAL EXCISE, COIMBATORE 2023 (8) TMI 1428 - CESTAT CHENNAI which has been affirmed by the Hon ble Apex Court in THE COMMISSIONER OF GST AND CENTRAL EXCISE VERSUS M/S AMEYA FOODS 2024 (2) TMI 369 - SC ORDER , the demand in the present case requires to be set aside - It was held by Tribunal that the product Savoury Oats / Silk Oats merit classification under CETH 1104 12 00 and not under 1904 20 00 as determined by the authorities below. The impugned order is set aside. The appeal is allowed.

Summary

Issues Involved:
1. Classification of 'Savoury Oats' and 'Silk Oats'
2. Whether the process undertaken by the appellant amounts to "manufacture"
3. Demand for Excise Duty, interest, and penalties

Summary:

1. Classification of 'Savoury Oats' and 'Silk Oats':
The appellant, engaged in the manufacture of various types of oats, was classified under tariff heading 19042000 by the original authority, which resulted in a demand for Excise Duty, interest, and penalties. However, the Tribunal had previously ruled in the appellant's favor for different periods, classifying 'Savoury Oats' under 11041200 and determining that the activity did not amount to "manufacture." This decision was affirmed by the Hon'ble Supreme Court.

2. Whether the Process Undertaken by the Appellant Amounts to "Manufacture":
The Tribunal analyzed the process, which involves mixing plain oats with dehydrated vegetables, seasoning, and packing. The Tribunal concluded that this process does not create a new, distinct, and marketable product. The product retains its essential character as oats, and thus the activity does not amount to "manufacture." This view was supported by previous rulings, including the case of Satnam Overseas Ltd., where the Supreme Court held that mixing dry vegetables with rice did not constitute "manufacture."

3. Demand for Excise Duty, Interest, and Penalties:
Given the classification under 11041200 and the determination that the process does not amount to "manufacture," the Tribunal set aside the demand for Excise Duty, interest, and penalties. The Tribunal's decision was based on consistent legal precedents and the specific nature of the appellant's processes, which did not transform the oats into a new product.

Conclusion:
The Tribunal allowed the appeal, setting aside the impugned order and granting consequential relief to the appellant. The classification of 'Savoury Oats' under 11041200 was upheld, and the process undertaken by the appellant was determined not to constitute "manufacture."