2004 (12) TMI 161 - AT - Central Excise

Summary

Issues involved:
1. Modification of interim orders and stay application.
2. Consideration of important questions raised by the appellants.
3. Excisability of the product supplied to Contract Bottling Units (CBUs).
4. Applicability of relevant circulars and legal precedents.
5. Attribution of royalty received to the sale of food flavors.
6. Determination of whether mixing of food flavors amounts to manufacture.
7. Introduction of additional grounds of appeal.
8. Jurisdiction of the Tribunal to examine questions of law.
9. Excisability of the food flavor product.
10. Scheduling of hearing due to the significant revenue involved.

Comprehensive analysis:
1. The appellants filed applications for the modification of interim orders and stay application. They sought waiver of a pre-deposit amount within a specified period. The Tribunal considered the grounds presented by the appellants, including issues related to the sale proceeds of the Contract Bottling Unit (C.B.U.) and the excisability of finished goods like Potable Alcohol (IMFL). The appellants argued that the mixing of duty paid food flavors did not result in a new excisable product based on previous decisions and circulars. The Departmental representative opposed the modification, citing the applicability of a Supreme Court decision in a similar case.

2. The key contention revolved around the excisability of the product supplied to CBUs. The appellants argued that the mixing of food flavors did not amount to manufacture, supported by a favorable decision by the Commissioner in a related case. They emphasized that the royalty received was not solely for the food flavors supplied. The Tribunal, after careful consideration, agreed with the appellants' position, granting a full waiver of the pre-deposit amount demanded by the Commissioner.

3. The Tribunal allowed the introduction of additional grounds of appeal by the appellants, emphasizing that these grounds pertained to questions of law and would not cause prejudice. The appellants relied on relevant legal precedents to support their request, highlighting the jurisdiction of the Tribunal to examine such grounds. The Tribunal acknowledged the importance of considering the excisability of the food flavor product in determining the duty liability.

4. Considering the significant revenue involved, the Tribunal scheduled the cases for a hearing on a specific date to address the complex legal issues and arguments presented by both parties. The judgment reflected a detailed analysis of the excisability of the product, the attribution of royalty, and the impact of mixing food flavors on the question of manufacture. The Tribunal's decision to grant a waiver and allow additional grounds of appeal demonstrated a thorough evaluation of the legal aspects involved in the case.